McDonald’s Response To Minimum Wage Hikes Totally Undercuts The ‘Fight For $15,’ New Study Shows

If a McDonald’s cashier’s take-home pay increases 20% after a minimum wage hike, but the prices for the food and other things they spend their wages on increase by a similar amount, they aren’t actually any better off. 

This would happen throughout the economy, not just in fast food.

One poignant example comes courtesy of the Heritage Foundation’s Rachel Grezler, who studied how minimum wage hikes would impact the cost of childcare; an enormous expense for many working-class families. 

“Childcare costs would increase by an average of 21 percent—an extra $3,728 per year for two children—and up to 43 percent, or more than $6,000, in some states,” Heritage reports. “The impacts would be greatest in lower-cost areas; in Louisiana, Oklahoma, and Mississippi, costs would surge between 37 percent and 43 percent.” 

So, much to the chagrin of progressive legislators hawking minimum wage hikes, working parents wouldn’t actually be helped by a nominal rise in their weekly paycheck, because it would simply lead to higher prices for the goods and services they rely on. 

Minimum Wage Advocates Obsess on the Seen and Ignore the Unseen

So why do proponents of minimum wage hikes continue to push the policy despite these realities? It’s simple: They fall victim to the tragically widespread fallacy, first identified by economist Frederic Bastiat, of focusing on the seen and ignoring the unseen.

In explaining Bastiat’s theory, economist Henry Hazlitt decried the “persistent tendency of men to see only the immediate effects of a given policy, or its effects only on a special group, and to neglect to inquire what the long-run effects of that policy will be not only on that special group but on all groups.” 

Hazlitt called this “the fallacy of overlooking secondary consequences.”

This is exactly the mistake made by minimum wage advocates. They see only the nominal rise in workers’ weekly paychecks that a government mandated wage increase can bring. Yet they fail to see beyond that. They fail to consider the future workers who will not be hired at all and the millions of minute price increases that would largely erase nominal wage gains regardless. 

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