How To Kill Economic Development
- Posted by Jeff Carter
- on April 24th, 2013
Yesterday, I saw this chart from the AEI.
Notice when it turns upward on a steep slope. Right between 1776 and 1800.
Also notice which line is steeper. The entire world civilization is better off because of the United States. The founding of the US is the catalyst for this growth. Wonder why people want to immigrate here?
People like to argue over founding principles, but one thing is abundantly clear. The founders set up a system based on the free market economic theories of Adam Smith.
Fast forward 230 years to an article I saw in the Chicago Tribune today.
Fast food and retail workers in Chicago will be walking off the job today. They want $15 per hour in pay vs the $8.25 in wages they currently receive. The state mandates a higher minimum wage than the rest of the country. It’s one of the reasons for high unemployment in Illinois. 9.5%.
Of course, Adam Smith and any other classical economist could tell you higher minimum wages lead to more unemployment.
The protestors facts are also wrong. It’s rare to find a minimum wage employee that supports their family in a minimum wage job. All minimum wage hikes do is hurt single mothers, elderly workers looking for extra money, and teen agers. Especially minority teen agers. But don’t let the facts get in the way of trying to get a free lunch.
It sounds like these workers want something for nothing. Matt Matros of Protein Bar says,
employees at his company control their opportunities for advancement.
Starting at $8.25 per hour, workers get raises at increments of 50 cents per hour by passing certain skills tests, such as knife safety or nutrition, he said.
Those tests can take an employee all the way to management, Matros said, noting that four general managers at the eight Protein Bar restaurants in Chicago and Washington D.C. started at the bottom. He said more than half of the chain’s 300 employees have been with the company for more than a year.
“If you want a raise, there’s a list of 10 tests you need to take in order for you to get your raise,” he said. “It really leaves it up to the employee to really kind of control their own career.”
In Chicago, if it keeps up I suggest the citizens stage their own protest. Bring your lunch to work. Order items online.
Or, try and find a food truck and patronize those hard working entrepreneurs.
Of course, the city limits competition by limiting where they can park.
For owners of restaurants, here is a labor saving idea for you. Turn the cash register around. Make it a touch screen with pre-formatted menu options. One touch, a swipe of a credit/debit card and all you need is one person to run orders from the back of the house to the front of the house. You could install customized touch screens on drive throughs as well.
A company in Elmhurst, UICO can build them to your exact specifications. They are weather, and water proof as well. You can even use them with gloves.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Jeffrey Carter is an angel investor and independent trader. He specializes in turning concepts into profits. He co-founded Hyde Park Angels one of the most active angel groups in the United States in April of 2007. He previously served on the Chicago Mercantile Exchange Board of Directors. He has done market commentary for (More...)