Connect with us

Business

Do Minimum Wage Laws Accomplish Anything?

Published

6 minute read

The Audit

David Clinton

All the smart people tell us that, one way or another, increasing the minimum wage will change society. Proponents claim raising pay at the low end of the economy will help low-income working families survive in hyper-expensive communities. Opponents claim that artificially increasing employment costs will either drive employers towards adopting innovative automation integrations or to shut down their businesses altogether. Either way, goes the anti-intervention narrative, there will be fewer jobs available.

Well, whatā€™ll it be? Canadian provinces have been experimenting with minimum wage laws for many years. And since 2021, the federal government has imposed its own rate for employees of allĀ federally regulated industries. There should be plenty of good data out there by now indicating who was right.

The Audit is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Historical records on provincial rates going back decades isĀ available from Statistics Canada. For this research, I used data starting in 2011. Since new rates often come into effect mid-year, I only applied a yearā€™s latest rate to the start of the following year. 2022 itself, for simplicity, was measured by the new federal rate, with the exception of British Columbia whoā€™s rate was $0.10 higher than the federal rate.

My goal was to look for evidence that increasing statutory wage rates impacted these areas:

  • Earnings among workers in full-service restaurants
  • Operating profit margins for full-service restaurants
  • Total numbers of active businesses in the accommodation and food services industries

I chose to focus on the food service industry because itā€™s particularly dependent on low-wage workers and particularly sensitive to labour costs. Outcomes here should tell us a lot about the impact such government policies are having.

Restaurant worker incomeĀ is reported as total numbers. In other words, we can see how much all of, say, Manitobaā€™s workers combined took home in a given year. For those numbers to make sense, I adjusted them using overall provincial populations.

Income in British Columbia and PEI showed a strong correlation to increasing minimum wages. Interestingly, BC has consistently had the highest of all provincesā€™ minimum wage while PEIā€™s has mostly hung around the middle of the pack. Besides a weak negative correlation in Saskatchewan, there was no indication that income in other provinces either dropped or grew in sync with increases to the minimum wage.

Nation-wide, by weighting results by population numbers, we got a Pearson coefficient 0.30. That means itā€™s unlikely that wage rate changes had any impact on take-home income.

Did increases harm restaurants? It doesnā€™t look like it. I usedĀ data measuring active employer businessesĀ in the accommodation and food services industries. No provinces showed any impact on business startups and exits that could be connected to minimum wage laws. Overall, Canadaā€™s coefficient value was 0.29 – again a very weak positive relationship.

So restaurants havenā€™t been collapsing at epic, extinction-level rates. But do government minimums cause a reduction in theirĀ operating profit margins? Apparently not. If anything, theyā€™ve becomeĀ moreĀ profitable!

The nation-wide coefficient between minimum wages and restaurant profitability was 0.88 – suggesting a strong correlation. But how could that be happening? Donā€™t labour costs make up a major chunk of food service operating expenses? Here are a few possible explanations:

  • Perhaps many restaurants respond to rising costs by increasing their menu prices. This can work out well if market demand turns out to be relatively inelastic and people continue eating out despite higher prices.
  • Higher wages might lead to lower employee turnover, reducing hiring and training costs.
  • A higher minimum wage boosts worker incomes, leading to more disposable income in the economy. Although the flip-side is that we canā€™t see strong evidence of higher worker income.
  • Higher wages can force unprofitable, inefficient restaurants to close, leaving stronger businesses with higher market share.

In any case, my big-picture verdict on government intervention into private sector wage rates is: thanks but donā€™t bother. All that effort doesnā€™t seem to have improved actual incomes on a population scale. At the same time, it also hasnā€™t driven industries with workers at the low-end of the pay scale to devastating collapse.

But Iā€™m sure it has taken up enormous amounts of public service time and resources that could undoubtedly have been more gainfully spent elsewhere. More important, as theĀ economist Alex Tabarrok recently pointed out, minimum wage laws have been shown to reduce employment for the disabled and measurably increase both consumer prices and workplace injuries.

Todayville is a digital media and technology company. We profile unique stories and events in our community. Register and promote your community event for free.

Follow Author

Business

ā€˜The DNA Of Our Foreign Policyā€™: How USAID Hid Behind Humanitarianism To Export Radical Left-Wing Priorities Abroad

Published on

 

From theĀ Daily Caller News Foundation

By Thomas English

Behind the veil of humanitarian aid, the U.S. Agency for International Development (USAID) doled out billions in taxpayer dollars to engage in left-wing social engineering abroad ā€” from rampant LGBT advocacy to diversity, equity and inclusion (DEI) programs and tech censorship.

President John F. Kennedy established USAID in 1961 to, inĀ his words, ā€œprovide generously of our skills, and our capital and our food to assist the peoples of the less-developed nations to reach their goals in freedom.ā€ The agency, though, has reinterpreted Kennedyā€™s mission statement to mean thatĀ EcuadorĀ suffers from a lack of drag shows, thatĀ Peruvian comic booksĀ are too light on transgender representation, that theĀ Serbian workplaceĀ is insufficiently welcoming to the homosexual community ā€” while also offering social media platforms a host of creative tactics to suppress those who disagree with USAIDā€™s social agenda.

ā€œItā€™s probably one out of every three grants is totally insane left-wing nonsense ā€¦ USAID has always been somewhat left, but when the Biden administration started, you can clearly see a huge uptick in spending,ā€ Parker Thayer, who researches federal spending at Capital Research Center, told the Daily Caller News Foundation. ā€œThe amount of lunatic, fringe grants goes up dramatically. For example, if you go to USAspending[.gov] and search for the keyword ā€˜transgender,ā€™ the graph is basically a vertical line when you hit 2021. Itā€™s kind of remarkable.ā€

He also emphasized his discovery of a $13 millionĀ grantĀ for an Arabic-language translation of ā€œSesame Street,ā€ calling it ā€œsomething else, man.ā€

Other programs include a $2 millionĀ grantĀ for funding sex-change procedures in Guatemala, $500,000 forĀ LGBT inclusion in Serbian workplaces, $70,000 for aĀ DEI-themed musical in Ireland, aĀ transgender clinic in Vietnam, a similarĀ clinic in India,Ā  $46,000 in HIV care forĀ transgender South Africans, $1.5 million more forĀ South African childrenĀ to ā€œlearn through play,ā€ $20,000 Bulgarians to enjoy a vaguely-defined ā€œLGBT-related eventā€ ā€” programs for which former USAID Administrator Samantha PowerĀ saidĀ ā€œa big pot of moneyā€ wasnā€™t enough.

These and other programs were the vehicle through which Power went about ā€œworking LGBT rights into the DNA of our foreign policy,ā€ a priority sheĀ emphasizedĀ to Harvard students in 2015 during her tenure as U.S. Ambassador to the United States.

ā€œOne of the most common complaints you will get if you go to embassies around the world ā€” from State Department officials and ambassadors and the like ā€” is that USAID is not only not cooperative; they undermine the work that weā€™re doing in that country,ā€ Secretary of State Marco Rubio, who assumed control over USAID on Monday, said. He condemned the agencyā€™s more questionable programs as not only a waste of taxpayer dollars, but a diplomatic liability.

ā€œThey are supporting programs that upset the host government for whom weā€™re trying to work with on a broader scale,ā€ he said.

Beyond pro-LGBT funding, former President Joe Bidenā€™s USAID offered social media platforms a ā€œdisinformation primer,ā€ a 100-page document providing guidance for countering ā€œdisinformationā€ through increased fact-checking and censorship ā€” policies it said would make platforms more ā€œdemocratically accountable.ā€

The document credits some of its content suppression tactics to the Global Engagement Center (GEC), a now-defunct agency that operated under the State Department. To ā€œcounter disinformation,ā€ GEC recommended ginning up ā€œmoral outrageā€ against content that ā€œviolates [the] sacred valueā€ of what it considers ā€œthe truth.ā€

Biden seemed to heed GECā€™s guidance on moral outrage during the height of the pandemic in 2021,Ā accusingĀ Facebook of ā€œkilling peopleā€ by insufficiently censoring anti-vaccine content on the platform. Facebook founder Mark ZuckerbergĀ recalledĀ during his Jan. 10 appearance on ā€œThe Joe Rogan Experienceā€ an instance when the Biden administration pressured him to censor a satirical meme about vaccine side effects. Biden later walked back his accusation against Facebook in anĀ interviewĀ with CNN.

The USAID-funded primer also recommended ā€œadvertiser outreach,ā€ a strategy that would financially throttle agency-disfavored informational outlets by informing advertisers of potential damage to brand reputation.

ā€œ[Advertisers] inadvertently are funding and amplifying platforms that disinform. Thus, cutting this financial support found in the ad-tech space would obstruct disinformation actors from spreading messaging online,ā€ the Disinformation Primer reads. ā€œEfforts have been made to inform advertisers of their risks, such as the threat to brand safety by being placed next to objectionable content.ā€

The document further characterized the legacy mediaā€™s recent decline ā€œleading to a loss of information integrity,ā€ which thereby justifies USAIDā€™s efforts to combat those ā€œcasting doubt on media.ā€

ā€œIt leads to a loss of information integrity. Online news platforms have disrupted the traditional media landscape. Government officials and journalists are not the sole information gatekeepers anymore ā€¦ Because traditional information systems are failing, some opinion leaders are casting doubt on media, which, in turn, impacts USAID programming and funding choices,ā€ the document continued.

USAID also faced intense congressional scrutiny in 2023 after allegations emerged that its PREDICT program and subsequent grants to EcoHealth Alliance potentially funneled U.S. taxpayer funds into gain-of-function coronavirus research at the Wuhan Institute of Virology ā€” which raised questions about USAIDā€™s possible role in contributing to the origins of the COVID-19 pandemic.

 

Republican Kentucky Sen. Rand Paul complained that USAID refused to hand over documents pertaining to the allegations and the agencyā€™s funding habits.

ā€œThe response I got from your agency was: ā€˜USAID will not be providing any documents at this time.ā€™ Theyā€™re just unwilling to give documents on scientific grant proposals ā€” weā€™re paying for it, theyā€™re asking for $745 million more in money. We get no response,ā€ Rand said. ā€œWeā€™re not asking for classified information. Weā€™re not asking for anything unusual. 20 million people died around the world ā€¦ and you wonā€™t give us the basic information about what grants youā€™re funding ā€” should we be funding the Academy of Military Medical Research in China?ā€

Secretary of State Marco Rubio echoed Randā€™s transparency concerns after announcing he was the USAIDā€™s new acting director Monday, calling the agency ā€œcompletely uncooperative.ā€

 

ā€œTheyā€™re one of the most suspicious federal agencies that exists,ā€ Thayer told the DCNF, suggesting the agencyā€™s reputation for being opaque is justified. ā€œItā€™s kind of a character trait for USAID to be less than transparent.ā€

Thayer explained that, in his research, USAID is selective in its transparency. The grants he called ā€œcomplete nonsense,ā€ such as the ā€œSesame Streetā€ translation, ā€œare very specific about what theyā€™re doing. And the ones that are vaguely humanitarian-sounding are usually written like someone put a sociology textbook through a word randomizer then just took whatever it spat out and put it on the page. They are so full of jargon words that theyā€™re basically incomprehensible, even to people who understand what the jargon words are supposed to mean.ā€

ā€œI got $1.1 million for a study of youth rural migration in Morocco,ā€ he added. ā€œI literally ā€” I cannot help you in understanding what that could possibly mean. I have no idea what that means.ā€

Elon Musk, the leader of the Department of Government Efficiency (DOGE), claimed that he and President Donald Trump agreed to shutter the agency entirely during anĀ X Spaces conversationĀ early Monday morning. Rubio emphasized in a TuesdayĀ interviewĀ with Fox News that he does not intend to ā€œget rid of foreign aid,ā€ but is considering whether USAID ought to be housed under State Department or remain an autonomous agency.

ā€œThis is not about getting rid of foreign aid,ā€ Rubio said. ā€œThere are things we do through USAID that we should continue to do, that make sense. And weā€™ll have to decide: Is that better through the State Department, or is that better through a reformed USAID? Thatā€™s the process weā€™re working through ā€¦ but theyā€™re completely uncooperative. We had no choice but to take dramatic steps to bring this thing under control.ā€

Continue Reading

Business

Things Are Going From Bad To Worse For The Permanent Bureaucratic State

Published on

 

From theĀ Daily Caller News Foundation

By Morgan Murphy

Welcome to the D.C. Thunderdome.

Thanks to DOGE and four wunderkind coders in Treasuryā€™s basement, AmericansĀ learnedĀ this week that their government sent millions to fund a ā€œDEI musicalā€ in Ireland, aĀ ā€œtransgender comic bookā€Ā in Peru, electric vehicles in Vietnam, and anĀ Anthony Fauci exhibitĀ at the NIH Museum.

Faster than Ludicrous+ mode on a Tesla, the Trump adminā€™s new code bros are sifting through the financial ledger of Americaā€™s spending. Just 20 days in office and the new administration has saved the American taxpayer billions of dollars ā€” exactly what Trump promised on the campaign trail. And as the presidentā€™s third week unfolded, news worsened for Democrats and Americaā€™s permanent bureaucratic state.Ā 

It seems the permanent bureaucracy borrowed the U.S.S.R.ā€™s media playbook,Ā funneling millionsĀ to left-wing news organizations such as The New York Times, Politico and Reuters. Evidently it wasnā€™t enough that a Republican in the newsrooms of our state-run media outlets, PBS and NPR, is rarer than a cogent sentence from Kamala.

Democrats, meanwhile, have decided that this Deathstar boondoggle of government spending at its worst is the hill they want to die on. Conservatives watched with glee as Rep. Maxine Waters, Sen. Chuck Schumer, et al, led the Charge of the Lightweight Brigade to USAIDā€™s former headquarters. Cue dopey chant: ā€œwE Will wiN!ā€ (2025 updateā€”no, you didnā€™t).

Before all theĀ spending pornĀ (as the great Louisiana wag, Senator John Kennedy dubbed it), Democratsā€™ opinion polls wereĀ in the gutter, with a disapproval rating of 57%.

Do the Dems think rushing to the barricades to defend out-of-control spending will earn them the respect and admiration of the American public? Expect their approval ratings to continue to sink like the Hindentanic.

USAID is just the beginning.

Wait until DOGE bites into the Department of Defense, which has never passed an audit.

In 2019 while on reserve duty at the Pentagon, I was thrown into yet another meeting chockablock with PowerPoint slides, so beloved by our military. This particular meeting was to cover the results of a service-wide audit. To summarize about 187 slides and 2 hours: we failed.

All the top brass in the room somberly listened to the auditors describe $5 billion worth of missing aircraft engines, leases for buildings and land that did not exist, accounting systems closer in age to the abacus than a modern spreadsheet, and miles of missing debits and credits.

As the most junior officer in the room, I kept quiet but closely studied the faces of my superiors. They too, kept quiet, only murmuring ā€œnext slideā€ as disaster after financial disaster was flashed across the screens.

My inner fiscal hawk prayed that the service chief would flip the table over and channelĀ  Col. Nathan ā€œYOU CANā€™T HANDLE THE TRUTHā€ Jessep. But he remained impassive and the meeting dissolved with a whimper and no plans for reform.

That night leaving D.C., I happened to bump into a very senior republican senator at Reagan National Airport and thought it my civic duty to share the (unclassified) events of earlier in the day. I told the venerable appropriator that the audit had revealed billions in waste, fraud, and abuse, and even suggested he should make a request to see the failed audit for himself.

(In the hindsight afforded by three years working in the U.S. Senate, I now know how utterly naive this moment was).

He paused a moment, then said, ā€œWell, you know how these things are. Thatā€™s Washington for you.ā€

I felt sick at the time, which is likely the same feeling many Americans are having this week as they see the grift laid bare in our nationā€™s capital.

But the good news is that Trump and his DOGE team have restored the hope that government might be right-sized and returned to solid financial footing.

On Friday, when he was asked about the job Elon Musk is doing, the President remarked, ā€œI think weā€™re going to be very close to balancing budgets for the first time for many years.ā€

What a tantalizing prospect ā€” a government that spends within its means may truly bring about the golden age of America promised in the presidentā€™s inaugural address.

Morgan Murphy is military thought leader, former press secretary to the Secretary of Defense and national security advisor in the U.S. Senate.

Continue Reading

Trending

X