Food Service Industry Unhappy After House Votes to Increase Minimum Wage

In a move that could reverse all the gains of the Trump stock market and send the economy spiraling downward, the U.S.House of Representatives passed a bill to increase the minimum wage to $15 per hour. 

What: After a hard fight over a period of years, Democrats finally made some progress in the #FightFor15, voting to raise the minimum. But not everyone is happy.

“Thousands of restaurant industry employees, leaders and community members have called and emailed Congress to share their concerns about how H.R. 582 would cripple small- and family-owned businesses,” National Restaurant Association spokesperson Sean Kennedy said, according to CNBC. “H.R. 582 is the wrong wage at the wrong time, implemented in the wrong way.”

The bill would still have to pass the Republican controlled U.S. Senate, and then be signed into law by President Trump.

Why It Matters: Several U.S. cities and states have already begun a gradual increase in the minimum wage resulting in the unsurprising consequences of layoffs and business closings, primarily in foodservice related  industries.

Wednesday, Restaurants Unlimited, a high-profile restaurant chain based in Seattle that operated 35 restaurants, filed for Chapter 11 bankruptcy citing the city’s $15 minimum wage.

While this effort is aimed at providing a “living wage” for unskilled workers, common sense and basic economics tells us that it will do the exact opposite.  Retailers like Walmart and Target, restaurants and hotels and low margin service industries will be forced not only to lay-off workers, but also raise prices on consumer goods, hurting the people who are supposed to benefit from the law the most.

With the emergence of automation, there is also a chance that retail employees will be replaced completely by robots.


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