AOC-Supported Agenda Is What Drove Her Former Employer Out of Business
Raising the minimum wage to $15 an hour has proven to be a disaster for many business owners who’ve adopted the new pay scale — whether they were forced by government mandate or they just wanted to wear their progressive hats.
And it sure sounds like the former employer of New York Rep. Alexandria Ocasio-Cortez, one of Congress’ more vocal proponents of raising the legally mandated minimum wage, has firsthand knowledge of how dangerous that policy can be.
Ocasio-Cortez herself, meanwhile, returned to bartending in New York City on Friday. She mixed drinks and served food at a local restaurant in partnership with One Fair Wage, an organization advocating for a federal minimum wage increase for tipped employees, according to Vox.
The 29-year-old freshman congresswoman and former bartender returned to her roots to show her support for the Raise The Wage Act, a bill that would double the federal minimum wage by 2024.
“All labor has dignity. And the way that we give labor dignity is by paying people the respect and the value that they are worth at minimum. We have to make one fair wage and we have to raise the national minimum wage to $15 an hour, nothing less,” Ocasio-Cortez said.
@AOC: “Any job that pays $2.13 an hour is not a job. It’s indentured servitude.” pic.twitter.com/BqI5TPeSXT
— ROC United (@rocunited) May 31, 2019
Now, if I were a worker who depended on tips, I might — at least on the surface — be thrilled with this proposal.
But if I used logic and common sense, I would quickly realize that if business owners are forced to subsidize such a massive wage increase for tipped workers, things would go south, and fast.
Many business owners work an untold number of hours each week just to keep the lights on, so being forced to give tipped workers such a large pay raise obviously means they would need to increase revenue.
Increasing revenue usually involves raising prices for goods and services. And when prices for goods or services are raised, that typically means fewer customers.
Fewer customers means less revenue. It also means slashing jobs and overhead to keep the wheels turning.
It’s basics economics. But you don’t have to take my word for it.
According to the Washington Free Beacon, one of Ocasio-Cortez’s previous employers, the Coffee Shop, had to close in October 2018 ahead of a New York state mandate, which forced businesses with more than 11 employees raise the minimum wage to $15 an hour, going into effect this year.
Charles Milite, who co-founded the business, used simple math to explain why the Coffee Shop shut down.
“I know it doesn’t sound like much — $2 an hour,” Milite told Crains New York Business in April. “But when you multiply it by 40 hours, by 130 people, it becomes a big number. It was going to increase our monthly payroll $46,000.”
In other words, forcing minimum wage increases can lead to financial disaster, which in turn can lead to layoffs.
That’s already happened elsewhere in the United States, as the Employment Policies Institute has noted, and it will continue to happen if Ocasio-Cortez manages to get the Raise the Wage Act passed.
“Any job that pays $2.13 an hour is not a job, it’s indentured servitude,” Ocasio-Cortez said Friday, referring to what some employers pay their tipped workers per hour.
But that statement isn’t entirely accurate.
There are plenty of servers and bartenders — I know quite a few, in fact — who make several hundred dollars per shift.
Many of those workers use that cash to pay their way through college or improve their lives in other ways. Working in one of those positions can be a great side gig.
And I’ve never once heard them complain about putting that cash in their pocket at the end of a shift.
As long as liberals keep pushing the false notion that raising the minimum wage to unreasonable levels will make everything better, small business owners will continue to suffer the consequences.
And that’s bad for everyone.
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