Economics in One Lesson … via The Today Show

People who are sick of the welfare-regulatory-entitlement nanny state do have perfectly legal means of fighting back. You have more options than simply shrugging and asking, “What can I do?”

Case in point? Consider this story recently reported at Media Research Center (mrc.org) on 8/7/14:

On Thursday’s NBC Today, co-host Savannah Guthrie noted a restaurant in Minnesota that found “a unique way to offset the added expense” of the state hiking its minimum wage: “The Oasis Café is now including a ‘minimum wage fee’ on bills. You see it right there on the bill. Totals 35 cents….the cafe’s owners say this wage hike is going to cost them $10,000 a year, this is their way of protesting it…

It may be a unique way of protesting, but it’s also an obvious one. The amazing thing is we don’t see it more often.

The principle is a simple one. Whenever government passes a new law with additional requirements on private business, the business must do two things: One, implement the requirement; and two, adjust for the cost of the requirement. Customers should be informed as to why the price is going up. It’s good business, for one thing. Customers have a right to know that prices were not raised for arbitrary reasons, nor as an insult (as people often mistakenly interpret price increases); they should also know it’s not due to normal supply and demand. Something costs more because the government is requiring it. It’s no different than if the government — who never gets the blame for cost increases — walked into the business and demanded, “Raise your prices.”

Perhaps many of the customers now paying higher costs applauded and encouraged their elected officials in doing such things as hike the minimum wage. But they should also know the consequences. They have a right to know and, if they support those policies, they have a responsibility to know what it is they’re supporting and encouraging their elected officials to do.

[Today Show co-host] Guthrie touted: “Now complaints are piling up on the cafe’s Facebook page. One man says, ‘Look, if you can’t afford to pay your employees, then you shouldn’t be in business.'” Fill-in co-host Carson Daly chimed in: “I’d rather not know. Hike a cost here or there, get your 35 cents and don’t tell me.”

What? Don’t tell me … I’d rather not know? Carson Daly must be kidding, right?

If you’re in favor of minimum wage hikes, then you should want to know once they’re implemented. You will probably feel good that it’s happening, and you might even want to make sure others know you supported the hikes. “Look at me. I support minimum wage hikes. I support them at the ballot box, and I applaud them here.” I won’t agree, but at least you’re consistent.

Why on earth would Carson Daly not want to know? Is he implying that he realizes such laws raise the cost of everything — but doesn’t want to know that? But it’s true, whether you allow yourself to know it, or not. This strikes me as worse than foolish; it seems morally incomprehensible, and psychologically warped to say such a thing, whether about minimum wage or anything else relevant to one’s life.

As for not being able to “afford paying your employees,” this Minnesota restaurant owner isn’t saying that. The restaurant owner is conveying, “I could afford to pay my employees–before the government intervened.” Whether the owner is able to pay more isn’t even the main point. The owner is free to choose — or at least should be free to choose — based on what the going rate is. If the owner pays too little, he’ll suffer economically because he won’t be able to find the best possible staff (or even any) to serve his customers. If he pays his staff too much, by the going rate, then he’ll suffer by losing profits and ultimately having to let some of his employees go or (worst case) close down altogether because of poor business management. These are not laws of economics decreed fair and proper by some arbitrary or external authority; it’s just the way it is.

It’s this “free to choose” principle which will explain the shrieks of outrage and calls for new legislation (to ban such things as the minimum wage fee) should this policy of restaurants and other businesses ever become popular.

The conversation on the Today Show broadcast continued as follows:

Weatherman Al Roker observed: “Because they’ve probably done it other ways without letting you know.” News reader Natalie Morales added: “Right. Without clearly stating it on the bill.” Guthrie concluded: “Yeah, all companies do it, right? But they don’t necessarily say [they’re doing it].”

That’s right. Before now, and still for the most part, businesses don’t tell you when prices are going up because of government edicts, regulations, executive orders, legislation or mandates. Many times, they don’t even know themselves. Such costs are hidden in things like corporate taxes, income taxes, payroll taxes, accounting fees to handle payroll taxes, unemployment taxes, increased fuel costs (think: gas taxes), increased food costs (think: agricultural subsidies, federal edicts and red tape), and a myriad of other things too numerous (even for the brainy regulators themselves) to fully comprehend or calculate.

The minimum wage provides an unusually good opportunity for a business owner to say, “OK. My costs just went up because of this specific government law. Something has to give, somewhere.”

The psychological reaction, embedded in a moral evaluation that we should all serve others selflessly and without complaint, is what leads to things like the Carson Daly reaction in this little exchange, as well as the Facebook comment read on the air. This is the thing the hard-core proponents of the entitlement-welfare-regulatory state — from Barack Obama on down — can neither tolerate nor, ultimately, permit: self-assertive dissension.

Nearly everyone agrees (or senses) that something is seriously wrong with our society, politically but much deeper than that. Polls and common observation bear this out again and again. Probably about half the population will blame this malaise on the lack of such mandates as the minimum wage law. More, more, more government intervention is always the answer. But we already have such mandates, rules and laws in spades; we’re getting more of them all the time, and those in favor of them have won (just about) all the relevant battles and elections that there are to win. So why the complaining on their part?

For those other half (and I hope my estimate is right) who cheer the decision of this Minnesota restaurant to be candid and explicit about what the government does to them, it offers a bright ray of hope for fighting back. Let’s call it: civil disobedience for business. No, technically it’s not illegal, so it’s not disobedience. But those who oppose it will treat it that way — I guarantee. Which makes it all the more important to assert it.

Go ahead, regulators, and other advocates of imposing your secular religion of brother’s keeperism on the whole population by force. Keep doing it. But we — in business, and elsewhere — will publicly say aloud what you’re doing, what we think of it, and inform people of the actual economic consequences of it. We have no choice but to accept your rulings, but we can still speak out against them and call them what they are.

The actions of this Minneosota restaurant are a stroke of brilliance.

 

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