DailyKenn.com — Employees at two Kroger stores in Long Beach, California lost their jobs after the city forced the grocery chain to boost workers' pay by $4 per hour.
But instead of receiving a $4 pay increase, the workers found themselves without jobs. Apparently, Kroger management deemed the stores to be more trouble than they were worth, or flat-out unprofitable.
Such is the outcome of government meddling in free markets.
Take aways...
• Unions reportedly applauded the hero pay and, in so doing, applauded the termination of at least 600 jobs.
• To sustain a profit margin, businesses must increase prices to accommodate forced pay raises, such as a $15 minimum wage. Price increases effectively absorb the pay raises. For example, when the minimum wage was about $1.35 per hour, a bottle of Coca Cola cost about 25 cents.
• It's a chicken or egg dilemma: Which causes which? Do increased wages force higher prices? Or do higher prices demand higher wages?
• Forced pay hikes also discourage workers from improving their jobs skills.
Excerpted from foxbusinesss.com ▼
Hero pay ordinances bump pay for workers in retail stores and pharmacies with 300 or more workers due to the hazards of the COVID-19 pandemic. In Long Beach, eligible workers have seen a $4 per hour increase in their wages.
Democratic Mayor Robert Garcia approved the ordinance in January. Other cities in California have taken similar measures, with Los Angeles approving "hero pay" in March at $5 an hour.
Local leaders and union workers applauded the move, but the measure did not pass entirely with fanfare: The California Grocers Association immediately filed for an injunction on the pay hike, but a federal judge denied the effort.
200 latest news reports from 100 top conservative websites