Are New Minimum Wages Fueling Layoffs?

Many have argued that minimum wage laws price certain people out of the job market skill-wise and also lead to layoffs as small businesses cope with their finances and the added burden of higher wages. In this light, it's notable that fully 40 percent of the 693,000 who lost their jobs in the latest ADP report (November-December 2008) were from small businesses. Arthur Bruzzone, a former California state commissioner, frequent columnist and native of the city, writes that San Francisco is really courting disaster with its minimum wage of $9.79 (one of two cities with minimum wages above $9). Team that new rate with mandates to provide health care, paid sick days and transportation assistance, and you can see that City by the Bay small businesses are headhunting--counting heads to chop off the payroll, that is. In "City Hall's 'progressive' small business mandates will now exact pain," Bruzzone writes:

City Hall is responsible for bleeding San Francisco's small businesses. Now the City Hall's progressive initiatives will bring real pain to thousands of San Franciscans. Of course, those who keep their jobs will have sick leave, health care, higher hourly wages. But what of those who have no job?

Another in a series on the unintended (but foreseeable) consequences of good intentions.