We can’t really know the true extent of Chicago’s crime problem because officials lie about it. But I think we can guess that it will get much, much worse if the city suddenly is hit with a wave of unemployment and closed businesses.
The geniuses who run the city government could easily bring that to pass. According to Reuters,
A group of Chicago aldermen on Wednesday introduced a proposal to boost the minimum wage in the nation’s third-largest city to $15 an hour, joining officials in other major U.S. cities who also are considering a hike.
The group proposing the wage increase is separate from a panel Chicago Mayor Rahm Emanuel named last week among aldermen, labor and business leaders to provide recommendations for raising the minimum wage.
Alderman Ricardo Munoz said 12 to 15 of the 50 council members support the proposal to raise the minimum wage to $15 per hour and he expected more to join.
The increase would match the minimum pay that fast-food workers have sought during national protests and would help Chicago’s economy, Munoz said.
“Study after study demonstrates that when you put money into the pockets of consumers, they spend it,” Munoz said. “They don’t hoard it in their mattresses.”
Munoz is not the brightest light in Chicago (or maybe he is!). Someone might point out to him that his law doesn’t mandate that more money get put into anyone’s pockets. All the law would do is mandate that, if you employ a person you must put money into his pockets. Instead of asking what happens “when you put money into the pockets of consumers,” Munoz might profitably ask himself: “What happens when you double the labor costs of business owners?”
He could also ask himself, “What happens when suddenly more items are bought?” I’ll give you the answer to that one. When items start moving off the shelves more quickly, business owners realize they are not charging enough for the item. They have to raise the price or else run out of the product, sending other willing buyers to look elsewhere.
So minimum wage going up is going to mean some combination of price inflation and greater joblessness. We can’t be sure until it happens. What we can be sure of now is that it won’t mean greater prosperity.
It might easily lead to greater crime rates.
Hat tip: Zero Hedge