The $15 Minimum Wage’s Silver Lining: Weak Enforcement (New at Reason)

In theory, the $15 minimum wage could eviscerate New York City’s small retail and restaurant sectors. In reality, the law’s impact on the economy will be significantly blunted by weak enforcement—a mitigating factor that doesn’t get the attention that it should in the minimum wage debate.

Ensuring that businesses comply with government-mandated wage floors falls primarily to a dysfunctional and understaffed division of the state government. Many businesses don’t heed the current $9 minimum; when the rate rises to $15, the ranks of the noncompliant will swell.

The $15 minimum, which is essentially a prohibition of low-wage work, will destroy lives. Some small businesses will attempt to follow the rules and go under; others will find ways to get by with fewer workers. Among the noncompliant, those unlucky enough to get caught will face ruinous fines. The city’s shadow economy will expand.

Yet, as Jim Epstein writes, the government’s inability to enforce the $15 minimum is the silver lining of a potentially disastrous policy.

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