By Megan McArdle
August 1, 2015
In case you hadn’t heard, New York is raising its minimum wage to $15 an hour — but only for fast-food workers at places with more than 30 locations.
At first glance, this seems bizarre. Why fast food? Why places with more than 30 locations? In The New York Times, Josh Barro notes that these sorts of policies create substantial distortions — radically altering the labor market for unskilled labor, for example, and potentially discouraging chains from growing beyond 29 locations.
They’ll also put existing fast-food outlets at a disadvantage to smaller chains, which sounds great when you think about all those McDonald’s Corp. executives with their massive bonuses, and less great when you realize that franchising is the way a lot of minorities and immigrants climb the ladder to economic prosperity.
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