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January 05, 2015

Opinion: Raising Minimum Wage Puts Nonprofits at Risk

As minimum-wage hikes take effect in more than two dozen states and cities, the demise of a charity-run restaurant in a small Michigan town highlights the dangers the mandated pay raises pose for social-service organizations, according to a Wall Street Journal column.

The piece by Michael Saltsman of the Employment Policies Institute, a fiscal-policy think tank that has received funding from the restaurant industry, focuses on Tastes of Life, an eatery in Hillsdale, Mich. The restaurant was operated by nonprofit group Life Challenge to provide training and work experience to people who have difficulty landing jobs, like ex-convicts and recovering addicts.

Jack Mosley, a pastor who runs the charity, closed the restaurant and laid off a dozen employees in September after Michigan raised its minimum wage. The "unintended consequences" of such increases will "repeat themselves in locales small and large each time legislators heed the populist call to 'raise the wage,' " Mr. Saltsman writes.