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New York’s $15 minimum wage creates carwash black market

NEW YORK — In the name of protecting workers’ rights, the government lost many workers their jobs.

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NEW YORK — According to www.reason.com, over the past six years, the New York carwash industry, which employs mostly low-skilled, immigrant workers, has been the target of lawsuits for alleged underpayment of wages, a handful of which were started by the New York State Attorney General’s office.

In addition, the working conditions of the industry also helped provide a reason for the state to raise its minimum wage to $15 per hour, which will take full effect for New York City carwashes in January 2019, the article continued.

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However, instead of the intended effect, the impact of the recent unionization drive, the lawsuits and the push for raising the minimum wage caused many carwashes to either automate or shut down, the article stated.

Now, there are more unintended consequences, the article noted: There is a growing black market, where people do illegal carwash work out of vans parked on the street, because the minimum wage has made it illegal for professional carwashes to hire the workers at the market rate.

In addition, businesses that chose to automate are benefitting from the rise in the minimum wage, because outlawing cheap labor has made it more difficult for competitors to undercut automated business on prices and services, the article stated.

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Reason created a video summarizing the evolution of the situation, which you can watch here, in addition to reading the original article.

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