An orchardist once tried to explain to me the effect of the state’s minimum wage on his employees. His was a small business with a multi-million-dollar payroll. Labor was a huge share of his expense. By custom his harvest workers were paid based on their productivity — so many dollars for every bin of apples picked. Most justly earned well above the minimum wage, a reward for speed and efficiency. The orchardist could check their progress, calculate his labor cost per bin, and know if markets were kind he may make a profit.
But every so often he hired a rookie, someone new who no matter how hard they tried could pick far less fruit per day than the experienced hands. While the experienced worker might fill eight bins a day, the rookie might make two or more. That was a problem. The orchardist was required to make up the difference and pay the rookie the equal of the state minimum wage, which meant the rookie was paid more per bin than the top hands. The orchardist could measure his labor cost per unit and see he was losing money on every bin the rookie picked. Absent a sudden increase in productivity, the rookie was let go.