The city of Reno might increase recreational fees to cover the cost of labor as Nevada’s minimum wage goes up

Minimum wage hikes do not come with zero costs. Usually, any raise in the minimum wage has to be paid out in some way. When businesses have to pay their workers more money, for example, they raise prices to cover the high costs of labor. And that is exactly what the local government for the city of Reno has discovered about their recently enacted law which raised the city’s minimum wage.

The state of Nevada passed a law to increase the minimum wage gradually — starting with a 75c increase in July. The law raises the minimum wage to $11 by 2024 for employees who get health insurance through their employer, and $12 for those who do not.

Due to this law, Reno’s Parks and recreation department needs to raise the wages of the lifeguards and coaches that it employs. And for that, the city will see its costs go up by $2.7 million over the next 5 years.

So, for right now,

Reno officials are considering whether to address this new reality by raising prices. The cost for seniors to swim could increase from $2.50 a day to $4 daily in 2024. The cost of a daily visit to one of the city’s activity centers could jump from $1 for adults and seniors to $7 for adults and $4 for seniors by 2024. The cost of its before and after school programs may jump, too. The daily rate for the morning program may go from $10 to $15 by 2024.

This might, of course, lower the demand for recreational services in the city. The city may end up having to cut employment in order to cut costs if demand falls to the point where revenue cannot cover the cost of services. But even more importantly, these high costs will potentially eat away at some of the wage gains that will come from the minimum wage hike.

In short, we see evidence yet again that minimum wage hikes are not a good policy for raising wages. They increase costs and end up hurting people it is meant to help.