Seattle celebrity chef and James Beard Award winner Tom Douglas does not approve of the $15 minimum wage law. Douglas supports a minimum wage increase. He has even put his money where his mouth is by raising the wages of his kitchen (or back-of-the-house) employees. But, he has been vocal about his frustration over the direction that Mayor Ed Murray and the city council were headed without much thought for the economic consequences of their clearly political vote.
Douglas wrote last year of Seattle’s $15 minimum wage experiment,
“I would be lying to say that I’m not concerned with the outcome of this national experiment happening in the Seattle market. It is also not lost on me that our City Council and Mayor’s office have very little small business experience. While they have budgets to live by, they are not playing with their own cash… They might get voted out of office for their actions and decrees, but they won’t go bankrupt. It is inherently easier to spend other people’s money than the gut check of investing your last dime into a dream.”
Douglas also called the $15 minimum wage potentially the “most serious threat to our ability to compete so far.” As a business owner who employs more than 500 workers, Douglas must follow the “fast-track” implementation of the $15 minimum wage law. That means he raised the minimum wage to $11 an hour in his restaurants on Wednesday. By 2017, he must increase the minimum wage to $15 an hour.
He initially chose to deal with the serious threat to his businesses—Douglas owns 14 Seattle-based restaurants and employs more than 800 people—by applying a 2 percent minimum wage surcharge, which he referred to as a “2% Wage Equality Surcharge (WES) for funding the Mayor’s Seattle livable wage initiative.”
Douglas wrote in a letter explaining his decision that he and his team “felt the most competitive and least intrusive” way to deal with the $15 minimum wage law is to “implement a [2 percent] surcharge equal to the increase in wages until all restaurants in Seattle are on the same playing field.” The letter is well worth a read (check it out here). It includes lines like: “15NOW ended up being $11 in April, 12.50 in 2016, $13.50 in 2017… Why were the boisterous $15NOW folks not picketing the Mayor’s and the city council’s offices for their failure to act, and why was Ms. Sawant being arrested lying in the streets of Seatac and not Seattle?”
According to the Seattle Times, Douglas has since removed the 2 percent surcharge—and the letter from his website. He has, instead, decided to reconcile the added costs by raising menu prices as suggested by many blog commentators who felt that his decision was “political.” Douglas also backed down from his “political comments” after receiving a plethora of negative reviews on various community sites.
It appears that, in Seattle, liberals don’t only want to dictate how businesses do business through their demands. They also want to dictate how businesses comply with their demands.
It’s disappointing to watch Douglas being forced to back down from his decision—and his comments—due to pressure from the very well (union) organized minimum wage crowd. It’s difficult to watch him feel the need to re-track his “political” comments just because they were not received well by liberals with extreme demands. But, those of who support free markets believe it’s his right to do what he wants with his business, because it is his business.
Restaurant owners are responding to the $15 minimum wage law using various strategies. Douglas will raise menu prices. Ivar’s restaurants will increase menu prices, eliminate tipping and pay a flat $15 minimum wage. Ivar’s expects, under the new policy, its employees will make the same amount of money. And, as the Seattle Times reports, Pho Cyclo Café is “cutting its hours and moving toward more automation.”
Wait a minute, liberal elites said the minimum wage increase wasn’t going to effect the cost of having lunch in Seattle. No wait, liberal elites said it wouldn’t effect them from being able to have lunch in Seattle.
Wait a minute, liberal elites said the minimum wage increase wasn’t going to effect the cost of having lunch in Seattle.
Provide at least one example of one liberal claiming prices wouldn’t rise as a result of Seattle raising our minimum wage, or stop your whining. Put up or shut up. (I boldly predict you’ll lack the character to do either.)
No wait, liberal elites said it wouldn’t effect them from being able to have lunch in Seattle.
You could afford to eat at one of Tom Douglas’ restaurants? We Seattle liberals shouldn’t have been giving you welfare bums in Eastern Washington so much of our tax money!
Your response reveals how elite you think you are and exposes your lack of character, narcissism, and partisanship. It also exposes your lack of tolerance and freedom to express ideas which oppose yours. (I boldly predict you still will still eat at his restaurants because you lack the character to stand behind your convictions.) None of your tax money is needed except to pay for the numerous social programs you continually vote for.
Your response reveals how elite you think you are…
Asking for even one single piece of evidence for a claim supposedly makes me think I’m an elitist here? Although substance is indeed always in very short supply at this blog, even I’ve never written anything so negative about this site!
…exposes your lack of character, narcissism, and partisanship.
I heartily admit to lacking narcissism and partisanship. (As for character, your response clearly shows you do not understand the term, so I have no issue with you there.)
I boldly predict you still will still eat at his restaurants because the dining experiences there are excellent and the owner is obeying the law I support, so why should I not dine there?
Fixed it for you; you’re welcome, but do please try harder next time.
None of your tax money is needed except to pay for the numerous social programs you continually vote for.
Government welfare which the inhabitants of Eastern Washington eagerly consume, while voting for Republicans:
But perhaps the most glaring example of our rural welfare state comes in the category of “welfare” itself, where 2008 data from the state Department of Social and Health Services (DSHS) clearly illustrates just how dependent on Western Washington tax dollars many Eastern Washingtonians have become. King County, home to our state’s largest concentration of urban poor, drew only $538 of DSHS expenditures per capita, ranking it 30th out of 39 counties. Meanwhile, such bastions of self-proclaimed self-sufficiency as rural Adams, Ferry, Pend Oreille, and Okanogan Counties consumed per capita DSHS benefits of over $900, while Yakima County—Washington’s “fruit basket”—topped the charts at $1,129 per person.
See how he picks your comments apart trying to get under your skin. Don’t let him because he isn’t worth the time
Can you say: “A very large immigrant population lives in Eastern Washington”, encouraged by the liberal push to facilitate illegal immigrants even when committing minor crimes.. One wonders where so much of the welfare checks and Medicaid goes to…
Can you say: “A very large immigrant population lives in Eastern Washington”,
Yes, they are working as undocumented labor for the farmers and orchardists. Those welfare payments are, therefore, effectively another subsidy for those businesses, the owners of which vote Republican in overwhelming numbers.
If those businesses would pay living wages, maybe Eastern Washington wouldn’t need so much welfare money from central Puget Sound.
“Living Wage”…what exactly IS that?
First off, the minimum wage is an abomination. Forcing a business owner to pay a certain amount to his employees is wrong in itself. What gives government the right to dictate what a private citizen pays his employees?
Secondly, the minimum wage was (unless you can show me, otherwise) so a single person could support himself…not an entire family of 4! If that person wants to marry (a spouse of the opposite sex) and raise a family, he should go out and get a higher paying job (like the rest of us) and not have the government require his current employer to go broke supporting his family.
This thing is a double edged sword, and not what you’re probably thinking…an employee feels trapped in a low paying job because he feels that he has to have that job to survive. When forced to raise wages, an employer feels a similar kind of entrapment because his business is also his livelihood. If you close your business in revolt, putting your employees out of work, you’re putting yourself out of work as well and the government knows this! That’s the reason they are so successful at getting away with it.
Lastly, while you go on about eastside welfare bums, sucking up all your tax dollars…just wait until all those small businesses go down, due to these stupid laws. The westside welfare bums won’t be far behind us.
Oh, I always have to inject this into many discussions…how do you feel about gun control? That question, alone, will aid me in deciding just what kind of mentality I’m dealing with.
Lastly, while you go on about eastside welfare bums, sucking up all your tax dollars…
We all know just how much conservatives have always hated talking in such terms, yes.
….just wait until all those small businesses go down, due to these stupid laws.
SeaTac’s minimum wage has been $15/hour for over a year. How many “small businesses” there have closed? Washington state has the highest minimum wage in the country; how is our state’s economy doing, especially when compared to, say, Idaho — a state with one of the lowest minimum wages?
Oh, I always have to inject this into many discussions…
No, you could freely choose to stay on-topic — if only you had the discipline and character to do so.
…how do you feel about gun control?
I’ve always found that a firm grip, a steady finger on the trigger, and careful sighting have enabled me to hit every target I’ve ever aimed at, no matter what type or caliber of firearm I shot. You?
Oh, yes…I’ve hit a target or two. Multiple rifle and pistol “Expert” medals and a stint as a shooting instructor for Marine officers.
Thanks for your response, you’ve shown me that you’re probably worth debating (unlike many mindless trolls), after all.
Maybe you should buy a farm! Since the population of farms is diminishing while the population of the world is increasing, I would love to hear your twisted logic on how to fix that. Though I would imagine you are one of those urban hippies that has a garden on your roof, so that probably isn’t high on your priority list.
Welfare in E. Washington? Sure but what would you expect when liberals salivate over providing free rides to illegals, i.e. which make up a large % of these numbers working on the farms to provide the food on your plate? Lib’s advertise to provide more handouts to illegals and others who don’t need the assistance, even to the point of protecting them in liberal la la land in Seattle from being reported to ICE. It’s your ilk that have caused the economic pain as liberals like to choose the winners and losers by redistributing the taxpayers money with no accountability.
Bully
You are my example, Hamster Brain. You are the example of every liberal talking point that comes from the democratic party. You throw out so much progressive bull$hit that you forget what you have said. Its time to go back through you’re copy & paste life. That’s the problem with liberals, “it’s not a lie if you belive it”, problem is, you are the only one who belives it.
You are my example, Hamster Brain.
Thank you for validating my prediction.
Jay Inslee
So much or YOUR tax money. Most of YOUR people live in apartments and pay no property taxes. The greatest number of food stamp and welfare recipients are on YOUR side of the state. Most of the taxes for roads go to YOUR side of the state. As a matter of fact, the greatest percentage of taxes payer monies is spent on YOUR side of the state. The state is in debt up to it’s ears because of voters on YOUR side of the state. Perhaps you should check your facts before you spout off at the mouth. Liberals try to act like they know it all but most are just plain brain dead.
Seattle is the sphincter of WA state for sure.
Most of YOUR people live in apartments and pay no property taxes.
Further proof that conservatives know absolutely nothing of any value whatsoever about economics. The renters in an apartment building pay ALL of the costs of operating that building, plus any profits the owner makes. Property taxes may not be an itemized detail on the rental agreement, but let me tell you, those taxes tend to be the first thing the owner cites when raising the rent.
The greatest number of food stamp and welfare recipients are on YOUR side of the state.
[citation needed]
Most of the taxes for roads go to YOUR side of the state.
[citation needed]
As a matter of fact, the greatest percentage of taxes payer monies is spent on YOUR side of the state.
If so, that make sense, because it’s collected here. Elsewhere in this thread, I cited data from a 2008 study the state did on revenues versus expenditures. In that study, King County’s residents received sixty-two cents in state services for every tax dollar we sent to Olympia. The state recently repeated that study for 2012, and King County now gets sixty-five cents per dollar.
Also in that study: King County provided 41.28% of the state’s tax revenues; Pierce County provided another 9.58%; those numbers sum to 50.8%. In other words. those two highly urbanized counties provided more tax money to the state than did all of the other thirty-seven counties combined.
The state is in debt up to it’s ears because of voters on YOUR side of the state.
King County’s taxpayers sent just over $6 Billion to the state, and received just under $4 Billion in state services. If every county’s taxpayers were as economically productive as are we here in King County, we’d have no problem funding education, transit, parks, environmental cleanup, and everything else we want — while drastically cutting taxes.
Perhaps you should check your facts before you spout off at the mouth.
Yeah, maybe you should.
Eastside…..every time a Liberal opens their mouth, they lie….it’s a given!!
When the rents rose on any of his fourteen restaurants, did a “greedy landlord surcharge” appear on the menus? How about when the price of ingredients rose — was there an “avaricious farmer surcharge” on the bill then?
No, the prices on the menus rose without any notice or fanfare. As they could have here, as well. And now they shall.
Again, not content with arguing tripe. The one thing Socialists lack is compromise. Sawant is a perfect example. Her way or the highway. Plays the rest of the council members like the puppets they are. Ignore this guy. He isn’t worth the debate.
Great comments. Tensor is typical of the mis-directing left. Lie with statistics that aren’t backed up. Hell, lie about everything. The best thing to do with an ass like this guy, is to ignore him. Don’t waste your valuable time arguing with him. Remember, Liberals are always right, no matter what the facts say. I am enjoying these counter comments immensely. Washington is already the highest taxed state in the country, and the left is ready to slap huge extra taxes on us, even though they have $3 Billion more dollars than current spending requires. Our liberal senators both voted recently to place our gun rights in the control of the UN, thereby trashing the constitution. Isn’t that treason?? Shouldn’t they be shot?? Inslee is trying to load a carbon tax on us, because the left thinks it has everyone scared over global warming that is not happening. We would all be better off if the left left.
He is just an ass that begs to be picked on. I own a restaurant, and was a former County Finance Director that actually know what I am talking about. Tensor is a liberal lemming that doesn’t know the directions to the Deception Pass Bridge. If I can help him out we will be that much better off!
And Btw, I am also a registered Democrat with a degree in business and economics that not only disagrees with the lemmings in my party, but also understands the basic tenants of economics that they don’t get. Perverse as it may sound, I look forward to poking Tensor until he responds sounding like he may be intelligent. Ironic that he can’t resist answering MY posts!
Doesn’t Jay Inslee look like Bill Murray in Caddyshack? When you listen to him speak, think Carl the Groundskeeper. Eases the pain!
Why the hell are you a Democrat? Although pilloried by fellow Dems, you’d be welcomed with open arms by sensible Republicans in the manner of our founder Abraham Lincoln…
I would be considered a moderate Democrat. For you younger viewers, that is what Republicans “used to be”. The heartburn I have with the GOP is that now they have to cowtow to the Tea Party and the Religious Right. Granted, the Democrats have to deal with the Socialists which they do with flourish here in Washington but they seem to be the lessor of two evils. In perspective I do vote for the person and not the party. Didn’t vote for Obama either election because he is a Chicago Democrat, which relish in corruption, and I did vote for McKenna because he was clearly a smarter person. What I find frustrating with they GOP is they always come across as unorganized and uncohesive as a party. From a financial perspective, I suppose I am a Republican because God knows, the Dems don’t have a grasp on global finance, but they also hold a lot of the social values that I have (not including feeding the entitlement generation). So there you have it.
I am also a registered Democrat with a degree in business and economics that not only disagrees with the lemmings in my party, but also understands the basic tenants of economics that they don’t get. Perverse as it may sound, I look forward to poking Tensor until he responds sounding like he may be intelligent.
Please use your great economikal-like knowledge to explain to folks like Washington Libertarian that a restaurant can’t easily pick up and move every time the landlord suggests a rental increase. Feel free to use the example of B&O Espresso here in Seattle, which went out of business after it was forced to move by redevelopment of the site they’d rented for decades. Yay free market!!!1!
Ironic that he can’t resist answering MY posts!
Because it’s fun to watch you flail helplessly, and yell school-boy names, when I ask you for evidence to support your claims. Your batting average remains an impressive 0.000.
Having a bad day buddy? I would too if I paid $200 for lunch at the Metropolitan Grill. You keep trying to draw my out with “prove this” or “justify that”. I have yet to see you do the same. Why is that? Content with just attacking the intelligent people here for your own entertainment? I think the readers here have your number, so whenever you are ready to prove yourself, you can mail that escrow payment for me restaurant. Looking forward to seeing you realize the reality.
I would too if I paid $200 for lunch at the Metropolitan Grill.
In my experience, any day which includes dining at the Metropolitan Grill is a very good day indeed! I’m truly sorry if you’ve had a bad time there.
You keep trying to draw my out with “prove this” or “justify that”.
And you keep failing miserably, which provides me with no small amount of amusement. That you keep expecting to be believed, even as you continually fail to support your own claims, just increases your amusement value.
I have yet to see you do the same.
You may indeed be that blind.
So, since you’re in the restaurant business, have you an estimate on how many new jobs will be created in the eateries of Seattle by Expedia’s move from Bellevue?
Lie with statistics that aren’t backed up.
It’s not my fault you can’t follow the hyperlinks I provide. Please learn to use a web browser sometime; I’m sure that will be a tough learning experience for you.
When the landlord or farmer attempts to raise his prices, Mr. Douglas can negotiate, get a new lease, stop serving that ingredient, raise his rates – he has many choices. Free negotiation between two parties. In the case of the minimum wage however, he can either pay it, or close his restaurants and give up his livelihood. This will be enforced by men with guns who can fine or imprison him, all under the threat of violence if he resists. Almost forgot – he can also eliminate workers.
Agree!
In the case of the
minimum wagecost of obeying health and sanitation regulations however, he can either pay it, or close his restaurants and give up his livelihood. This will be enforced by men with guns who can fine or imprison him, all under the threat of violence if he resists.There, fixed it for you. You’re welcome.
In the case of the wage, the two parties have freely reached an agreement the government decides is wrong. In the case of health and sanitation, the government regulations provide some value in that there is information a customer can’t know and benefits by receiving. Very few people would freely agree to eat bad food (although those who want to should be allowed to do so).
What I see is that you’re onboard with the government coming between me and my employer with the end result being elimination of my position. Where do you get the right to do that? You must be one of those heartless conservatives.
In the case of health and sanitation, the government regulations provide some value in that there is information a customer can’t know and benefits by receiving.
So, government regulations can add economic value? Good to know that.
However, the owner has no choice in the matter. When it comes to the cost health and safety regulations add to his business, “he can either pay it, or close his restaurants and give up his livelihood. This will be enforced by men with guns who can fine or imprison him, all under the threat of violence if he resists.”
What I see is that you’re onboard with the government coming between me and my employer with the end result being elimination of my position.
What’s the connection between a high minimum wage and the elimination of jobs?
Washington state, for example, has the nation’s highest rate, $9.32 an hour. Despite dire predictions that increases would cripple job growth and boost unemployment, this isn’t what happened.At 6.6 percent, the unemployment rate in December [2013] was a click below the U.S. average, 6.7 percent, and the state’s job creation is sturdy, 16th in the nation, according to a report by Stateline, the news service of the Pew Charitable Trusts.
Meanwhile, since Seattle’s City Council unanimously passed the higher minimum wage here, Best Buy is opening an engineering office in the city, and Expedia will move HQ from Bellevue to Seattle, bringing 3,000 jobs — and the intent to hire 1,500 more.
Government enforcement of health regulations, meanwhile, have shut down quite a few businesses.
Sure, there are a few areas where government adds value. Of course increasing the minimum wage leads to a reduction of employment. Your Seattle examples are irrelevant – do you think Best Buy engineers and Expedia employees are minimum wage workers?
We can kick studies back and forth on the topic (here is something based on much more sound analysis than the simple correlation in your example: http://reason.com/archives/2015/04/04/minimum-wage-magical-thinking). However, just as it’s beyond dispute that setting the minimum wage at $100 per hour would lead to reduction in jobs, setting the wage above the value that the worker a contribute will eventually lead to his or her elimination. Is there some wage where this won’t happen? Why? How do you know what it is?
If you set a minimum price on cars of $50,000, a lot of BMWs and Mercedes will continue to sell. A lot of Chevrolets and Hondas won’t. The minimum wage works the same way. People worth more will continue to work and those worth less will be discarded. You’ll eventually hurt the ones your ostensibly trying to help.
Your Seattle examples are irrelevant – do you think Best Buy engineers and Expedia employees are minimum wage workers?
Then why are restauranteurs in Bellevue concerned?
“It was definitely a gut punch for us,” said Marc Chatalas, who owns the Cactus restaurants with his brother Bret. “….But we came to terms that the building is not going to sit empty and hopefully it will be another large business.”
Of course increasing the minimum wage leads to a reduction of employment.
Of course you didn’t cite a single example of that happening in Seattle or Washington state.
We can kick studies back and forth on the topic (here is something based on much more sound analysis than the simple correlation in your example…
I didn’t quote from a study. I cited the last fifteen years of economic performance here in Washington state, and the last year of economic performance in Seatac. None of the negative predictions made in either case have any evidentiary support in reality.
…setting the minimum wage at $100 per hour…
Which no supporter of the minimum wage has suggested doing. (Here’s a hint: when your example is fictional, you’re probably losing the argument.)
Is there some wage where this won’t happen? Why? How do you know what it is?
By tracking productivity figures:
According to one study, if the federal minimum wage had kept pace with worker productivity over the last four decades, it would have hit $21.72 per hour by 2012.
Speaking of productivity, no matter how many predictions of economic doom fail, you guys just crank out more:
You’ll eventually hurt the ones your ostensibly trying to help.
Does “eventually” mean “fifteen years” or so? Because that’s how long Washington state has made annual increases to our minimum wage, and you haven’t shown any economic damage from it at all.
Here’s a statement with more evidentiary support: “Eventually, the sun will burn out, and all life on earth as we know it will end.” Yet, we don’t make public policy based upon that undeniable fact, now do we?
Are you implying that Expedia is moving because the minimum wage is being raised in Seattle? Can you explain how that works?
I don’t bring up any examples from Washington state, but this website has quite a few. The economic maxims I’m pointing out don’t vary from state to state. Do you believe that other scientific rules need to be validated on a state-by-state basis?
I realize you’re not advocating for a $100 minimum wage, buy why not? Why not the $21.72 number you mention? I suspect it’s because raising it too much would make the disruption too visible. There is some level of worker displacement with any increase in the wage. But if you keep it small enough, only a few will suffer. How does one go about coming up with the optimal minimum wage?
No economic damage? So you are saying that no one has lost a job due to our minimum wage? How do you know that? The fact that highly paid folks are doing well is not proof.
I’d say that when you’re bringing up the end of the world, you’re losing the argument.
Are you implying that Expedia is moving because the minimum wage is being raised in Seattle?
No, but Expedia’s move doesn’t seem to jibe with the claims of Seattle’s higher minimum wage driving jobs away, now does it?
Can you explain how that works?
I’ve never claimed there is any connection between raising the minimum wage and employment rates, for the simple reason I’ve never seen any evidence of such a connection. The people who do insist on such a connection are the ones who must explain why employment in Seattle, SeaTac, and all of Washington state continues to rise as the minimum wages in those places do. If they cannot so explain, then the rest of us are under no obligation to take their claims seriously.
I don’t bring up any examples from Washington state, but this website has quite a few.
Really? Where?
The economic maxims I’m pointing out don’t vary from state to state.
Then they are wrong everywhere.
Do you believe that other scientific rules need to be validated on a state-by-state basis?
First, an obviously-incorrect statement about economics is not any kind of a “scientific rule,” but second (and more importantly), we’re talking about policy in Seattle, not anywhere else.
I realize you’re not advocating for a $100 minimum wage, buy why not?
Because your made-up nonsense has absolutely nothing to do with reality, and my concern is with real policy in the real world.
Why not the $21.72 number you mention?
We may indeed get there. Meanwhile, $15 (or maybe $16) gives us some margin, in case the $21.72 estimate is too high.
(Also, citing a reality-based figure which was less than one-quarter of your fabrication was intended as a hint we had no need to take your suggestion seriously.)
I suspect it’s because raising it too much would make the disruption too visible.
You have evidence of disruption? Please show it.
There is some level of worker displacement with any increase in the wage.
Please show the “worker displacement” from the high minimum wages in Seattle, SeaTac, and Washington state.
How does one go about coming up with the optimal minimum wage?
I-688 has worked well for the last fifteen years, so we’re now trying increases in local minimum wages. If those work, we might raise the statewide minimum wage ahead of the schedule we created by enacting I-688.
So you are saying that no one has lost a job due to our minimum wage?
I’m saying claims of job loss due to raising the minimum wage have not been supported by evidence. I note further you’re doing a really good job of that here, repeatedly making claims you fail to support.
The fact that highly paid folks are doing well is not proof.
The fact that restauranteurs in Bellevue are worried about their firms after a raise in Seattle’s minimum wage should suggest your simplistic equation is not merely wrong, but backwards.
I’d say that when you’re bringing up the end of the world, you’re losing the argument.
I have evidence to support my claim. You?
What do you mean that the $21.72 wage is “too high”? What happens if the minimum wage is “too high”?
What do you mean that the $21.72 wage is “too high”? What happens if the minimum wage is “too high”?
If it had an unacceptably negative effect on our economy. For example, if we set our minimum wage to the point where job losses offset the benefits. Since there’s currently no evidence of any negative effect at all — as we’ve seen, businesses are investing in Seattle — we’re a long way from having to make that determination.
Well, it seems like you’re willing to agree that there is some level of wage that would be too high, so I can see a sliver of common ground.
Trying to determine if the minimum wage is having an impact by looking at macroeconomic numbers isn’t really enlightening as the results are swamped by larger economic trends. For example, had Seattle instituted a minimum wage in 2006 and I looked at unemployment in 2008, it would be ridiculous to imply the minimum wage drove the high unemployment numbers. (As much as I might like to try.) The Seattle economy is doing well right now, so problems with this experiment might not be discernible in the macroeconomic numbers. But also remember that this is being phased in, which means we haven’t seen the full effect yet, and in fact may not be able to see it in the macro numbers at all.
What is indisputable is that consumers are price sensitive and that will drive employers to be as well. Where wages are a significant part of their costs, businesses will try to reduce them. That’s why there is no longer a textile business in the south. If you force the employers to pay more, you’re betting that they won’t find a way to reduce expenses in such a manner that will end up in job losses. And you’re betting with their jobs.
Trying to determine if the minimum wage is having an impact by looking at macroeconomic numbers isn’t really enlightening as the results are swamped by larger economic trends.
Well, fifteen consecutive years of raising Washington state’s minimum wage, to the highest minimum wage of any state in our Union, has had *none* of the ill effects predicted by opponents of I-688 (e.g. prices rising out of control). For how many more years does this have to be the case before those opponents admit they were wrong?
Well, it seems like you’re willing to agree that there is some level of wage that would be too high, so I can see a sliver of common ground.
It would be interesting to see if opponents would concede that low wages can also cause economic problems, but apparently that line of inquiry is forbidden to them.
What is indisputable is that consumers are price sensitive and that will drive employers to be as well.
Not necessarily. The example in this post, dining out at restaurants, is a luxury good. No one who goes to a Tom Douglas restaurant expects an inexpensive meal — or will be greatly surprised when the check arrives!
Seriously, Mr. Douglas himself already admitted a mere two per cent increase would cover all of his costs caused by Seattle’s rising minimum wage. Do you really believe that patrons who now pay $50 – $100 per person per meal will stop going because their bills might rise by one or two dollars? Persons who want to economize their food bills by a dollar here or there have already decided to eat at home.
That’s why there is no longer a textile business in the south.
Come again?
Decades after many people thought the U.S. textile industry was dead, the industry generated $54 billion in shipments in 2012 and employed about 233,000 people.
I hope what has happened to textile employment isn’t what you’re planning for Washington! http://data.bls.gov/timeseries/CES3231300001?data_tool=XGtable
Regarding inflation, a lot of people seem to be pretty upset at housing and rent prices in Seattle recently.
I expect that small cost increases – a couple of bucks on a $100 meal – probably won’t make a difference. Of course, this is from a guy who thinks Ezell’s is a good night out, so I can’t say how it might impact someone who regularly eats in real restaurants. But I suspect labor costs are a bigger deal at a low end place. Only a small share of the market is made up of Veblen goods. And an even smaller share of minimum wage workers are employed there.
I hope what has happened to textile employment isn’t what you’re planning for Washington!
At least you’re admitting that a $54 billion/year industry actually exists.
Regarding inflation, a lot of people seem to be pretty upset at housing and rent prices in Seattle recently.
You keep taking evidence of a booming economy as evidence of government policies harming the economy. Is it any wonder nobody in Seattle wants to make policy based on your recommendations?
Of course, this is from a guy who thinks Ezell’s is a good night out, so I can’t say how it might impact someone who regularly eats in real restaurants.
If you’re reduced to making cheap personal attacks, do yourself the favor of making them accurate (and relevant). I can’t ever recall eating at Ezell’s, and the restaurants I’ve mentioned in this thread are Plum Bistro and the Metropolitan Grill, high opinions of which are not difficult to find. (Even if I did go to Ezell’s, it’s still a Seattle restaurant, and therefore relevant to this post.)
But I suspect labor costs are a bigger deal at a low end place. Only a small share of the market is made up of Veblen goods. And an even smaller share of minimum wage workers are employed there.
But the very point of this (and other) posts here is exactly how the workers who deliver a luxury good — dining out — tend to earn at (or near) the minimum wage. And let’s not forget that even dining at a “low end place” tends to be less expensive than eating at home. People who economize their food budgets to that extent have already decided that dining out is not an option.
Might want to reread my reply. That was in no way a personal attack. (But I’ll admit it as “cheap”, so to speak, if you’ve not patronized Ezell’s.) I’m referring to myself as the guy who eats at there. Take a deep breath and careful of that chip on your shoulder. We Libertarians are pretty agreeable folk.
Also, I don’t believe that the minimum wage will effect the growth of the economy in any measurable way. Not that many workers earn those low wages, and since they’re low, they don’t impact the overall economy much. I do believe that it will lead to some increase of unemployment, even if it’s not observable from a macro level. Frankly, we just disagree on the extent of the job loss.
Would you support below minimum wages for temporary apprenticeships? What about internships, some of which are unpaid? I suspect those are the kinds of folks who really get hurt by a minimum wage.
I just noticed your posts show up as EDT. What’s that all about?
Might want to reread my reply. That was in no way a personal attack.
I have; I apologize for my mistake.
Also, I don’t believe that the minimum wage will effect the growth of the economy in any measurable way. Not that many workers earn those low wages, and since they’re low, they don’t impact the overall economy much. I do believe that it will lead to some increase of unemployment, even if it’s not observable from a macro level. Frankly, we just disagree on the extent of the job loss.
I agree, for the reasons given. There’s simply no evidence of job loss, at least around here; businesses in SeaTac and Seattle are hiring — even the businesses whose managers had claimed a higher minimum wage would reduce employment! Furthermore, putting more money into the hands of the very workers most likely to spend it may have some stimulative effect on the economy, although for the reasons you gave, it may be immeasurably small.
Would you support below minimum wages for temporary apprenticeships?
No, for the simple reason there’s no evidence in favor of exemptions. Washington state’s high minimum wage does not have any exemption for training, or tip credit, yet Seattle ranks behind only two other American locales — San Francisco and the greater New York City area — for density of restaurants.
What about internships, some of which are unpaid?
That’s a whole other matter, and *any* unpaid employment should be illegal — period.
I suspect those are the kinds of folks who really get hurt by a minimum wage.
Image counts for something in politics, and when the only statements of concern for low-wage workers are a relentless focus on cutting their wages, the side making those statements will have difficulty getting other citizens to believe any good intent for those workers. I’m not accusing you personally of any malevolence against low-wage workers, but the constant search for exemptions to the minimum wage may give you an image problem. I merely make the observation; make of it what you will.
“Any unpaid unemployment should be illegal” – I hope you’re not advocating outlawing volunteering. So what happens when “internships” just become “volunteering”? Of course, then the pay will go from below minimum wage to zero. Another unintended consequence?
Entry level workers can benefit from apprenticeships. If you ban those, you’re going to reduce the chances for those workers to learn the skills they need to get ahead.
I hope you’re not advocating outlawing volunteering.
Of course not. I have spent many a fine Earth Day (and other days) as a volunteer landscaper in Seattle’s parks. Someone working all Summer as an unpaid intern is another matter entirely.
Entry level workers can benefit from apprenticeships.
I know. Twenty-five years ago, I began a Summer internship with a major mutli-national engineering and manufacturing company. I worked full-time as an engineering intern during the Summer, and half-time during school, until my graduation. I gained much valuable experience, which has enhanced my engineering career ever since.
I was paid an hourly rate, which was more than twice what the minimum wage was back then; during my full-time employment, I was eligible for time-and-a-half for any overtime worked, which I did frequently.
If you ban those, you’re going to reduce the chances for those workers to learn the skills they need to get ahead.
So, we have two students, each of whom would gain valuable experience from an unpaid internship. One has family support and so can work for free; the other must buy his own food and so must have a paying job. The system of unpaid internships, therefore, gives an unfair advantage to the student with wealthier parents.
If we eliminate unpaid internships, then businesses will have to pay for providing the very experience they want from full-time workers, and this will level the playing field for poorer applicants.
There are many ways to improve our economy for the benefit of all. Endlessly seeking to cut the wages of the very workers who are already lowest-paid is not a very effective way — and that’s assuming it has any benefit at all.
Again, Washington has the highest minimum wage of any state, with no exemptions for trainees, and we’ve been this way for years. If you can ever show any economic damage from our policy, then maybe we might credit your arguments. Until then, you’re just trying to cut other people’s wages for no discernible benefit to anyone.
A couple of interesting things I’ve come across recently to spur a little discussion.
First, the Seattle Times published a report yesterday and it appears that employment is growing only in the high end of the scale. At wages below $30 per hour, both the state and the region have lost jobs recently. (I will admit this was a surprise to me.) How does this impact your thought on increasing the minimum wage?
http://www.seattletimes.com/business/economy/the-recovery-gap-economic-expansion-is-favoring-the-wealthy/
Second, I have a colleague who runs a small business who brought on a friend’s son as an unpaid intern during his summer break form college. His business is small enough that it does not support the ability to pay the intern – but the youngster needs the experience in the industry and is happy to provide it gratis. Given that you are on record of wanting to make this sort of exchange illegal, which of the two (or both) would you lock up in a cage were they to continue with this relationship?
How does this impact your thought on increasing the minimum wage?
It certainly puts all of the criticism of raising it in perspective. Very low-income jobs have been slowly disappearing anyway, so raising our minimum wages merely reinforces a trend which was already underway in the job market. We’ve read many predictions here, claiming economic damage will result from raising our minimum wages; this article helps to explain why those predictions haven’t come true.
… business is small enough that it does not support the ability to pay the intern – but the youngster needs the experience in the industry…
Then I suggest he work at a business where even interns can create sufficient value to earn incomes. Experience in creating no (or little) value will probably not help him very much in his future endeavors.
… happy to provide it gratis.
Yes, one reason we have labor laws is to prevent young and inexperienced workers from getting cheated.
… which of the two (or both) would you lock up in a cage were they to continue with this relationship?
Businesses usually pay fines for breaking labor laws. If this business is so poor it can’t afford to pay a Summer intern (!), the resultant fine(s) should eliminate any recurrence of this exploitative “exchange”.
Very low-income jobs have been slowly disappearing anyway, so raising our minimum wages merely reinforces a trend which was already underway in the job market.
And a lot of mid and low wage jobs as well. I don’t think that makes the case for eliminating more jobs.
We’ve read many predictions here, claiming economic damage will result from raising our minimum wages; this article helps to explain why those predictions haven’t come true.
I agree it’s very hard to establish cause and effect here, but there seems to be more evidence than less that these predictions are coming true. Were I to be a holder of one of those jobs that were eliminated, I would certainly feel damaged, no matter how many Amazon web developers were raking in the dough.
Businesses usually pay fines for breaking labor laws
And if they don’t, then out come the people to put them in a cage. And if you resist them, then you end up beaten or worse. That’s why I would like to keep the role of government to where people are getting hurt. Not sure who is getting hurt here. But let’s restrict it to the fine – why should the employer pay it and not the worker? They’ve both broken the law in equal measure.
Yes, one reason we have labor laws is to prevent young and inexperienced workers from getting cheated.
Funny about that, but neither he, nor his parents, think he is being cheated, but that he is getting some useful experience in an industry that is tough to get into. If he was my kid, I would much prefer that he do something that prepares him for the career he really wants rather than flip burgers or pound nails even if he got $15 an hour for the summer. Why do you think you know better than all of us?
Do you consider yourself “pro-choice”? Because this is certainly not that.
And a lot of mid and low wage jobs as well. I don’t think that makes the case for eliminating more jobs.
I didn’t claim jobs were being eliminated; I wrote that low-income jobs were disappearing. This described the data in the article to which you linked. That data showed income levels rising as the unemployment rate falls. One easy way to accomplish this was the way Seatac did: make jobs which had paid $9.32/hour instead pay $15/hour. Since there’s never been any evidence presented to show anyone lost any such job when the wage rose, Seatac’s law effectively “replaced” jobs which paid less than $20K/year with an equal number of identical jobs paying at least $30K/year. Lower-income jobs disappeared, yes; but no one lost a job.
I agree it’s very hard to establish cause and effect here,
No, you’ve been claiming very clearly that a higher minimum wage will reduce employment. It’s showing that this actually happens which you’ve found hard — nay, impossible! — to establish. For example:
…but there seems to be more evidence than less that these predictions are coming true.
And yet again, you here provide neither more evidence nor less for any of it.
Were I to be a holder of one of those jobs that were eliminated,
The holders of those former $9.32/hour jobs who are now making $15/hour haven’t been heard to complain much, have they?
And if they don’t, then out come the people to put them in a cage. And if you resist them, then you end up beaten or worse.
Yes, repeated lawbreaking will tend to elicit an escalating response from the enforcement authority. (Do you have an issue with the rule of law generally, or just with laws you happen not to like?)
Not sure who is getting hurt here.
Um, the person who is not getting paid for his work?
Funny about that, but neither he, nor his parents, think he is being cheated, but that he is getting some useful experience in an industry that is tough to get into.
So, it’s not a swindle unless the victim understands he’s been taken? (Or, to put it another way, Isn’t the very best swindle the one where the victim never knows he’s been robbed?) Look, it’s great for the business to receive a subsidy from the student’s parents (or whomever is providing the student’s food and shelter for the Summer), but nowhere in modern capitalist theory does a for-profit business have any inherent right to obtain a competitive advantage from using unpaid labor.
Why do you think you know better than all of us?
If the author gives an incomplete description of the situation, it’s not the fault of the audience for not completely understanding that situation.
I need to figure out how you do that italics thing. Doesn’t seem to work right in Chrome.
Huh. this page claims it should.
That [sic] data showed income levels rising as the unemployment rate falls.
You’re inferring a causality that is not there. Or do you really believe that forcing companies to pay unskilled workers $40 an hour will generate lots more jobs for them?
One easy way to accomplish this was the way Seatac did: make jobs which had paid $9.32/hour instead pay $15/hour. Since there’s never been any evidence presented to show anyone lost any such job when the wage rose, Seatac’s law effectively “replaced” jobs which paid less than $20K/year with an equal number of identical jobs paying at least $30K/year. Lower-income jobs disappeared, yes; but no one lost a job.
Given labor force participation rates, it more likely that they are now unemployed. Nor do all those people work in SeaTac. And note that $15/hour employment is also down, as is $20, etc.
Do you have an issue with the rule of law generally, or just with laws you happen not to like?
I do have an issue with the rule of law when it relates to consenting adults agreeing on something and uninvolved busy bodies deciding they know better and thn force their beliefs on others using the power of the state, which when it comes down to it, is the threat of violence. Would you allow the parents to purchase “services” from the small business that would then use that money to pay the intern? How about if he just shows up at the company and just watches? What if – the horror – he empties a wastebasket? What if the parents start their own company and pay him and then he pays them back for room and board? Will you want to police all these cases lest someone offends your sensibilities? What sort of a Stasi will you need to set up to prevent people from doing what they want?
You’re inferring a causality that is not there.
I inferred nothing. I merely described what the data clearly shows: our state’s unemployment rate falling as the overall income of our state’s population rises. It’s you folks who claim those two trends should not have happened simultaneously who need to explain this. So far, all you’ve provided is words without evidentiary support:
Given labor force participation rates, it more likely that they are now unemployed.
Given that the unemployment rate in the Seattle-Bellevue-Tacoma region, at 4.4%, is even lower than our state’s unemployment rate, at 5.5%, I’d say it’s more likely you’re wrong.
And note that $15/hour employment is also down, as is $20, etc.
The data cover the period 2007-2013; Seatac’s $15/hour minimum wage went into effect in 2014; Seattle’s increases in the minimum wage began in 2015.
Would you allow the parents to purchase “services” from the small business that would then use that money to pay the intern?
Why not just have a for-profit business pay all of its employees? Why should competing businesses not get the same subsidy the parents are giving this business? Is that fair for the competition? (And, what’s with your endless fascination with having other people work for little or no money?)
What sort of a Stasi will you need to set up to prevent people from doing what they want?
Dude, stop hyperventilating; our current law-enforcement agencies are getting the job done. An American corporation has always needed a charter from the American state where it is incorporated, and American states have always had the power to regulate businesses. Move to Somalia if you want less regulation of private enterprise.
Your Seattle examples are irrelevant – do you think Best Buy engineers and Expedia employees are minimum wage workers?
OK, how about jobs in warehouses?
Prologis (NYSE: PLD) has applied for city permits to build two, two-story warehouses at 6050 East Marginal Way S., where northbound traffic on the First Avenue South Bridge spills out onto a busy crossroads. One building will have 331,200 square feet of space, and there will be 209,350 square feet in the other. The project also will have parking for 330 vehicles.
While the size of the project is impressive, the two-story configuration is more intriguing. Prologis’ involvement also is noteworthy because the company is upping its game in South Seattle, where it recently paid $63.25 million for two existing warehouses.
At this rate, there will be more minimum-wage workers in Seattle at $15/hour than there were at $9.32/hour.
Why do you think those jobs will be minimum wage?
Why do you think those jobs will be minimum wage?
Good point — the employer might choose to pay above our high and rising minimum wage. However, they are embarking on an extensive investment in Seattle’s economy, even knowing they’ll have to pay employees at least $15/hour when their warehouse is in operation. I was asking you if Seattle’s growth of jobs in warehouses was more relevant to this topic than is Seattle’s growth in high-income positions, such as Best Buy and Expedia.
More broadly, my question to you is, how much growth in what type(s) of jobs would Seattle have to experience, as our minimum wage rises, to invalidate your claim, “[o]f course, increasing the minimum wage leads to a reduction of employment”? Or would you just keep on making it, no matter what Seattle’s employment rate?
The unions pushed for the $15.00 minimum wage increase on restaurants, so they can demand a big wage increase for their union membes because food prices in restaurants is so high.
Just one of the vicious circles that unions create.
The best part of this utter non-story is how Mr. Douglas has now admitted a measly two per cent surcharge on his pricey menu items will avert that supposed economic catastrophe, a disaster of such magnitude that he stopped complaining about it the moment his customers told him to stop whining.
Anyone who can drop $50 (at least!) per person on lunch can easily hand over $51, and predictions to the contrary were just so much hot air, good for nothing more than fooling economic illiterates.
Start moving your business to another state. Close the doors of business in Washington. I did and I don’t miss the headaches of the simple minded non-producers.