In the aftermath of the City Council’s vote to raise Seattle’s minimum wage by more than 60% – under threat of a union-sponsored initiative that would certainly be used against any city council member who dared vote against labor – it is worth again reviewing a letter published two months ago by Seattle celebrity chef Tom Douglas.
It should have been required reading by those who were stampeded into voting for this misguided measure, but clearly was not.
For those who didn’t follow his role in this debate, Douglas supports a minimum wage increase, and put his money where his mouth is last year by raising the wages of his kitchen (or back-of-the-house) employees. However, he had extreme concerns about the direction that Mayor Ed Murray and the city council were heading without much thought for the economic consequences of their clearly political vote. Douglas expressed his concerns in an open letter to the public.
Here are five quotes penned by Douglas worth remembering.
1. On an across-the-board $15 minimum wage increasing prices for consumers:
“That is a $5 million+ direct price hike annually on our menus and consequently to our customers. That is more than double our bottom line before taxes and reinvestment. In other words there is no way for us to absorb this expense in-house. This also does not reflect price increases we are likely to receive from our farmers, dry goods vendors and beverage distributors. This price increase is hugely inflationary to the restaurant business and is irresponsible when considering business people who have long-term leases and investments based on prior economic models.”
2. On the $15 minimum impacting all aspects of day-to-day life:
“This is going to touch everybody soon, so I suggest you do your own math and see where it might affect your life. Can or will your employer still afford health care? Staff meals? Everything you buy from local produce to rent to childcare to your own meals out on the town will be affected. We do know that the City Council and Mayor’s office will still make their wage and enjoy their health and retirement benefits without fail.
3. On the $15 minimum wage as a sign of Seattle elected officials’ lack of respect for taxpayers and businesses:
“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. Parking meter fees, B&O tax dollars, excise “sales” taxes and fees collected from tourist and business travelers and the rest of us are chess pieces to be moved on a board, but the cost of failure is ours, the tax payers. Raises and benefits given to city workers are from our tax pockets. 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.
4. On how the $15 minimum wage perpetuates an already harsh economic reality of the 21st century:
“When a local has to choose where to dine, they are now faced with a 520 bridge toll, increased parking rates and hours, future tunnel tolls, terrible traffic jams and now a possible 20%+ menu inflation. It’s not hard to imagine them choosing to stay at home. In fact, many already have because of another trend….on line shopping. We began to feel the effects of this trend in 2013 and don’t see it stopping anytime soon. When the modern American shopping center was born right here at Northgate Mall and proliferated to suburbs around the nation, many downtown cores were decimated. In a recent chat with a downtown department store owner, there is serious concern that in-store foot traffic will decrease by 50% between 2010 and 2020. That is what their models are showing with the extrapolation for us being if you’re not coming downtown to shop you’re probably not going downtown for dinner either.
5. On how the $15 minimum wage is an unbearable tax on businesses:
“It is clear to me that this is a direct tax on restaurants like we were some sort of vice like tobacco or marijuana. It is also a thinly veiled tax grab for the city. First the lusty new parking rates and now 20 to 25 percent more sales taxes on increased menu pricing. Shel Silverstein wrote an elegant morality tale called “The Giving Tree” and I’m afraid our leaders have not read it recently. Seattle’s City Council and Mayor attribute their election to the support of organized labor while we as a community are being eaten alive, limb by limb… This minimum wage issue could, depending on the outcome, be the most serious threat to our ability to compete so far.”
Now Seattle gets to watch this grand experiment unfold.