Seattle's $15 Minimum Wage is Hurting the Workers It's Intending to Help
reason.com/reasontv/2017/07/05/seattles-minim...Posted Jul 10, 2017, 3:08 AM UTC
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reason.com
http://fortune.com/2017/06/27/seattle-minimum-wage-study-results-impact-15-dollar-uw/
One of the major limitations of the study, the Economic Policy Institute (EPI) points out, is that the data it analyzed excluded business with multiple locations, such as chain restaurants and big box retailers. So the 40% of employees they left out work at places like McDonald's, Best Buy, and other stores that rely heavily on the low-wage workers who got the actual boost. That is a highly significant oversight.
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The minimum wage in 2014 when the $15/hour wage was passed was at $9.32. The 'study' said the hours were decreased by 9% when the wage went to $13.00 hour. Based on a 40 hour work week, the numbers in the article don't add up...
9.32 x 160 hours/month = 1,491.20
13.00 x 145.6 hours/month = 1,892.20
That is a gain of $401.00/month for less hours worked.
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Restaurant workers in Maine recently revolted against a measure to increase server wages from $3.75 to $12 in 2024 and got it overturned using the same reasoning. Here's a WaPo article about it. Interesting read.
However, despite what happened in Maine and despite what this article says the fact is that a restaurant's average hourly wage is going to increase. They are going to spend more on staffing and that will translate into more money going to employees.
You can only short staff a restaurant so much before you begin driving sales to competitors. There's a finite limit there. In reality it's not all, "when the cost of something goes up businesses tend to buy less." That's sounds great on paper but it's not true. Do you think pizza places buy less cheese? toppings? dough? Suddenly they're buying less natural gas or electricity or water? No of course not that's stupid. So is saying that they're going to buy less labor.
What they will do is look at their P&L and decide to lower their cost of labor as a percentage of their total expenses. This means that they could use less cheese and toppings per pizza. They could also increase their prices which is a far more likely scenario. They'd start with an increase in delivery fee because people mistakenly believe that goes to the driver instead of being treated as sales. Then the low cost deals start going away.
What I'm getting at is that if you need two servers for dinner or you need a manager and a cook for lunch then that's what you need. You could attempt to "buy less" but ultimately the business owner will make less money when sales decline due to shitty service and bad reputations are very difficult and costly to beat.
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Obviously biased sourced. I'm sure conservative redditors will recognize that and dismiss this article.
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reason.com = Charlie Koch
Seattle's $15 Minimum Wage is Hurting the Workers It's Intending to Help Profits
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These people are the MONEY behind the study, some how there was $118m left over, Imagine that.The greed never ends. : AIG AQR Bank for International Settlements Bracebridge Capital Brevan Howard Capital Group Companies Credit Suisse ExxonMobil Fuller & Thaler Asset Management General Electric General Motors Foundation Goldman Sachs Google Insurance Information Institute JP Morgan Chase Institute Pfizer, Inc. Vanguard Anonymous (2) Contributing $5,000 or Less: Board of Governors of Federal Reserve System Haver Analytics, Inc. Macroeconomic Advisers U. S. Regional Federal Reserve Banks (12)
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reason.com is the dumbest website.
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Never underestimate the awesome power of corporate greed and hatred for everyone who isn't at the top level. Also, and here is the thing: If you cut hours by 9% but increase pay by 100%, they're still making out with more money. Let's put it this way:
Sally makes $7.50 an hour and works 40 hours per week grossing a $300.00 wage per week.
Now Sally makes double that at $15.00 per hour but her hours are cut by 10% and she now gets 36 hours grossing $540 a week.
Sally still wins in this scenario as you can see.
Well, they're Libertarians, so what else can you expect?
It's not libertarians saying this, but scientists. The data doesn't lie. The 15 dollar minimum wage is hurting the poor in Seattle.
Just pay your workers a fucking living wage. We do it in Australia and the only thing hurting our economy is the fall of the mining boom and wage stagnation/low consumption growth.
The article doesn't explain that. The workers got a pay increase but work 9% less. By the example your replying to the worker gets paid more for working less. That's awesome, not bad.
Unless you consider how math works
Considering I have a degree in mathematics, I am pretty sure I know how it works. Here is the study. If you think their methodology is flawed, perhaps you should write a counter argument and rebuttal to the journal?
But it tells more than one story. One such story is that many of the businesses employing minimum wage workers were not operating under healthy business models, because their wages were structured to offer below-poverty wages to employees who also make up the communities they serve. If you can only turn a profit by paying poverty wages, there are issues in how you run your business that are not just related to personnel expenses. Livable wages need to be incorporated into any business plan, and these requirements are finally forcing a lot of these businesses to do just that. Reduced worker hours tells two stories - businesses unable to cope, and businesses unwilling to eat into profits. The burden has to be spread more equally between government (subsidies, etc.), consumers (higher prices) and business operators, and now business operators are finally having to assume some of the burden.
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https://www.thenation.com/article/no-seattles-15-minimum-wage-is-not-hurting-workers/
It's the same flawed study being repeated over and over in these conservative news articles.
Reason dot com is a libertarian news front. They wouldn't agree with you that reason represents scientists.
http://irle.berkeley.edu/files/2017/Seattles-Minimum-Wage-Experiences-2015-16.pdf
This Berkeley study pretty resoundingly contradicts your position. This is all early days but read through it, and you will find some contradicting conclusions.
As was stated before Seattle currently has record low unemployment. You should apply your mathematics degree to do the simple arithmetic, that $15 per hour for 30 hours, equals more money for the workers then $10 per hour for 40 hours. Thus even if they get less hours they are still better off financially.
If a worker has less hours but is making more money, what is the drawback exactly? They could use that time to spend with family, do their hobby, or pick up another part time time job in Seattle for more $15 hours, and actually afford a apartment, or a car.
All that being said this is way to early to tell, the $15 is not even implemented yet. To really have enough data to do a real analysis of this policy change you will need at least 5 years preferably 10.
It is inevitable that many businesses that were founded on the exploitation of workers time will certainly feel the pinch from this and many will go out of business. However if that leads to more people have making a living wage then that's the price that needs to be paid.
Thanks for the link and the thoughtful response.
Ah yes, money science says bad.
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Reportedly that is not the case, and they're making less money overall. (that said, how small were the wage increases if 9% less work dropped their money by $125?)
Numbers can be played with to meet a certain narrative.
http://fortune.com/2017/06/27/seattle-minimum-wage-study-results-impact-15-dollar-uw/
So, it's only small employers who are unable to afford the higher wages? McDonalds and Best Buy are doing better than ever?
Apparently, yes.
https://www.google.com/search?q=mcdonalds+stock&oq=mcdonalds+stock&aqs=chrome.0.0l6.2463j0j7&sourceid=chrome&ie=UTF-8
https://www.google.com/search?q=mcdonalds+stock&oq=mcdonalds+stock&aqs=chrome.0.0l6.2463j0j7&sourceid=chrome&ie=UTF-8#q=starbucks+stock