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Title: More Seattle restaurants close doors as $15 minimum wage approaches
Source:
Shift Washington
URL Source: http://shiftwa.org/more-seattle-res ... cebook.com&utm_campaign=buffer
Published: Mar 12, 2015
Author: Shift
Post Date: 2015-03-14 14:42:30 by X-15
Keywords: None
Views: 306
Comments: 27
Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.” Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36% of restaurant earnings go to paying labor costs.” Seattle Magazine, “Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.” “He estimates that a common budget breakdown among sustaining Seattle restaurants so far has been the following: 36 percent of funds are devoted to labor, 30 percent to food costs and 30 percent go to everything else (all other operational costs). The remaining 4 percent has been the profit margin, and as a result, in a $700,000 restaurant, he estimates that the average restauranteur in Seattle has been making $28,000 a year. “With the minimum wage spike, however, he says that if restaurant owners made no changes, the labor cost in quick service restaurants would rise to 42 percent and in full service restaurants to 47 percent.” Restaurant owners, expecting to operate on thinner margins, have tried to adapt in several ways including “higher menu prices, cheaper, lower-quality ingredients, reduced opening times, and cutting work hours and firing workers,” according to The Seattle Times and Seattle Eater magazine. As the Washington Policy Center points out, when these strategies are not enough, businesses close, “workers lose their jobs and the neighborhood loses a prized amenity.” A spokesman for the Washington Restaurant Association told the Washington Policy Center, “Every [restaurant] operator I’m talking to is in panic mode, trying to figure out what the new world will look like… Seattle is the first city in this thing and everyone’s watching, asking how is this going to change?” The Washington Policy Center, “Seattle is rightly famous for great neighborhood restaurants. That won’t change. What will change is that fewer people will be able to afford to dine out, and as a result there will be fewer great restaurants to enjoy. People probably won’t notice when some restaurant workers lose their jobs, but as prices rise and some neighborhood businesses close, the quality of life in urban Seattle will become a little bit poorer.” Poster Comment: Simple math: business has finite profit margin, when wages go up that eats into profit, employee's must be fired to keep the doors open. Or, the business owner says "screw it" and closes the doors.
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#1. To: X-15 (#0)
Wondering what percentage of the operators will move to a more sane locale? To have an over 700% increase in wage-costs is just insane. “The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
That is very true. There is an interesting question that goes with that. With unions outlawed and no minimum wage by law, would wages go up, go down or remain the same? Having worked as a child laborer with no rights, no protection of any kind, for twenty five cents a day, it is difficult for me to honestly believe that employers would be inclined to share any of the fruits of my labor. It seems to me that we should be beyond the 1930s thinking, when employers could shoot and kill employees with no penalty. Any business realizes that the same law taxes their business, profit or not and they pay it. The law or government says if you cannot pay your taxes, you go out of business. However if labor makes a demand, there is a financial crisis. Anyone that has been there, feel free to tell me how it really was.
Depends on what kind of help a business owner wants: he/she gets what he/she pays for. Crap wages = less desirable employee, IOW you won't hire somebody with an MBA and a proven performance record if you pay them peanuts. We're all mercenaries at the end of the day, we're just doing it for the money. Workers of the world learn Ebonics!
#2. To: X-15 (#0)
#3. To: X-15, All (#0)
Simple math: business has finite profit margin, when wages go up that eats into profit, employee's must be fired to keep the doors open. Or, the business owner says "screw it" and closes the doors.
#4. To: Cynicom (#3)
With unions outlawed and no minimum wage by law, would wages go up, go down or remain the same?
-Alex Kurtagic
#5. To: Cynicom (#3) (Edited)
Employers will pay what the free market commands; no more, no less. This is why many, especially high-tech employers, seek the Visas for "special" foreign workers to undercut typical American salaries. I see, everyday here, fast food joints with "Beginning Wage $10/Hour". These would not be the $2.13/hour for wait-staff at a decent restaurant, but just the hourly grunts there at FFJ.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
#6. To: Lod (#5)
The minimum wage folks are doing nothing to provide more value or increase their worth to the employer by improving their skill set or being more productive. Bottom line, it just drives up the cost of doing business with nothing in return in the way of more skilled workforce, or increased productivity. Not every business owner drives a Mercedes-Benz. A small mom-and-pop business who can barely afford a brick-and-mortar storefront and have a business model that pays minimum wage for a couple of part-timers (aimed at students/teenagers) will have to crunch numbers and see if it's all worth it. In 6 months this discussion will be about the greedy business owners denying jobs to the needy. It'll be the fault of the nameless rich, the nameless corporations and fat cats sucking the lifeblood of the poor. Its the same old liberal rant, but they can't see cause and effect. Its easier to blame nameless entities - the greedy moguls, the one percenters - rather than take responsibility for miscalculations by those that can't balance their own checkbooks.
-Alex Kurtagic
#7. To: X-15 (#6)
Lawmakers look down from their insanely overpaid positions and wonder why everyone shouldn't be overpaid. Memo to lawmakers: only you guys are on the public teat; everyone else has to earn their jack the old-fashioned way. Blood, Sweat, & Tears.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
#8. To: Lod (#7)
Gubbermint gets their cut and it's 100% profit: they don't have anything invested. Or do they? Vomit, vomit, vomit......
-Alex Kurtagic
#9. To: All (#8)
We Can Predict The Effects Of Seattle's $15 An Hour Minimum Wage It’s not difficult to outline some of the effect that this new $15 an hour minimum wage in Seattle is going to have. And I, for one, would rather hope that people are starting to study that labour market right now, so we can get a good idea of what it is like before that wage comes in. And then we can go back when it’s fully implemented and see what the effects have been. For my prediction is that the effects are not going to be good and it would be rather useful in future to have the evidence that large rises in the minimum wage really aren’t a good thing. You know, before someone suggests it should be applied to the whole country? As, in fact, people already are? The first and most obvious effect of a $15 an hour minimum is that there are going to be job losses. Don’t forget that the message from the academic literature is that “modest” increases in the minimum don’t seem to have “much” effect on employment levels. And we’d all agree that a $100 minimum would have rather large effects. So our puzzle here is to try to decide what is the definition of “modest”. Clearly $100 an hour isn’t. But also we can dismiss something like $1 an hour as being problematic. Since no one at all gets paid a sum that small making the minimum $1, or $1.50, has no effect on anything whatsoever. The best result we have from the academic literature is that a minimum wage in the 40-45% region of the median wage has little to no effect on unemployment. The reason being similar to that of a $1 one. So few people get paid so little that it just doesn’t affect the wages of anyone very much. The same research tells us that once we get to 45-50% of the median wage then we do start to see significant unemployment effects. This $15 an hour in Seattle will be around 60% of the local median wage. We would therefore expect to see reasonably large unemployment effects. We would also expect to see unemployment among high school graduates rise very much more than the rate in general. For this minimum applies only inside the City of Seattle: it doesn’t apply to the surrounding counties or suburbs that aren’t part of that political jurisdiction. Imagine that you were a college graduate having to do some basic work to make ends meet while you were waiting for that career opening. If you’re going to get $7.25 outside Seattle and $15 inside it you’d probably be willing to make the trip each day to earn that extra. Of course, as a high school graduate you would too. But now think of yourself as the employer. You’ve got the choice of a college graduate or a high school graduate, both willing to do the same job at the same price. Who are you going to hire? Logically, the higher grade worker, that college grad. So we would expect minimum wage jobs within Seattle to be colonised by those college grads at the expense of those high school ones. We would therefore expect to see a much larger rise in the unemployment rate of those high school grads as against the general unemployment rate. In fact, we’d expect to see this happening so strongly that we’d take the empirical evidence of that widening unemployment gap to be evidence that it was this minimum wage rise causing it. Finally, we’d also expect to see non-wage compensation decrease as a result of the rise. The wages you get paid are not the only things that make up the amount that your employer is paying out for your work. Sometimes they are trivial things, free parking at work perhaps (although in some cities that’s worth a great deal). Others are rather more important, like health care insurance. And we’ve already seen these things changing at SeaTac, where the minimum wage is already $15 an hour: “While attending an event at a SeaTac hotel last week, I met two women who receive the $15/hour minimum wage. SeaTac has implemented the new law on Jan. 1. I met the women while they were working. One was a waitress and the other was cleaning the hallway. “Are you happy with the $15 wage?” I asked the full-time cleaning lady. “It sounds good, but it’s not good,” the woman said. “Why?” I asked. “I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added. The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay. What else? I asked. “I have to pay for parking,” she said. I then asked the part-time waitress, who was part of the catering staff. “Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking. Employers look at the total cost of employing people. They’re indifferent (that is, they just don’t mind) whether that’s made up of wages only, or wages and benefits, or what the precise mix between the two is (a slight caveat here, it depends on the tax treatment of the various components of the total package). But if you mandate a change in one part of that mix they’ll struggle mightily to make sure that the cost to them of the total package is exactly the same. So that’s what we would expect from this rise in the Seattle minimum wage to $15 an hour. Some rise in unemployment. A much larger rise in high school graduate unemployment relative to the general unemployment rate. And a significant reduction in the job related benefits that workers receive. And as I say, I do hope that there are academics already recording the state of that labour market right now. So that in a few years’ time, when the new wage is fully implemented, we can turn around and say “I told you so”. http://www.forbes.com/sites/timworstall/2014/06/03/we-can-predict-the-effects- of-seattles-15-an-hour-minimum-wage/
-Alex Kurtagic
#10. To: X-15 (#4)
That sounds plausible but in the real world it does not work that way, never has, never will. We are all creatures of human nature. Bar a minimum wage law, would pay rise or fall? Depends on what kind of help a business owner wants: he/she gets what he/she pays for. Crap wages = less desirable employee, IOW you won't hire somebody with an MBA and a proven performance record if you pay them peanuts. We're all mercenaries at the end of the day, we're just doing it for the money.
#11. To: Lod (#5)
From experience, I would disagree with that. I NEVER had any employer offer MORE money, for instance no one would pay more taxes than required????? When taxes go up, do businesses close their doors? Of course not, pay or go out of business. Labor is no different, except they have no recourse by law to confiscate your business. Labor, like taxes is a cost of doing business. Perhaps you read where Walmart is going to ten dollars an hour for laborers???? Even they have become embarrassed. Employers will pay what the free market commands; no more, no less.
#12. To: X-15 (#9)
Not long ago, Newt Gingrich wanted to bring back child labor, The business world was too embarrassed to sign on to it. Newtie wanted children to work for less. Now, I need not ponder who the employers would have hired. They would have cut the price of their burgers or whatever? Really?
#13. To: X-15 (#9)
Thanks for that great information re: wages/costs/benefits. Private sector employers once more, immediately figger it out more quickly than do .gov jerk-offs. Low-wage earners gain zero. Great (non)thinking .gov.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
#14. To: X-15 (#0)
This is just pure baloney. No one would keep a business open making a mere $28,000 a year profit. he estimates that the average restauranteur in Seattle has been making $28,000 a year.
God is always good!
#15. To: RickyJ (#14) (Edited)
I mightily agree with that observation. I'd say that 280K would be a more realistic number for the 24/7/365 grind. No one would keep a business open making a mere $28,000 a year profit.
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
#16. To: Cynicom (#10)
For some it would fall, others would have no change, others would develop skills to be valuable beyond minimum wage.
-Alex Kurtagic
#17. To: Cynicom (#12)
If a kid wants to work after school and on weekends who am I to object? If the employer can't find workers for the offered wage then the employer either has to raise the offered wage to attract the workers or do without employee's. It's a two-way street.
-Alex Kurtagic
#18. To: X-15 (#17)
X... It has NEVER been a two way street. The highest court in this land had to try it three times to get it right, twice they ruled that slave labor was legal in this land. If you OWNED a person, what you did with him was your business. Beyond that, a free man had no rights, none. Child labor was the name of the game. There are hundreds of Lewis Hine photos of child labor on the internet. View as many as you have time, there is one thing missing in every photo. Reducing labor to peonage is what brought socialism and the rest of the ISMS to this country. This country was founded on a work ethic, built on a work ethic, including slave labor and child labor. Police are thugs now? In my time, police shot and killed ten demonstrators, wounded 30, beat dozens to a pulp. Several were shot in the back. There was no investigation, no one was ever punished. What was their crime? They were demonstrating for a union at a steel plant. They had no rights, employers owned the government. Difficult to tell a hungry man he has no rights. It's a two-way street.
#19. To: Cynicom (#18)
Nobody in Seattle city limits is being beat or abused on the job, and mandating $15/hr will harm businesses in that town. The only people who will benefit are the unions in Seattle whose wage scales are tied to the NEW local minimum wage.
-Alex Kurtagic
#20. To: X-15 (#19)
X... Again, no unions, no minimum wage, would wages rise, fall or remain the same?
#21. To: X-15 (#6)
By inherent rights, there are those that have the right of condescension, then, those at the bottom have the right of envy. Neither is an admiral trait. I would have to assume it is pleasurable being in the top strata of society, from experience it is NOT pleasurable being from the bottom rung of the social ladder. Any economist will tell you that wealth originates at the bottom and flows upward, we all know what flows downward. Years ago, I had a friendship with a billionaire, not on a social level for sure. We talked endless hours about many things, the attitude that pervades this thread never came from him. He had appreciation for his employees, from his top scientists to the janitor. I learned a great deal from him. When war came, he volunteered, went along with the dregs of society, took his chances. His name was Thomas Watson. In 6 months this discussion will be about the greedy business owners denying jobs to the needy. It'll be the fault of the nameless rich, the nameless corporations and fat cats sucking the lifeblood of the poor. Its the same old liberal rant, but they can't see cause and effect. Its easier to blame nameless entities - the greedy moguls, the one percenters - rather than take responsibility for miscalculations by those that can't balance their own checkbooks.
#22. To: Cynicom (#21)
I hope that you put all your spare change into his funny little three-letter company's stock. :-)
“The most dangerous man to any government is the man who is able to think things out... without regard to the prevailing superstitions and taboos. Almost inevitably he comes to the conclusion that the government he lives under is dishonest, insane, intolerable.” ~ H. L. Mencken
#23. To: Lod (#22)
His Father came from just across border here. One local had a concept or idea about future copiers. He was rewarded with either money or stock. He took the stock, thousands of shares.
#24. To: Cynicom (#20)
If you're hiring minimum wage workers, you're getting minimum wage quality work. Giving them more money isn't going to improve the quality of their work. Raising the amount of money required by law, is just giving the same minimum- skill workers more money. Minimum wage has nothing to do with those that make minimum wage and all to do with public sector union contracts.
-Alex Kurtagic
#25. To: X-15 (#24)
Good heavens... No such thing as a minimum wage worker. Minimum wage is the pay set by government, nowhere in the law is there any measurement of the amount of work to be done. That is impossible. Minimum wage is an arbitrary wage set by the government with no stipulation as to output. It is the employer that will ALWAYS try to extract maximum work for minimum pay. It is the intent of the employee to do as little work as possible for minimum pay. As a child, we worked for 25 cents a day, an adult could earn a dollar a day. In most cases the employer would opt for four children before hiring an adult. Why? Simple math, he could force more work out of four children for a dollar than he ever could get out of an adu7lt for a dollar. I have never paid minimum wage, would be ashamed to do so. The child coal miners were hired for one reason, more work, less pay, simple math. Judah Benjamin was a millionaire long ago, he OWNED 150 slaves, his work was done for little food and shelter. Better men finally did away with that. If you're hiring minimum wage workers, you're getting minimum wage quality work. Giving them more money isn't going to improve the quality of their work. Raising the amount of money required by law, is just giving the same minimum- skill workers more money. Minimum wage has nothing to do with those that make minimum wage and all to do with public sector union contracts.
#26. To: X-15 (#24)
Good heavens... No such thing as a minimum wage worker. Minimum wage is the pay set by government, nowhere in the law is there any measurement of the amount of work to be done. That is impossible. Minimum wage is an arbitrary wage set by the government with no stipulation as to output. It is the employer that will ALWAYS try to extract maximum work for minimum pay. It is the intent of the employee to do as little work as possible for minimum pay. As a child, we worked for 25 cents a day, an adult could earn a dollar a day. In most cases the employer would opt for four children before hiring an adult. Why? Simple math, he could force more work out of four children for a dollar than he ever could get out of an adult for a dollar. I have never paid minimum wage, would be ashamed to do so. The child coal miners were hired for one reason, more work, less pay, simple math. Judah Benjamin was a millionaire long ago, he OWNED 150 slaves, his work was done for little food and shelter. Better men finally did away with that. If you're hiring minimum wage workers, you're getting minimum wage quality work. Giving them more money isn't going to improve the quality of their work. Raising the amount of money required by law, is just giving the same minimum- skill workers more money. Minimum wage has nothing to do with those that make minimum wage and all to do with public sector union contracts.
#27. To: X-15 (#0)
More folks at work will do what I saw a transit bus driver do; buy a package of sliced meat and a drink at Safeways,eat at a tabled open court in shopping mall at his timing point stop. Not only cheaper but no waiting for meal preparation.
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