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counting the consequence
I am not hopeful for the prospects of local unskilled labor as the Seattle city council prepares to vote on increasing the minimum wage in this city.
There were $15Now petitioners hawking the proposal down at Folk Life this weekend - I came upon one on Saturday as I waited in line for food at one of the vendors. "Why would I want to throw a bunch of people out of work?" "do you think these food vendors would sell as much food if their prices were mandated to be 50% higher?" "why do you think there won't be less labor employed when their prices are mandated higher?"
The story is told in the Seattle Times today. I follow with quotes from the story, interspersed with my commentary:
A special committee of the Seattle City Council on Thursday unanimously approved a $15 minimum wage ordinance, setting the stage for a historic vote Monday by the full council.
A unanimous vote could hardly be surprising news, given that the special committee was stacked with people who are willing to close their eyes to the prospect of putting their fellow citizens out of work.
Despite having several of her proposed amendments voted down, including a speeded-up timeline to reach $15, Councilmember Kshama Sawant declared victory on the steps of City Hall after the committee vote. “Today is a historic day for low-wage workers, for the labor movement, and for anyone who believes, as I do, that no one who works should have to live in poverty,” Sawant said.
I guess the strict parsing of Sawant's remark would be an honest appraisal of the outcome of her proposals. We just need to see who it is that ends up still in the ranks of the employed after these proposals are implemented.
Several members of the mayor’s Income Inequality Advisory Committee urged council members to not weaken their proposal. Pramila Jayapal, an immigrant-rights advocate and candidate for state Senate, called the mayor’s plan the result of “principled compromises and excruciating trade-offs.” David Freiboth, executive secretary of the King County Labor Council, was more blunt, saying the mayor’s committee would have adopted a training wage “over my dead body.”
Freiboth's remark is interesting, coming as it does from a representative of one of the sociological forces that first used minimum wage legislation to protect their own positions from competition. I don't imagine that very many of the people represented through the KCLC will be subject to losing their jobs at the $15 rate - their wages are already higher than that. Potential competitors, though, people who might be willing to provide a good service at wage rates less than $15/hour, will be forbidden from such competition. Even worse, people whose skills are inadequate to justify a wage as high as $15/hour will be forced into unemployment.
Several owners of Subway franchises complained to the council that they were being treated as large businesses under the ordinance even though they ran a single store and had fewer than 10 employees. “I’m not McDonald's. I’m not a wealthy franchiser. I’m not Subway. I pay them for the use of the name. That’s it,” said Matthew Hollek, who runs a Subway store in Ballard.
Yep. Expect more than a few of these businesses to go under in the next couple years.
Council members agreed to delay the start date for the phased-in wage increase from January 1 to April 1 to give businesses more time to plan for the change. They also voted to give the city discretion to set lower minimum wages for minors and for apprentice and training programs.. ... 15 Now is gathering signatures for a charter amendment that imposes a Jan. 1 date for businesses with more than 250 workers to start paying $15 an hour and a three-year phase-in for smaller businesses. Activists at Thursday’s hearing attempted to turn in to the City Council 10,000 signatures of the 30,000 they need to place the measure on the ballot. When Clark told them the petitions needed to go to the City Clerk, the crowd started chanting, “What do we want? 15! When do we want it? Now!”
It would almost be better to get the new wage floor imposed rapidly, since that would provide the most clear demonstration of the effects that it will have on employment. Perhaps some people would learn a lesson from the experience, but the practical effects will be faced by the thousands of people no longer working after these wage rates are implemented.
Sawant also objected to allowing the city to set a lower minimum wage for minors and for training and apprentice programs. She said young people, particularly immigrants, are increasingly asked to help support their families and shouldn’t be paid less. She said lower youth wages also encourages businesses to skirt the higher wage requirements for adults. But Harrell argued that teens would have a better chance to get a job if employers could offer them slightly lower wages. The training wage provision also passed 4-3, with Sawant, O’Brien and Bagshaw voting no.
I confess that it is difficult to fathom the logic of someone who allows for the chance that high minimum wages can effect youth employment prospects, but not have a similar effect on the prospects for adults.
The council also approved a resolution calling for an audit of the new minimum wage proposals after two and four years to determine the impacts on business, employment and compliance. The resolution also recommends the creation of a Minimum Wage Commission to oversee the implementation of the new law.
This was a question I started the evening asking myself - what might the city do to track the actual effects of this wage mandate. How might they seek to understand the wreckage imposed on people's lives, people who are first thrown out of work, and then forbidden from future employment within the city. The answer is an audit, details to be determined. Who knows, the localized nature of the measure may make a good case study to add to the broad existing understanding of the detrimental effects of minimum wage legislation.