Seattle: $15 minimum wage already costing jobs

May 28, 2014
"But at least we won the election! Obama!!"

“But at least we raised the minimum wage!”

And it’s not even in effect, yet.

But, it’s not surprising. Business managers have to plan for the future, and a looming huge increase in their labor cost will force many to rethink how they do business in Seattle, if they continue to do business there at all. Writing for the free-market Washington Policy Center, Erin Shannon reports on how small businesses are planning to cut back on hiring, delaying expansion, or moving out of the city to deal with the new wage law. Most striking, though, is the account of one business owner who supported the law, but now thinks she may have made a mistake:

One of those business owners is a well-known and active supporter of “progressive” labor policies, including a higher minimum wage. Jody Hall, owner of Cupcake Royale, initially supported a $15 minimum wage. But now Hall admits the proposed policy is, “keeping me up at night like nothing ever has.”

While Hall has serious concerns with Mayor Ed Murray’s plan to phase in a $15 minimum wage over seven years with a temporary tip credit, her biggest fear is if voters approve the radical charter amendment sponsored by the group 15Now. The charter amendment would force all large employers to begin paying $15 in 2015, and would give small business owners just three years to acclimate to the high wage. And the 15Now proposal would not allow for any tip credit.

If the charter amendment passes, Hall says she would be forced to close half of her seven locations and lay off 50 of her 100 workers.

But beyond the differences between Mayor Murray’s proposal or the more aggressive 15Now proposal, Hall says she now has “serious second thoughts” about a $15 minimum wage in general, especially since Seattle would be “going it alone” with a wage that is significantly higher than any other minimum wage in the nation.

Hall’s second thoughts about a $15 minimum wage have led to second thoughts about expanding her business. She was set to open a new business in Seattle this year, but has tabled the plan until after voters have their say on the charter amendment in the November election. Hall says if she considers any new locations before then, they will be outside the city limits.

In other words, when progressivism meets economic reality, guess which wins? You would think a successful businesswoman like Hall would have seen this coming. Maybe she thought she’d get a waiver from Obama.

And pay special attention to her comment about “going it alone.” As minimum wage increases are applied and then have the same effect in various places, there will be more and more calls from the fairness crowd to apply these laws statewide and even nationwide, to make sure business owners can’t just move to a friendlier jurisdiction, which would be “unfair.” The minimum wage thus becomes a wedge issue in an attack on local control, federalism, and jurisdictional competition, things progressive just hate, because their favored policies usually fail.

Meanwhile, I want to thank Seattle for volunteering to be a case study on the foolishness of government control of wages.

via Adrian Moore

(Crossposted at Sister Toldjah)

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