We really did try to warn them: Increasing the minimum wage beyond economically sustainable(1) levels will lead to bad, albeit predictable consequences, such as job losses:
Seattle, which recently passed a $15 minimum wage, has seen the loss of 700 restaurant jobs despite the rest of the state seeing huge increases, according to a Wednesday report.
In its report, the American Enterprise Institute looked at restaurant job growth in both Seattle and the rest of Washington. The state itself has gained 5,800 industry jobs since January. Seattle, however, lost 700 jobs in the same time. The state minimum wage is $9.47. Back in June Seattle passed its own minimum wage of $15 an hour. The city ordinance is designed to phase in over the course of several years. It will reach $15 an hour by 2017 for most employers.
“One likely cause of the stagnation and decline of Seattle area restaurant jobs this year is the increase in the city’s minimum wage,” the report speculated. “It looks like the Seattle minimum wage hike is getting off to a pretty bad start. Especially considering that restaurant employment in the rest of the state is booming, and nearly 6,000 more restaurant workers are employed today than in January.”
As I’ve said before:
Labor is a cost, because the business owner has to provide wages and, often, benefits that cost him more money. When a government mandate increases that cost, the business owner has three choices: pass the cost along to the customer, who may decide it’s too much and stop shopping there; cut employee hours and stop hiring to save on labor costs, thus costing potential jobs and putting a burden on workers still employed; and, finally, just decide it’s not worth it anymore and close up shop. In the low-margin bookseller business, Borderlands’ owner chose the last course as the only one viable.
That was in San Francisco. In Seattle, it looks like restaurant owners decided on some mixture of cutting labor hours, or perhaps moving out of Seattle altogether. In at least one case, workers asked to reduced their hours, so they wouldn’t lose their jobs… and their government subsidies.
Of course, this is to the benefit of areas with lower labor costs around Seattle; at least some of them absorbed those jobs and the tax revenue from people looking for better prices.
Meanwhile, assuming those restaurants didn’t close, let me introduce you to your new server:
The progressive elites running Seattle (and San Francisco and New York and Los Angeles and…) almost certainly feel good for fighting for “economic justice” and “fairness.
It’s a shame the average working stiff has to suffer for their egos.
PS: The ideal minimum wage is zero.
(1) One of the progressive left’s favorite environmental-justice words. Maybe we should use it so they can start to understand economics.