FRONT PAGE CONTRIBUTOR
Will the last person leaving Seattle please turn off the lights?
The $15 Minimum Wage and The Unintended Consequences of Feel-Good Economics
Seattle’s city council (led by socialist Alternative City Councilmember Kshama Sawant, union bosses and Democratic Mayor Ed Murray) just preliminarily voted to increase the minimum wage (in phases) to the highest minimum wage in the world.
Now, as the Emerald City embarks on its merry way into uncharted economic territory, it may be worthwhile to look at its little neighbor, the tiny town of SeaTac, for an example of what may befall the much-larger metropolis.
Last year, unions outspent businesses in SeaTac, Washington 2 to 1 and won a ballot initiative to raise SeaTac’s minimum wage to $15 per hour.
Although SeaTac is really nothing more that a baby burb that houses an airport, workers have flocked there to apply for jobs and, in some cases, after only a few short months, the experiment raising of the minimum wage appears to beginning to take its toll on jobs and the workers who work them.
Some businesses have shut down, others have laid off workers, and some have tried to counteract the increase by charging a minimum wage surcharge, reports the Seattle Times.
To make matters worse, while one might think workers would be happy with the increase in their wages, it turns out that some are not happy with being the guinea pigs in a lesson in labor economics.
Asian Weekly, a Seattle-area weekly, spoke with several workers who had recently had their hourly wage raised to $15 and experienced the negative consequences of the mandate.
“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. [Emphasis added.]
Asian Weekly also spoke with a part-time waitress who said her tips were much less than she used to get.
While the results of minimum wage hike at the SeaTac has been mixed (at best), Seattle’s minimum wage increase is a socio-economic experiment that has much larger ramifications. In fact, it may ultimately cost more to the workers that the hike is intended to help (as well as to the city at-large) than its backers realize.
Even prior to last week’s vote, according to KomoNews.com, “some merchants are bailing the city over a business climate they say is all wrong.”
The debate over the miniumum wage hike has already had a chilling effect on small businesses, reports KUOW.org.
“People are just scared and they don’t know what’s going to happen,” said Angela Stowell, who co-owns 10 restaurants in the city. “They’re paralyzed by the uncertainty.”
Indeed, even the left-leaning Slate is dubious about whether Seattle can absorb such a hike stating, “Any plan that makes hiring a worker more expensive than in France should be cause for concern.”
Now, time will be the ultimate arbiter as to whether Seattle’s experiment in hiking the minimum wage will cost workers more than it gets them.
However, if it proves to be an economic disaster, with unions, liberals and socialists controlling the city, it will be extremely difficult reverse the minimum wage hike…ever.
As a result, as more employers flee—taking their jobs with them—Seattle may end up becoming the Detroit of the Pacific Northwest.
“Truth isn’t mean. It’s truth.”
Andrew Breitbart (1969-2012)
Cross-posted on LaborUnionReport.com
Image Credit: Chris Tarnawski