Minimum wage, maximum hassle. Uncompromising activists threaten to take $15 to November ballot.

By: Richard S. Davis
12:00 am
April 30, 2014

My column today’s looks at the ongoing wrangling in Seattle City Hall over how to get to a $15 minimum wage.

What Seattle does matters statewide. So far, no one has devised a containment strategy to prevent Seattle politics from spreading. It’s not Vegas. What happens in Seattle doesn’t stay in Seattle.

…Here’s what’s clear: The mayor and most members of his committee want to get to a $15 citywide minimum wage quickly, they want it to affect everyone and they will create a new enforcement system to assure compliance.

It remains complicated. Does $15 include tips and other benefits? How small is a small business? How long a phase-in? What’s enforcement entail?

It’s likely activists will push the measure to the ballot, regardless of the consequences for low-wage, inexperienced workers and the businesses that employ them.
For an excellent account of what the boost to $15 would mean, I recommend research done by Dr. Peter Nickerson, a Seattle economist. It’s the clearest, most accessible discussion of the minimum wage debate I’ve seen. (Summary, Full Report) The crux:

Our research, using actual 2013 wage and hour data from the Washington State Employment Security Department, shows that a $15.00 minimum wage would cause thousands of firms, most of them small, to see their labor costs increase, some dramatically. For many firms the increases will be in excess of 25 percent and for a small number over 50 percent. These sorts of labor cost increases are far larger than any ever seen in a minimum wage increase and will most certainly cause job loss, especially at marginal firms and for employees with very few skills. The increase to $15.00 would also cause loss of hours and numerous distortions in the labor market. Our estimates of job loss range from over 4,700 to almost 19,000 jobs.

In the most recent issue of AWB’s Washington Business, I have a column arguing that the $15 minimum wage is just the beginning.

The minimum wage campaigns represent labor’s attempt to penetrate union-resistant service, retail and restaurant businesses. It’s just an opening bid. Next, as we’ve seen here, they’ll agitate for paid sick leave, guaranteed vacation, and union-friendly organizing policies. Every business in the state will eventually be affected.

When the “defining challenge” is income inequality, the battles are endless. And so are the risks to free enterprise. It would be a mistake to think this is someone else’s fight.

We all have a stake in the Seattle campaign.

 Categories: Categories , Current Affairs , Economy , Employment Policy.
Tags: business costs , competitiveness , inequality , minimum wage