As the push continues in various locations around the country to raise the minimum wage to $15 per hour, the real world consequences of such a move have begun to surface.
Seattle became the first city in the nation to implement the $15 per hour minimum wage this past spring. Fox News reports that one unintended effect is that workers who are earning the higher wage are asking for fewer hours, so they can remain eligible for low income government benefits like childcare and tax credits.
Full Life Care, a home nursing nonprofit, told KIRO-TV in Seattle that several workers want to work less.
Local radio talk show host Jason Rantz on KIRO-FM noted the irony: “If [employees] cut down their hours to stay on those subsidies because the $15 per hour minimum wage didn’t actually help get them out of poverty, all you’ve done is put a burden on the business and given false hope to a lot of people.”
“Despite a booming economy throughout western Washington, the state’s welfare caseload has dropped very little since the higher wage phase began in Seattle in April. In March 130,851 people were enrolled in the Basic Food program. In April, the caseload dropped to 130,376,” according to Fox News.
As reported by Western Journalism, private businesses, unlike government entities (which, in theory, can always raise taxes or borrow), must make more than they spend in order to pay the rent, make payroll, keep the lights on, pay their business taxes, and, heaven forbid, have some left over for the owners and investors who are taking the risk and putting in the long hours.
“Some restaurants have tacked on a 15 percent surcharge to cover the higher wages. And some managers are no longer encouraging customers to tip, leading to a redistribution of income. Workers in the back of the kitchen, such as dishwashers and cooks, are getting paid more, but servers who rely on tips are seeing a pay cut,” Fox News reported.
Earlier this year, as the implementation of the minimum wage law loomed, Seattle Magazine noted that something appeared to be afoot affecting the restaurant industry in the city, asking: “Why Are So Many Seattle Restaurants Closing Lately? “Seattle foodies [are] downcast,” the magazine reported, “as the blows kept coming: Queen Anne’s Grub closed February 15. Pioneer Square’s Little Uncle shut down February 25. Shanik’s Meeru Dhalwala announced that it will close March 21. Renée Erickson’s Boat Street Café will shutter May 30 after 17 years with her at the helm… What the #*%&$* is going on? A variety of things, probably – and a good chance there is more change to come.”
The magazine went on to report that one “major factor affecting restaurant futures in our city is the impending minimum wage hike.” Anthony Anton, president and CEO of the Washington Restaurant Association, told the magazine: “It’s not a political problem; it’s a math problem.” He estimates that restaurants usually have a budget breakdown of about 36 percent for labor, 30 percent for food costs, and 30 percent to cover other operational costs. That leaves 4 percent for a profit margin. When labor costs shoot up to, say 42 percent, something has to give.
Shah Burnham is just one Seattle restaurant owner who believes that keeping her doors open is no longer worth it. She owns a popular Z Pizza restaurant location and says that even though her one store only has 12 employees, she’s considered part of the Z Pizza franchise – a large business. So she has to give raises within the next two years. “Small businesses in the city have up to six more years to phase in the new $15 an hour minimum wage,” according to Seattle’s Fox News 13.
“I know that I would have stayed here if I had 7 years, just like everyone else, if I had an even playing field,” she says. “The discrimination I’m feeling right now against my small business makes me not want to stay and do anything in Seattle.”
“It’s what happens when the government imposes a restriction on the labor market that normally wouldn’t be there” …usually the “small, neighborhood businesses” get hit the hardest, said Paul Guppy of the Washington Policy Center.
San Francisco and Los Angeles have already embraced the $15 per hour benchmark being pushed by some Democrat politicians and labor unions, while New York regulators announced their recommendation to the state’s governor this week to raise the rate for fast food workers to the same level.
The Heritage Foundation notes the minimum wage is usually for new workers, with a low percentage of Americans receiving it. The organization notes some other interesting statistics:
* Over half of minimum-wage earners are between the ages of 16 and 24.
* Two-thirds of minimum-wage workers earn raises within a year – without the government’s help.
* Only 2.9 percent of wage earners earn the federal minimum wage.
* Most minimum-wage earners are teenagers or young adults, not heads of families.
* Two-thirds work part time (defined as less than 35 hours a week).
* Two-thirds of minimum-wage workers live in families with incomes above 150 percent of the poverty line.
* Just 4 percent of minimum-wage workers are single parents working full time, compared to 5.6 percent of all U.S. workers.
* Studies find raising the minimum wage does not reduce poverty.
Heritage recommends that if government leaders want to reduce poverty, they should focus on growing the economy through better tax policies and restructuring the welfare state to remove the current disincentives to work more hours, or work at all.
Early indicators suggest that the $15 minimum wage is a lose, lose proposition for employers and employees.
Once again, Leftism’s results are opposite of their “intent”
(Shiftwa.org) Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”
Yet, the Left will never get that these results are CAUSED by their “good intentions”
The socialist party in Seattle that wants to raise the federal minimum wage to $20 per hour but advertised a job last week for an experienced web developer paying just $13 per hour is now defending itself.
The Huffington Post, which was sued by a bunch of unpaid bloggers after founder Arianna Huffington sold the website for $315 million, has the story.
The argument from the Freedom Socialist Party is that it cannot afford the minimum wage it seeks to impose on every commercial entity in America.
Doug Barnes, the Freedom Socialist Party’s national secretary, claimed that the collectivist political organization shouldn’t be subject to its own wage demands because it is a nonprofit that receives revenue from leftist contributors.
“We’re practicing what we’re preaching in terms of continuing to fight for the minimum wage,” Barnes told the HuffPo. “But we can’t pay a lot more than $13.”
Barnes also suggested that the Freedom Socialist Party would make more money off the backs of the low-wage workers he claims make many contributions if the federal government or state governments forced businesses to pay employees a minimum of $20 per hour.
“Our donor base would all be affected, and the low-wage workers who support us with $5 to $6 a month would be able to give more,” he told HuffPo. “That would affect our ability to pay higher wages as well.”
He noted that he personally supports a $22 per hour minimum wage.
According to his Facebook page, Barnes is a graduate of the Evergreen State College.
His Facebook “likes” include Occupy Seattle, Syrian Revolution Support Bases, El Centro de la Raza, Mumia Abu Jamal and Bay Area Radical Women.
Despite his spirited defense of the help wanted ad, Barnes added that the Freedom Socialist Party has since removed its ad from both Indeed.com and Craigslist.
“The right-wing attack is very hypocritical,” the socialist – who wants a $20 minimum wage but has sought a $13-per-hour web developer – lamented.
The Daily Caller predicted such an outcome, by the way, and saved a screenshot of the ad as it appeared at Indeed.com. You can see it below.
In 2012, the Freedom Socialist Party’s national platform championed “full employment” and an increase in the minimum wage “to $20 an hour” for all employees in all jobs.
The Freedom Socialist Party’s 2012 political platform also demanded a 70 percent tax rate for “the top 1 percent”; “free multi-lingual public education, including ethnic studies, through college and trade school”; free abortions; bank nationalization; and the cancellation of all free-trade treaties.
Despite last week’s offer of a part-time, 20-hour-per-week, $13-per-hour job, the party also called for a 30-hour work week for everyone “with no cut in pay” and “a guaranteed annual income.”
A part-time web developer making $13 per hour and working 20 hours per week would bring home about $13,600 annually, before taxes.
The Seattle headquarters of the Freedom Socialist Party appears to be located in an apartment building directly across the street from a Bank of America branch.
Some military veterans are being forced to leave their nursing home. It’s an unintended consequence of President Obama’s executive order in February to raise the minimum wage for new federal contract workers from $7.25 to $10.10 an hour.
Sandy Franks, public affairs officer at Shreveport’s Overton Brooks V. A. Medical Center, explains that nursing homes that have contracts for subsidized care from the Veterans Administration become federal contractors. If they refuse to raise their wages, their contracts will not be renewed.
Former Marine A.J. Crain just wheeled himself into his new room at Shreveport Manor on Mansfield Road when he got the news that the home’s contract will end this month.
“We fought all your wars, and now we’re broke. Where do we go from here?” Crain asks.
“We gotta go. Simple as that. We gotta go,” says Vietnam War Bronze Star and Purple Heart recipient John Washington.
“I think it’s very wrong. I think it’s very distasteful,” Washington goes on to say about Shreveport Manor’s decision. “I mean some of these people here work their backsides off to keep this place going,” he said, pointing to a woman changing his bed.
Shreveport Manor is owned by Gamble Guest Care. Their Chief Operating Officer says if they raise wages for workers there, they have to do that at all eight of their facilities.
In a statement, Gamble COO Matt Machen said, in part, “The additional labor expenses are simply unaffordable. As such, many long term care providers have indicated that they will no longer seek or renew V.A. contracts.”
Franks at the V.A. agrees that this has the potential to be a national problem as more V.A. contracts with nursing homes expire.
“We will deal with it on a case by case basis,” Franks says. “We will work the families and try to provide the most convenient, and the nursing homes that are up to our standards to take care of our veterans.”
“I’m not too happy over the situation,” grumbles former Navy sailor Charles Shufflin at Shreveport Manor.
Shufflin hasn’t even bothered unpacking his boxes of belongings since he has a place to go. His daughter Vickie Carrington is making room at her house.
“For my dad, I love him,” she says, kissing him on the forehead.
“I’m not so worried about myself,” Shufflin says, “but the veterans that have no place to live.”
“There’s a lot of people out there that have fought for our country,” Carrington adds, choking back tears. “And the ones that don’t have family members to take them in to take care of them, where are they going to go?”
The V.A. says they’ll look for space at other V. A. nursing homes, war veterans homes, or veteran community living centers.
Gamble’s Machen says the company will try to keep its veterans in place by looking for other forms of reimbursement, such as Medicare and Medicaid. He says only about one percent of their residents are affected.
Shufflin and Crain had just moved into Shreveport Manor from Rose View Nursing Center across the street, after the V.A. recently deemed Rose View had fallen below V. A. standards. So those vets would be moving for the second time in as many months.
More than 500 economists, including three Nobel laureates and several members of past administrations, have signed an open letter to the White House and Congress urging them to reject a federal minimum wage increase.
They warned that hiking the minimum wage would cause economic damage:
“One of the serious consequences of raising the minimum wage is that business owners saddled with a higher cost of labor will need to cut costs, or pass the increase to their consumers in order to make ends meet. Many of the businesses that pay their workers minimum wage operate on extremely tight profit margins, with any increase in the cost of labor threatening this delicate balance.”
For some reason, this has always been a hard concept for liberals to grasp. Whether it’s an increase in taxes, cost of materials or cost of labor, businesses will always – always — pass those increased costs along to the consumer; they always have, they always will. It’s called capitalism.
The economists cited the recent bipartisan Congressional Budget Office report which found that increasing the minimum wage would lead to job loss.
“The Congressional Budget Office’s (CBO) most recent report underscores the damage that a federal minimum wage increase would have. According to CBO, raising the federal minimum wage to $10.10 per hour would cost the economy 500,000 jobs by 2016.
Many of these jobs are held by entry-level workers with limited experience or vocational skills, the very employees meant to be helped.”
And therein lies the irony; while Obama trotting around the country espousing the virtue of raising the minimum wage may sound good to some, not only will many of those minimum wage employees be laid off; many more won’t be hired in the first place.
Obama and the Democrats fully understand this concept: it doesn’t really matter as long as they win the PR battle because Democrat voters have shown time and time again they don’t keep score; they never do. Liberalism has not proven to be about results. Emotion and intent are all that seem matter to the left.
How else can one explain the fact that 50 years and trillions of dollars after Lyndon Johnson launched the “War on Poverty,” urban Americans are no better off today, yet continue to overwhelmingly vote Democrat?