Seattle Business offering $70K min wage is failing

[rob63]

I didn't see where he claimed that, but we've definitely talked about the lawsuit preceding the raises and the, perhaps cynical, connection.

I do like that the "it's going to fail, it's not sustainable" arguments are now "it's an anecdote and don't apply to the broader market" vs "Huh, I was wrong". I'm also enjoying this is somehow a bad thing because now the gov't will make everyone do it. Don't successfully grow your business while paying your employees more because the gov't might make everyone do it! Which ignores that the gov't is currently using your money to make up for the non-living wages that Wal-mart and others pay.

I now look forward to accusations of socialism and liberalism.

You're a socialist. Happy now?

Suppose Mayor Hogsett proposed that Mr. Price's idea be implemented at the city government level. The available payroll will be equally divided between all employees regardless of job title, qualifications, or experience. Do you think it could be passed?

 

[BehindBlueI's]

You're a socialist. Happy now?

Suppose Mayor Hogsett proposed that Mr. Price's idea be implemented at the city government level. The available payroll will be equally divided between all employees regardless of job title, qualifications, or experience. Do you think it could be passed?

I'm happy. .

Probably not, but of course nobody has advocated for such. Minimum wage =/= maximum wage.

 

[hoosierdoc]

You're a socialist. Happy now?

Suppose Mayor Hogsett proposed that Mr. Price's idea be implemented at the city government level. The available payroll will be equally divided between all employees regardless of job title, qualifications, or experience. Do you think it could be passed?

you'd see a lot fewer employees and a lot more contractors

 

[Twangbanger]

...Other studies that include the entire work force have shown a different picture: Study: Seattle minimum wage hasn?t cut jobs | The Spokesman-Review

...A study of the restaurant industry alone (so no retail, etc, but all workers in the segment):... Seattle?s higher minimum wage is working just fine | The Spokesman-Review...

Neither of the links you attached refutes the actual claim made by the U-Dub study, which is that low-wage workers in Seattle are experiencing negative impact to income since the law was passed.

The first one is obvious:

"Seattle’s $15-an-hour minimum wage law has boosted pay for restaurant workers without costing jobs, according to a study released Tuesday."

...referring to the Reich-Berkeley study. But the U-Dub study didn't claim the minimum wage law "cut jobs." It claimed, simply, that low-wage workers across all industries in Seattle are taking home less money after the law, on average, than before it. (In an economy that is booming).

If you dig deeper into the Reich-Berkeley study, all they are claiming is that "overall" restaurant workers got higher wages (an unremarkable finding, given that is what the law mandated), with statistically negligible employment effects. But the two "big issues" with that study, to use your term, are that 1) it makes no attempt to assess workers outside the restaurant industry, and 2) it makes no attempt to separate out the results for the vulnerable "low-wage" workers the law was designed to help, vs. those making higher pay. It is entirely likely that "low-wage" workers were still getting smoked within the context of that study, just as claimed by the U-Dub study...but the Berkeley study simply made no attempt to resolve that effect from the data.

(Your second link simply re-presents the same Reich-Berkeley study again).

So we have two studies, both excluding some significant portion of Seattle employees. But nobody (at least that I have seen) has refuted the U-Dub study, on the actual questions that study addressed: it found that low-wage workers in Seattle are worse off since the law's passage. (Its own authors are careful to point out that the situation on the ground continues to change as Seattle's economy evolves, and the study will [**of course**] continue).

 

[GodFearinGunTotin]

Interestingly enough, like many other social issues, if you support some law/government program, theres always studies to be found that will extoll its virtues and champion its continuance and/or expansion. If you dont, there's always counter studies refuting and equally rebuking the misguidance of the supporters.

 

[HoughMade]

Since the word "collusion" is all the rage in a Trump world:

http://www.dailywire.com/news/19231...ght-colluding-squash-james-barrett#exit-modal

http://www.foxnews.com/politics/201...ed-on-pro-15-minimum-wage-berkeley-study.html

https://ivn.us/2017/06/27/seattle-mayor-colluded-ca-university-undercut-damning-minimum-wage-study/

https://townhall.com/tipsheet/mattv...-berkeley-to-preempt-study-criticizi-n2348804

 

[BehindBlueI's]

So we have two studies, both excluding some significant portion of Seattle employees. But nobody (at least that I have seen) has refuted the U-Dub study, on the actual questions that study addressed: it found that low-wage workers in Seattle are worse off since the law's passage.

I find it tough to reconcile that with a lower unemployment rate, a growing economy, and at least 40% of the employer in the minimum wage market place getting a $1.50 dollar an hour raise. If 60% of the minimum wage jobs pay $11 and 40% of the jobs pay $13.50, and people move more to the employers paying the $1.50 more and leave the $11/hr jobs unfilled...that explains the difference. Total hours worked for $11 and hour will fall because those positions aren't filled. Low unemployment plus better paying jobs means the very lowest end of the pay scale stays vacant.

I also find it difficult to reconcile that the restaurant industry would be dramatically different than retail or any other low skill job that must be done in person and is not readily automated. Call centers or something that could easily be shipped to India or where ever, sure, but you've got to find people to stock shelves, pick orders, and run cash registers in the neighborhood. Again, given the fact the overall unemployment rate dropped and the overall economy continued to grow it doesn't make sense that the restaurant industry would not be representative.

 

[hoosierdoc]

I saw a sign that McD's was hiring $8/hr. That's like $9.25/hr after taxes!

 

[rhino]

I saw a sign that McD's was hiring $8/hr. That's like $9.25/hr after taxes!

I was almost to point of taking a job like that just a few years ago. Fortunately I found something else (on INGO) for $10 per hour. That's not much by some people's standards, but it's a lot of money to someone who doesn't have a job or a better prospect in the short term.

Still not sure how a paradigm developed that someone who takes a minimum wage, entry-level job is necessarily stuck with that job in perpetuity. It may be a reality for some for a variety of reasons, but it's not a concept that should be allowed to perpetuate as an expectation.

 

[Twangbanger]

I find it tough to reconcile that with a lower unemployment rate, a growing economy, and at least 40% of the employer in the minimum wage market place getting a $1.50 dollar an hour raise. If 60% of the minimum wage jobs pay $11 and 40% of the jobs pay $13.50, and people move more to the employers paying the $1.50 more and leave the $11/hr jobs unfilled...that explains the difference. Total hours worked for $11 and hour will fall because those positions aren't filled. Low unemployment plus better paying jobs means the very lowest end of the pay scale stays vacant.

I also find it difficult to reconcile that the restaurant industry would be dramatically different than retail or any other low skill job that must be done in person and is not readily automated. Call centers or something that could easily be shipped to India or where ever, sure, but you've got to find people to stock shelves, pick orders, and run cash registers in the neighborhood. Again, given the fact the overall unemployment rate dropped and the overall economy continued to grow it doesn't make sense that the restaurant industry would not be representative.

It's important to note that the U-W study didn't really find different results from those "other" min-wage studies; they simply looked at more-detailed data, and worked differently in a way that may turn out to be very significant in future MW studies. When they studied the initial, smaller increase, their results didn't look much different than other studies. The "break" seems to have occurred when the law moved up into dollar ranges that other localities haven't tried yet.

Here is the presentation of their study in their own words...it includes a link to a two-page .pdf summarizing the findings:

https://evans.uw.edu/policy-impact/minimum-wage-study

They found pretty much the same result for "restaurants-alone" that Reich-Berkeley found. Also, when treating the data the way other studies have operated, they also found similar results. Two things that are very different, however, is that they have hour-data granularity which allows them to narrow down the definition of "low-wage" to a dollar per hour level, instead of just classifying people as "restaurant workers" like other studies. And they're studying a much bigger magnitude of increase.

There seems to be an "orthodoxy" for how the minimum wage is studied, and this new work seems to be choking things up a bit.

 

[Twangbanger]

...If 60% of the minimum wage jobs pay $11 and 40% of the jobs pay $13.50, and people move more to the employers paying the $1.50 more and leave the $11/hr jobs unfilled...that explains the difference. Total hours worked for $11 and hour will fall because those positions aren't filled. Low unemployment plus better paying jobs means the very lowest end of the pay scale stays vacant....

I forgot to post this before, but if you read the study findings, that reasoning doesn't really hold up. Unlike most other studies, this one has a definition of "low wage worker." It's people making below $19 an hour. If people leave an $11 job, and take a $13.50 one...or a $15 one...or even a $17 one...they don't exit the boundaries of this study. Their improved wages are still reflected in it.

Yes, they can "un-cohort" the study by nutting-up and getting a $23 job; but if a person had the wherewithal to be ableto make that magnitude of change, they could probably have already done that before the $15 law was passed.

 

[BehindBlueI's]

If people leave an $11 job, and take a $13.50 one...or a $15 one...or even a $17 one...they don't exit the boundaries of this study.

(emphasis added)

They do if they go the 40% of employers who have a floor of $13.50.

1) Joe's Diner pays minimum wage. McD's pays minimum wage.
2) A stepped minimum wage is passed. Joe must now pay at least $11. McD's must pay $13.50.

Which is more likely:
1) Joe suddenly starts paying over minimum wage, jumping up to as much as $19
2) Both continue to pay minimum wage, and some of Joe's employees go work at McD's.

#2 means they *do* exit the boundaries of the study. It also explains the drop in hours worked for the jobs still within the boundaries, workers exited and the positions went unfilled. Which reconciles with a lower unemployment rate.

 

[brchixwing]

I moved to IN from San Francisco last year, the McDonald's I used to frequent had giant touchscreen TV's for self check in. High minimum wages & a tight job market, with the prospect of even higher socialist wage pressure is automating the cr@p out of quick service! It's still early in the US, so our automation is largely point of sale / checkout, but the long term trend in higher cost cities could be something like Japan, where you have a ton of vending machine" concepts. Basically providing a venue for eating & a point of distribution, but manufacturing / cooking off site. Even in Indy, concepts like Yats could be automated pretty heavily. I only think of Yats because ever time i eat that slop i picture it being mechanically crapped out of a tube.

I find it tough to reconcile that with a lower unemployment rate, a growing economy, and at least 40% of the employer in the minimum wage market place getting a $1.50 dollar an hour raise. If 60% of the minimum wage jobs pay $11 and 40% of the jobs pay $13.50, and people move more to the employers paying the $1.50 more and leave the $11/hr jobs unfilled...that explains the difference. Total hours worked for $11 and hour will fall because those positions aren't filled. Low unemployment plus better paying jobs means the very lowest end of the pay scale stays vacant.

I also find it difficult to reconcile that the restaurant industry would be dramatically different than retail or any other low skill job that must be done in person and is not readily automated. Call centers or something that could easily be shipped to India or where ever, sure, but you've got to find people to stock shelves, pick orders, and run cash registers in the neighborhood. Again, given the fact the overall unemployment rate dropped and the overall economy continued to grow it doesn't make sense that the restaurant industry would not be representative.

 

[Twangbanger]

(emphasis added)

They do if they go the 40% of employers who have a floor of $13.50.

1) Joe's Diner pays minimum wage. McD's pays minimum wage.
2) A stepped minimum wage is passed. Joe must now pay at least $11. McD's must pay $13.50.

Which is more likely:
1) Joe suddenly starts paying over minimum wage, jumping up to as much as $19
2) Both continue to pay minimum wage, and some of Joe's employees go work at McD's.

#2 means they *do* exit the boundaries of the study. It also explains the drop in hours worked for the jobs still within the boundaries, workers exited and the positions went unfilled. Which reconciles with a lower unemployment rate.

The size-tier point you're making is a good thing to remember when looking at these data. But if I accept your caveat that we're only going to talk about the "restaurant worker" data set, then by law, "Joe's Diner" is already mandated to pay $11. And, in every Joe's Diner I have ever seen, at least the "servers" make tips. No way do I think they would give up tip income for a $20 a day increase in regular wages.

So, we're left with only the Kitchen portion of Joe's Diner staff (who usually have higher hourly compensation than other employees to begin with), leaving Joe's Kitchen to go to McDonalds, as the subset of workers we choose for explaining the U-dub results?

 

[BehindBlueI's]

https://fox59.com/2019/09/26/this-c...-employees-to-70k-and-now-hes-doing-it-again/

Looks like the failing business has managed to survive another 4 years and is doing well enough to raise salaries again. Failed enough to add some 50 employees and have a significant reduction in turnover of both employees and clients. Failed into additional profits.

https://gravitypayments.com/thegravityof70k/#infographic-1

 

[HoughMade]

Good for them!

...and why 2024 in Boise?

 

[actaeon277]

 

[BehindBlueI's]

9 years later and still in business and still paying his employees the same? Must be a lot of head scratching going on among the repeated predictions of imminent failure in this thread. Almost like keeping expenses the same but changing the distribution of salary expenses didn't cause the company to implode for some nebulous reason of jealousy or whatever.

Dude's personal life may or may not be a circus act meets internet porn, not like we've never seen false accusations on the #metoo stuff, but the business plan has remained solid.