Buddy, Can You Spare $15 an Hour?

Two years ago, Thumbtack -- a startup that connects consumers with local contractors -- conducted a survey to see what they thought of proposals to raise the federal minimum wage from $7.25 to $10.10, as per President Obama's bid "to give America a raise." The survey found that that a plurality of the small businesses that used Thumbtack thought a wage hike would be good for the economy. Most thought that a minimum-wage increase would have no effect on their hiring or firing decisions. But what happens if Washington passes Democratic presidential hopeful Bernie Sanders' proposal to more than double the federal minimum wage to $15 per hour -- or Californians pass a ballot measure to raise the state minimum wage to $15 from $10?

One piece of news this past weekend suggests a big minimum-wage hike could cost low-skilled workers their jobs.

Wal-Mart closed its Oakland store amid speculation that the city's $12.25 minimum wage played a role. Oakland City Councilman Larry Reid told The Chronicle the city's wage law was a factor in the closure. It's hard to think otherwise when Oakland was one of 269 stores slated to be shuttered across the country, while in nearby San Leandro, where the $10 state wage floor prevails, two stores will remain open for business. The Washington Post reported last week that Wal-Mart was withdrawing plans to build two superstores in the nation's capital. A city councilman told the Post that behind closed doors Wal-Mart blamed D.C.'s minimum wage rules (currently $11.50 per hour, but the wage could rise to $15 if voters pass a ballot measure).

Thumbtack Chief Economist Jon Lieber finds it amazing how the $10.10 plan blossomed into a $15 floor, which may make sense in high-cost urban areas, but would put a hard squeeze on employers in places like Laramie, Wyoming. The vast majority of the small businesses surveyed by Thumbtack already pay well above the minimum wage, which is not surprising as many provide professional services. There is one group, however, that the survey found was most likely to be hardest hit -- employers who paid more than $7.25 but less than $10.10. Wal-Mart falls into that category.

In April, the retail giant raised its nationwide minimum wage to $9. In October, Wal-Mart announced that the increase in labor costs cut into its profit margin. This month came store closures. Lieber expects to see retailers install more automated checkout machines as the cost of labor rises.

Oakland Mayor Libby Schaaf endorsed Oakland's minimum wage, which 82 percent of voters supported. I got no comment from Schaaf, but her office noted that Oakland's unemployment fell from 6.1 percent in February 2015, before the wage hike went into effect in March, to 5.3 percent in September. The Wal-Mart closure, however, means 400 fewer jobs and the loss of revenue from one of the city's top 25 sales-tax producers.

In 2014, former GOP gubernatorial candidate and Silicon Valley entrepreneur Ron Unz worked the conservative case for a higher minimum wage. (Short version: Make work pay more than welfare.) When we talked Tuesday, I asked Unz about Oakland. He told me, "I could see Oakland having possibly made a mistake trying to match San Francisco." Note to Sanders and state unions: Beware what you promise; it could kill entry-level jobs.

"...The survey found that that a plurality of the small businesses that used Thumbtack thought a wage hike would be good for the economy. Most thought that a minimum-wage increase would have no effect on their hiring or firing decisions..."

What kind of "startup" is Thumbtack? Is it run by a bunch of hipsters? That might be the problem right there. This is a piece of their website:

Don't get me wrong-I think it is a great idea and am all for startups who provide services and make money for the people that own, run, and work for them, and as such, I want things like Thumbtack to be successful...very successful. But we also have to keep in mind the mindset of the people who run these types of surveys.

Getting back to their survey where A "plurality of the small businesses that used Thumbtack". Gee, what OTHER questions did they ask, I wonder that would cause a "plurality" versus a "majority". Heck, for all we know, that "plurality" might have been 10%.

For all we know, they might have asked fifteen other questions that said things like "I would like to see the minimum wage cut by 2/3 to increase my profits." or "I think slave labor is the best way to maximize my profits." More likely, these "small businesses" that responded so positively, and thought this would have no effect on their hiring practices have two employees.

I am 100% behind individual/small business, and think our country should do everything possible to encourage and promote them, but it is important to remember: (Small Business is defined as a company having less than 500 employees. About 80% of Small Businesses are non-employers, and the only person in the business is the person owning it, running it, and doing the work.)

Minimum-wage increase proposals are NOT about minimum wages.
It's about UNION wages (read government employees mostly) and UNION DUES.
Like "Artie" on another thread wrote.

"but my theory is that
this is one of the foundations of single payer.
Down the road, as single payer replaces ObamaCare,
all healthcare workers will become in essence government employees.
Think about how many thousands of new, dues paying union members will magically become part of the SEIU.

Barry had sealed this deal with Andy Stern years ago.
Barry promised Andy and the SEIU thousands of new members,
Andy says
great,
this is the wage structure we need
so we can pay the slush fund.
Gotta pay a living wage to all of the new union members
so dues can be extracted
and kickbacks to the dems can be made.

It’s convoluted
but what dem scheme isn’t,
especially when large sums of cash are involved?"

So read the following:

Union Support Of Minimum Wage Hike Is Self-Interested

Mary Kay Henry, president of the Service Employees International Union, ... was quick to emphasize that her organization's support of a more-than-twofold increase in the minimum wage was "not about growing unions." This may be true — but it's also undeniable that such a move would have a profound impact on growing union paychecks, even if those unions don't count a single minimum-wage employee in their ranks. The fine print can be found in union contracts. Each year, the Department of Labor's Office of Labor-Management Standards (OLMS) releases a number of union collective bargaining agreements (CBAs). Unsurprisingly, many CBAs available in the OLMS database LINK union salaries and wage rates to the federal minimum wage. There are a number of methods that unions use to accomplish this end. The two most popular appear to be setting baseline union wages as a percentage above the minimum wage, and mandating a flat wage at a set level above the minimum wage. One example is a series of CBAs signed with the Union of Needletrades, Industrial and Textile Employees (UNITE). Their contracts mandated that"(w)henever the federal legal minimum wage is increased, minimum wage (in the agreement) shall be increased so that each will be at least fifteen (15%) percent higher than such legal minimum wage." There's also an SEIU local's contract, which ordered that"(t)he minimum hourly wage rates shall exceed any statutory applicable minimum wage rate by 50 cents." Some unions have also arranged contracts where the employer MUST renegotiate their contracts in case of a minimum-wage hike, NO MATTER HOW LONG is left on the pact's life span. The possibility for abuse here is staggering:Unions with average wages WELL ABOVE the minimum wage CAN INSERT such clauses into their contracts, FORCING negotiations in industries not otherwise affected by a wage hike. Given the limited number of CBAs available in the OLMS database, it's impossible to determine just how widespread this practice is. But at least one union has trumpeted this arrangement as "one of the many advantages of being a union member." Earlier this year on its blog, the United Food and Commercial Workers International Union proudly boasted that "oftentimes, union contracts ARE TRIGGERED TO IMPLEMENT WAGE HIKES IN CASE OF MINIMUM WAGE INCREASES." This is a stunning admission of SELF-INTERESTt for an organization that's actively PUSHING minimum-wage hikes at both the state and federal levels of government. It also raises questions about unions' growing use of nonunion "worker centers" like the Restaurant Opportunities Center, OUR Walmart, Fast Food Forward and other organizations that have made headlines in recent months. These groups advocate many policies that would affect those businesses that pay a minimum wage — restaurants, retailers, etc. — and a minimum-wage hike is often the FIRST demand that these union front groups make. This only casts further suspicion on the motives of the labor unions funding these groups. No matter how you look at it, the benefits that these unions stand to reap from a minimum-wage hike should raise questions about their real motives — and whether they're only manipulating the debate over fast-food wages for their own benefit. Berman is the executive director at the Center for Union Facts.

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