Posted on 03/22/2015 10:01:57 AM PDT by Diana in Wisconsin
"Why Are So Many Seattle Restaurants Closing Lately?” asks a recent Seattle magazine headline. The Scrapbook is no restaurateur, let alone knowledgeable about the local economy, but we’ll guess it has something to do with the fact that Seattle’s new $15 minimum wage starts phasing in on April 1. However, the first rule of liberals confronting the laws of basic economics is deny, deny, deny.
A feature in the Seattle Times called the “Truth Needle” (we’re guessing the Times didn’t want to pony up to license PolitiFact’s logo) declares the claim that minimum wage has anything to do with the undeniably large number of restaurant closings is “false.”
Now, it’s certainly the case that restaurant operators in liberal Seattle are claiming a higher minimum wage has nothing to do with their business decisions. This is likely somewhere between a delusion and a lie, so let’s split the difference and call it public relations. Again, basic economics tells us that the typical restaurant operates on a slim profit margin, and wages typically run about 35 percent of operating costs.
Nonetheless, in very liberal and very wealthy Seattle, angering your customer base by proclaiming your opposition to redistributive social justice would be foolish. It would also be foolish to anger the local regulatory czars in a city that has proclaimed the new wage law a political triumph. “Restaurateurs are business people, not politicians, and angering the mayor over the law he signed is not a smart business move,” notes the Washington Policy Center.
However, there’s little doubt that the city’s heralded food scene is running scared. A spokesman for the Washington Restaurant Association told the Washington Policy Center, “Every [restaurant] operator I’m talking to is in panic mode, trying to figure out what the new world will look like.” We’re fairly certain it will be a Brave New Seattle, where there are fewer great restaurants, to say nothing of all the other labor-intensive businesses that will be shutting down.
Naturally, this means fewer jobs for the poor. Worse, the increased wages will also amount to a regressive tax. Economist Tyler Cowen flags a new study in the Journal of Political Economy by Stanford’s Thomas MaCurdy, concluding an increase in the “minimum wage produces a value-added tax effect on consumer prices that is more regressive than a typical state sales tax.”
The study also points to another reason why cash-strapped municipal governments like artificially raising wages. “Unlike most public income support programs, increased earnings from the minimum wage are taxable,” MaCurdy writes. “Over 25 percent of the increased earnings are collected back as income and payroll taxes. . . . Even after taxes, 27.6 percent of increased earnings go to families in the top 40 percent of the income distribution.”
So minimum wage increases grow government, make the rich richer, and still allow liberal politicians to demagogue the hell out of poor voters by falsely claiming they’re putting more money in their pockets. In the longer term, living wage laws and other en vogue liberal policies are likely to transform one of America’s best cities into Detroit on the Puget Sound. It would be nice if there were a stronger political counterweight in our overwhelmingly Democratic cities, but the best hope for conservatives regaining a foothold in urban America might be simply to stand back and let liberal economic policies work their magic.
Seattle could do an experiment.
In half the city they could return minimum wage to where it was - and in the other half make it 30 bucks an hour... Then they could wait and see what happens.
For liberals the results would be an eye-opener... for conservatives an affirmation of what they already know to be true...
We used to live aboard in the San Juans (early ‘80’s, 4 years)...later built a home outside of Arlington before returning to WI. Seattle has really descended into the socialist abyss since then, but the seeds were there then, too.
HAHAHAHA! Seattle’s mayor just proposed a $900,000,000 package for just those things.
They can deny it all they want, but mandating a sudden 30+% increase in salary in a business running on a 5% margin is a recipe for bankruptcy. You don’t need to be Andrew Carnegie to figure that one out.
That hilarious! I worked for MSFT for 12 years.
It would be interesting to catalog the business experience (or lack thereof) for the legislators who voted this in.
“That hilarious! I worked for MSFT for 12 years.’
I should have called you. :-)
.
Relocating is most likely WHAT most of them are in the process of doing. I sure would.
Last season I had this moron employee waltz in and TELL me that Minimum Wage was now $10.10 an hour - because President 0bama SAID so.
Good Lord, good help is hard to find in this liberal hell!
Seattle used to be this beacon of dynamic business, with Asian Americans, Boeing and Microsoft dominating... what happened? Seems like the California locust moved there.
One of my grandkids is a lifeguard at her college pool.
She earns $7.25 an hour and is glad to get it. It gives her spending money for the week and she is NOT planning on making it a career.
.
Get the Gov’t OUT of the equation.
Henry Ford did 2 major things in his life.
1) Mass produced a car, that everyone could afford.
2) Doubled the current $1/day wage pay, to $2/day so that HIS employees could afford to actually buy a car that they built.
Today, we have a minimum wage, with a welfare program that punishes people who dare attempt to better their lives. There is no gradual removal from the Gov’t dole from welfare to independence, instead there is a punishing drop in what these people receive. So, there is a work “dis-incentive” once they are on welfare.
The Government has done all that it can to screw the workforce up; and then sits back in amazed silence, wondering why they can’t fix what they have FUBAR’d. They have placed limits on how good a benefit program any company can offer - why would anyone do that? IF I wanna offer 100% coverage, with a zero deductible co-pay - as an employer - why can’t I offer that?
Lottery money for bike trails under debate in Colorado
A recreational bike trail from Wyoming to New Mexico is a goal set by Colorado Gov. John Hickenlooper.
A proposal before the Colorado Senate Thursday could play a part in that goal.
The Senate Finance Committee starts work on a bill to encourage both the Division of Parks and Wildlife and local governments to spend a portion of the net lottery proceeds they receive to construct and expand recreational bicycle trails.
Lottery tickets are probably the second most regressive tax skimming schemes for the poor, second only to cigarette taxes. How many poor people are going to ride their bicycles from Wyoming to New Mexico? Zero.
The same couldn’t be said in NYC; they have a state income tax AND a city income tax. These northeastern socialist havens are so dependent on the income tax revenue that when the banks were bailed out, both the governor of NY and the mayor of NYC begged the fed to allow them to pay bonuses to executives. They admitted they may not have earned them, but needed their respective income tax slices to fund their budgets.
The fed likes the idea of increased minimum wages because it drives up the contributions to Medicare and Social Security (and there ain’t no refunds on THOSE withholdings!)
Wouldn’t it, though? I’m wondering what a late summer trip to Seattle might look like.
A serious question: Does raising the minimum wage raise the cost of the menu items? Assuming yes, does that then result in a higher tip expected from the customers? Talk about a double whammy.
Maybe the restaurant patrons in Seattle should refuse to tip these overpaid workers.
It would seem to me that folks in Seattle will not be going ‘out to eat’ as often after April 1st. A further decline in the middle class living experience in Seattle.
The overall suckiness of the obamaconomy and the job market might also have something to do with it.
“It used to be that mayors did everything to please business or folkes around.”
Not Seattle’s Pock-faced Poofter. It’s everything to please the bicyclists and the queers. Look back at the mayors Seattle has elected over the last twenty years or so. It’s gotten progressively worse (no pun intended). And now they’ve elected a genuine communist to the city council. I got out of there thirty years ago. I could see what was coming.
“It used to be that mayors did everything to please business or folkes around.”
Not Seattle’s Pock-faced Poofter. It’s everything to please the bicyclists and the queers. Look back at the mayors Seattle has elected over the last twenty years or so. It’s gotten progressively worse (no pun intended). And now they’ve elected a genuine communist to the city council. I got out of there thirty years ago. I could see what was coming.
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