It has been a couple years now sense some cities like Seattle have raised their minimum wage to $15 and hour. Many other places have set things in motion to raise their own minimum wages or are debating it often, including the federal government. Many oppose giving workers anything close to a living wage, including many business owners, and naturally many ultra rich businesses. Now, with a couple years of data of what happen in Seattle they are attempting to use that data to prove that the $15 an hour minimum wage is a bad idea. I've seen a couple of articles making wild claims, giving innacurate information, telling half truths or just outright ignoring things. So I decided to respond to them, and that is what follows.
Article 1, Quote 1-"Consider a business with seven minimum wage workers. Doubling those wages will cost the small-business owner an extra $122,000 per year. To cover those expenses, a business operating on the typical 10 percent profit margin would have to boost annual sales by $1.2 million — a near impossibility for most small businesses."
So note right off the bat the article is starting with the Small Small Business Fallacy, and that is that a small business is truly a small operation of less then ten employees and maybe a couple square feet. While a great many small business do fall into that size, many more fall into the size of 10 to 500 employees. This article is going for some obvious sympathy here as they want you to pitcure a small mom and pop business, and not a much larger several hundred employee business with multiple locations. Also, it's very dishonest to target just small business in this way, because a huge number of the effected workers are working for Big Business. The massive nationwide big box stores employ thousands of effected workers.
Article 1, Quote 2- "To pay higher hourly wages without running in the red, most businesses will have to raise prices (which can lower business volume) or cut costs. The latter is done through layoffs, reducing workers’ hours or benefits, raising prices, or forgoing investments in the business. None of those things is good for workers or the business’s long-term success."
Ok, you might note that the article says the small business must "raise prices'' twice. It's as if the writer really wants to highlight this as something a business must do as a big negative. And it's true that higher prices is a frowned upon by shoppers, it is a simple fact of life. Also note that the cost cutting methods mentioned miss quite a few things a business can do to cut costs. A big one that is missed is that the business can scale back a bit. Offer less goods and services over all, but concentrate on some core areas. Reducing the business operating costs is also a big one. While some business do aggressively watch their costs, just as many just let them ride as "part of doing business". The other big thing that is missed is the owners profit, and any business can save money by simply reducing this amount. The common myth is that a small business owner is quite poor having sunk life into the business: they live in a small shack and are lucky to make a couple dollars a mouth to buy some bread and water. And while this might be true from some very small business, most owners live quite comfortably with large incomes. Your typical business owner has a large home on a large plot of land, several new cars, an RV or boat, a vacation house and can afford to spend money on expensive interests and hobbies. And if the number mentioned in the article is accurate, I bet the cost of that RV could cover that extra needed $122,000.
Article 1, Quote 3- " Less experienced workers saw their hours cut. They had to go outside the city to find additional work, and their incomes didn’t rise. Meanwhile, the rate of new entrants into Seattle’s workforce declined."
Well, having worked in the trenches I can tell you that less experienced workers have always had few working hours, and would be lucky to have enough hours to "cut'. Nearly all business treat less experienced workers very poorly in nearly every way. And I'm sure the rate of new entrants into the Seattle workforce have declined for a simple and obvious reason: retention. Again, having worked in the trenches, I can tell you the turn over rate for employees making less then $15 an hour is huge. Some workers to find a nice comfortable spot for themselves and stay there, however most don't stay at a job too much more then a year. And the reason is very simple, as again: nearly all business treat less experienced workers very poorly in nearly every way. And this is on top of the working not making even close to enough money to make even a poor living. So when a manager or supervisor makes a job pure torture and you don't make enough to live off; why would a worker stay? The answer is they don't. With the $15 dollar an hour wage though, many more such workers will stay at their job. Thier job might be pure torture, but at least they will make a decent living doing it.
Article 1, quote 4- "A 2016 Heritage Foundation analysis found a national $15 minimum wage would cost 7 million jobs, with lower cost-of-living areas suffering the most."
So just pure scare tactics here. Seven million jobs sure sounds like a lot, and call into question this so called analysis. If the national minimum wage was raised to $15 dollars an hour, where does this analysis think the jobs will go? Nearly every business needs workers and they have to hire someone to do the jobs.
Article 1, Quote 5- "And Clinton administration economist Harry Holzer cautioned that a $15 minimum wage would be “extremely risky,” particularly for young and less-educated workers who need to gain work experience."
Risky how, one wonders? Again it's not like businesses can simply not hire people. And note the targeting here as this is only talking about the younger workers under the age of 25 or so. It does not address all the workers of age 25+ in the workforce.
Well that covers everything I saw in article one, but there are plenty more to come.
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