SeaTac’s Prop. 1 remains in limbo, but the minimum wage debate continues.
AWB president Don Brunell uses his column today to explain why the $15 minimum wage proposal is deeply flawed. I urge you to read the whole column. Here’s a sample.
Washington is already a high-cost state for employers, with the nation’s highest workers’ comp benefits and fifth-highest unemployment insurance benefits. When you add to those costs, something has to give. In this case, it’s jobs.
A study by the Washington Research Council estimates that increasing the minimum wage to $15 per hour will eliminate 5 to 10 percent of those jobs. In the end, you might have higher-paying jobs, but fewer of them. Is that what we want?
…So, if not Proposition 1, then what?
…The long-term solution is economic growth. As the economy expands, more jobs are created and employers compete for workers by offering higher salaries and better benefits. Trying to artificially impose higher wages will slow job creation — the opposite of what we need and want.
In raising her concerns about the $15 minimum wage, Seattle Times editorial writer Thanh Tan makes a a solid observation in her lead.
Thursday’s fast-food strike around Seattle didn’t exactly inspire the masses to stand up and demand an immediate increase in the minimum wage. (Read The Seattle Times’ news report on the day’s activities.) As of Friday, more than 700 people voted in an informal survey posted within a Seattle Times news story. The majority were against paying fast-food workers $15 an hour.
Despite what the cynics may think, most people get it. This is a bad idea. Tan’s short piece, too, is worth reading in its entirety.
Add The Daily News editorial board to the list of skeptics. They give three compelling arguments:
• Voters, who have no interest in the financial stability or the future of a private business, have no business setting wages. Singling out companies for punitive wage hikes mocks the entire collective bargaining process by basically handing the companies a contract drafted by a union that will be enforced by the city.
• Not all jobs are designed to be “family wage” or “living wage” jobs. Entry-level jobs at lower rates of pay are always needed for persons seeking to enter the labor force without experience or specialized training. These employees need time and training to build their value to their employers.
• Employers have shown in the past that they are totally willing to pass labor costs on to consumers if at all possible. Would doubling the wages of all employees of fast-food restaurants double the cost of a hamburger? Would the advent of $10 “Whoppers” result in cries for an even higher minimum wage?
I may my arguments in this short column in this quarter’s issue of AWB’s Washington Business. Enjoy, and enjoy the magazine.
Washington Research Council 