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Seattle Restaurants Struggle With New Minimum Wage

Seattle Restaurants Struggle With New Minimum Wage

Some by closing…

A higher minimum wage means more money for low level workers… in theory. The trouble is that raising the minimum wage directly affects the ability of job creators to offer more workers more money. It looks great on paper but doesn’t work well in reality.

For example, we recently reported on a San Francisco book store that’s shutting its doors over a higher minimum wage.

Now, some are citing restaurant closings in Seattle as collateral damage resulting from the city’s new minimum wage hike going into effect next month.

Shift WA reported, hat tip to the great Jazz Shaw of Hot Air:

More Seattle restaurants close doors as $15 minimum wage approaches

Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”

Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36% of restaurant earnings go to paying labor costs.” Seattle Magazine,

“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”

Here are some Twitter reactions to the story via Twitchy:

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Pikers. You need a $38 an hour “minimum wage” to live better than if you have 2 kids and are on welfare. And you make it $50 an hour and EVERYBODY would be in the “1%”. Don’t you know maths?

Filthy, insubordinate capitalists! How dare you retaliate against our infantile, incoherent social-justice diktats by closing shop! Our best commissars are working as we speak to find ways to compel you to stay in business and lose money. You will soon have no choice!

Yeah, it’s awfully hard to feel sorry for these utopian fools. Just remember, Seattle, you were warned that this would happen.

    MrE in reply to jim_m. | March 15, 2015 at 12:21 am

    It’s all good, brah … from what I seen, the 12’s could stand to lose a few pounds and fewer restaurants near the Clink is good t’ing.

Not A Member of Any Organized Political | March 14, 2015 at 8:22 pm

Meanwhile President Tweety-Pants makes up online games about the GOP.

“President mocky-pants gets personal; makes fun of GOP with online game”

That’s what some people are wondering about President Obama after his Twitter account posted a “fantasy tournament” resembling a line-up of Obama’s favorite sporting event, March Madness.

Only the post wasn’t about basketball….an apparent attempt to humiliate those who dare to go against him, Obama’s game is lined with brackets identifying the names of Republicans who he calls “climate deniers.” Participants are to vote for their favorite “denier” who be will crowned “champion” – or something.

http://www.bizpacreview.com/2015/03/13/president-mocky-pants-gets-personal-makes-fun-of-gop-with-online-game-186621

If only we had had some sort of warning that this might happen by having a minimum wage as a threshold given, and if that wage is capriciously increased.

If only someone had told us.

Why didn’t someone, anyone, speak up?

Learn economic reality or die.

Simple as that.

Well, for most of us. Rich Collectivists just just drag down working people as they’re going under.

Then they pop back up to the surface and move on to the next cycle of screwing up lives. Rinse, lather, repeat.

Democrats demand mass immigration, obama flies around the world signing free trade agreements, jobs get outsourced. he unilaterally legalizes 12 million illegal aliens. They want MORE h1B visas.

All this is while the greatest worker cohort in history is retiring. 3 million workers a year are retiring. Their goal is to LOWER WAGES.
They want more insourcing, More outsourcing. They want the american dream dead, then they want to say republicans are the guys killing the program that the democrats are have in place to keep the working man on life support.

THIS IS M.O. The goal is to the Working Man. More Workers, less jobs. only one third of the ones here can possibly be employed. a completely dysfunctional society. 2/3 of it perpetually beholden to the democratic party for handouts, the other third terrified of the democratic party.

The Democratic Party goal is to create a new Venezuela – A Chavista Majority of a permanent underclass of pissed of perpetually low skilled undereducated folks in the american southwest that are beholden to the democratic party for handouts. every 20 year or so, just let in another 30 million or so unilaterally until you get there. At that point, you have productive 1/3 so terrified you rule with impunity. This is the plan. Destroy the american dream. Pure and and simple.

DDsModernLife | March 14, 2015 at 10:26 pm

I’m thankful to have received an early education in basic economics and I’ll share it for the benefit of my liberal friends:

In my early teens, my friends and I worked for less than the Federal minimum wage in the cotton fields of Southeast Missouri. We were dropped off in the corner of a field, each with a hoe and a jug of water to chop the cockle burrs, tea weed, lamb’s quarter, bull nettles, and other hostile weeds – “choppin’ cotton,” it was called. The fields were 1/4 mile square, and we earned $2.00/hr, 10hrs/day, yielding $100/week (if it didn’t rain)…enough money to buy a pair of Converse tennis shoes and some Levi’s for the coming school year. (Subsequently the phrase, “He has a tough row to hoe,” or “Sh-ttin’ in tall cotton,” has real meaning for me, and it disgusts me to hear people claim that there are “jobs that Americans won’t do”.)

Even then we all knew: we were in direct competition – dollar-for-dollar – with a few gallons of post-emergence herbicide, some diesel fuel for the tractor (with spray rig) to apply it, and our employer’s “opportunity cost” to treat that particular field. As soon as our labor cost exceeded the cost of these elements, we were done: out of work, unemployed.

Here’s the thing: the next summer we could apply for a job and say, “Yes, I’ve worked. I ‘chopped cotton’ for so-and-so…” and it meant something.

For us, it was never a political problem and we could do the math ourselves.

Um, the agitators earn more than $15 an hour! And, the unemployed they give the signs to are as unemployed today as they were yesterday.

Besides, in the ghetto(s) the real money is earned pushing drugs. And, the “wealth” is flaunted. Not only in all the heavy gold chains, but in the gold teeth as well. (Healthy teeth are removed to put this in.)

If it wasn’t for Monica Lewinsky, Bill Clinton would be remembered for “Midnight Basketball.”

In *theory* communism works. Much like the $15/hr minimum wage.

In practice, not so much.

    Ragspierre in reply to Paul. | March 15, 2015 at 5:53 pm

    I disagree. Even in theory…if the theory is stated correctly…ANY form of Collectivism DOES NOT WORK.

    Certainly, in application, the only models we have…and they are numerous…shows that all forms of Collectivism fail on a number of levels, not least of which is purely economic.

    The one most significant to me is one touching liberty. All of them are corrosive of individual choice, development, and improved standards of living for all.

Nothing happens in isolation including ‘stupid stuff”.

And then there’s this…
NYT’s Paul Krugman flip-flops on France’s minimum wage but sticks w/Dem’s talking points:
http://cafehayek.com/2014/12/the-gaul.html

Mister Natural | March 15, 2015 at 8:12 am

Who is John Galt?

At $15.00 an hour, I withhold my tips. They no longer need tips to get by.

Borderland Books is not closing, at least until under March 2016, and possibly not for a good long time. They are sufficiently loved in the science fiction community in San Francisco (and apparently elsewhere) that they’ve attracted sufficient donations to stay open, and the donations are structured on a yearly basis.

It’s actually a fascinating story that brick-and-mortar specialty stores should study in the internet age. A sizeable cadre of customers adores the place and begged for a chance to save it. The owner invited the customers to come to a brainstorming meeting, not expecting anything to come of it but wanting to end on a classy note.

At the meeting, the owners were struck by the number of people saying “If the problem is money, we’ll give you money to stay in business.” They apparently had some qualms about accepting charity to stay in business, but wanted to stay in business, so they structured a sponsorship program, where for $100/year you get preferential seating at some events, special access to events-yet-to-be-created, and the ability to rent the store and attached cafe after hours at cost. If 300 people bought sponsorships by March 31, the store would stay open till the next year; if 300 people bought sponsorships for the next year, it would stay open a year after that, etc. Sponsorship is, of course, basically a way of giving the store money in order to save it as an institution, but the owners sensibly want to attach some value to it to keep people interested in handing them that money year after year, even when the current noise about the minimum wage dies down.

Borderlands had the 300 sponsorships in well under a week. Last I heard they were over 500. It should be interesting seeing what they do with the excess capital; the 300 number already included a small sum to buy some additional inventory.

It’s a fascinating story, and worth pondering. Brick-and-mortar stores are places to *be* (among many other things, naturally), and that’s not something we have a system to pay them to do.

    sequester in reply to ecreegan. | March 15, 2015 at 10:06 am

    Sorry, there really is nothing to ponder here. Sounds like they want to become the NPR of bookstores. Perhaps the City should take them over and they could become a public library.

      ebartley in reply to sequester. | March 15, 2015 at 11:43 am

      Public libraries have deteriorated horribly thanks to political correctness and court decisions which forbid them from excluding the odiforous, unsanitary, and simply frightening. A private library with a quiet zone, a conversation zone, a cafe, and a place to special order books is an interesting possibility but I don’t see it surviving the first three years, though I think if it did survive long enough to have a customer base it might be self-sustaining.

      Before I had kids, I used to browse bookstores as a pleasant way to kill time. I would buy something I discovered, but I wasn’t actually there to shop, I was there to browse. Online isn’t the same – it doesn’t get me out of my apartment. If I were childless and located in San Francisco, I’d pay something to keep a favorite hangout around.

    Barry in reply to ecreegan. | March 15, 2015 at 10:58 am

    Great business model – Please donate so we can stay in business.

    They will not survive. 500 x $100 is 50K. Does not go very far. That amount will pay less than 2 people at $15 hour for a 40 hour work week.

    Simply put, socialism has never worked anywhere it has been tried. It has never created one dime of wealth. Where it appears to have some success, it is only because of the wealth built up by capitalism before hand. When the bank account dry’s up, it’s dead

      Ragspierre in reply to Barry. | March 15, 2015 at 5:47 pm

      So long as it’s all voluntary, it’s as good a business model as any.

      Everybody who seeks our custom is asking that, as consumers, we “donate” to their business. This is just more overt, as appeals go.

      Now, the question of whether it works or not is open. And, your analysis is mistaken, I think. The “donations” don’t need to COVER salaries…only the delta in employee expense caused by the coercive mandate of a new minimum wage.

        Barry in reply to Ragspierre. | March 16, 2015 at 12:41 am

        Granted, the donations only have to cover the difference in whatever wage is now paid and the rise to the new minimum. My point was how small the donation amount actually is. Does it cover the new wage gap? I have no idea. Can they sell this? Possibly, in specific business types. But not across the board. The real point here is very simple. It is not a valid business model for most business’s affected by the minimum wage. I was a bit unclear in responding to that particular business.

        Voluntary, it’s fine to try it. But it’s not a model everyone else will be able to follow.

    Ragspierre in reply to ecreegan. | March 15, 2015 at 3:18 pm

    “Brick-and-mortar stores are places to *be* (among many other things, naturally), and that’s not something we have a system to pay them to do.”

    Nonsense! In a market economy, we have PRECISELY such a system.

    A market economy permits an almost infinite number of choices, some of which are not immediately apparent as “economical”. Whole Foods is a rather good example. Consumers value all kinds of different things. The utility of some of those values is cryptic to others, but it is still there for those who hold them.

    This is how to understand the existence of luxury goods, such as several-thousand-dollar handbags. The market for such goods is small, and one could argue perverse in its values. But that isn’t anyone’s business but those who engage in it.

    It also explains why Americans are so generous in private charity. We find utility in paying for that good, and we can when we have enough of our earnings left to us to allow it.

The owners don’t need the full $15/hour for their employees, only the difference between their current wage (in the neighbourhood of $10/hour iirc) and $15/hour. As the owner did the math at the public meeting, the shortfall was about $25,000. (The other $5k is insurance against what San Francisco throws at them next, or a minor business catastrophe, or to bulk up inventory if all goes well.)

They may well *not* survive. They’re dependant on at least 300 customers paying them a nontrivial amount of money, every year, to stick around. But they’ve bought at least one year, and a chance, and that’s worth some serious thought.

    Barry in reply to ebartley. | March 16, 2015 at 12:46 am

    Yes, you might be right that it works in this case. My comment was not clear enough. I was really trying to say it is not a model for most business affected by the new minimum.

    OTOH, they may survive a couple extra years, but unless there is real value for the “donation” they will not survive much longer, IMO. It’s not like a charity that receives donations for perceived good works. Here, the donation is supposed to benefit the donator. How long that perception will last, well, we’ll see in a couple years.

how’s that socialism workin for ya libtards?

Henry Hawkins | March 15, 2015 at 6:15 pm

“Gimme a Big Mac Combo with medium fries and a medium sweet tea, to go please.”

“That will be $29.95, sir.”

    Ragspierre in reply to Henry Hawkins. | March 15, 2015 at 6:51 pm

    …answered the robot who replaced the human.

    Seattle and Sand Friend-Cisco will now be test-beds for robotic food service and preparation.

    Winnah…!!!

Live in a nearby area. Won’t go to Seattle and am quite vocal about it. Those sentiments are gaining steam.

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