“The President has long supported raising the minimum wage so hardworking Americans can have a decent wage for a day’s works to support their families and make ends meet, and he supports the Harkin/Miller bill that accomplishes this important goal,” the official said.
The Harkin/Miller bill, officially named the Fair Minimum Wage Act, would raise the federal minimum wage from $7.25 to $10 per hour. First proposed in March by Democrats Tom Harkin in the Senate and George Miller in the House, it would raise the minimum wage 95 cents a year over two years, and would include some tax benefits for small businesses who are traditionally the hardest hit with minimum wage hikes. Small businesses usually oppose raising the minimum wage, but previous wage increases have been matched with tax favors that sweeten the blow.
Senator Chuck Schumer of New York told the New York Times that most of the Democratic caucus supports the bill, and that the party is preparing to mobilize behind it.
In his State of the Union address in February, Obama called for the minimum wage to be raised to $9 per hour. “We know our economy is stronger when we reward an honest day’s work with honest wages,” Obama said. “But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong.”
The higher target of $10 comes as Democrats look to mobilize supporters and put Republicans on the defensive ahead of the 2014 midterm elections, when the party hopes to recapture the House.
A higher minimum wage would have the greatest impact on workers under 25, according to data from the Bureau of Labor Statistics. About half of all workers under 25 earn the minimum wage or less. Just three percent of those 25 and older earn that little. [NYT]
SURSA : TIMES
Obama Supports $10 Minimum Wage
At $10 an hour, Chicago’s minimum wage is not enough to live on
It takes more than twice that, $22.78 per hour, for a single parent with one child to meet their basic budget needs in the Chicago metropolitan area, according to the Living Wage Calculator, a project of the Department of Urban Studies and Planning at the Massachusetts Institute of Technology.
The tool, created by professor Amy K. Glasmeier, has been around 11 years, but it has attracted more attention in recent years as activists around the country push for higher wages for low-income workers. Last summer, Swedish furniture giant IKEA announced that it would use the living wage calculator to set minimum wages for workers at its 41 retail stores in the U.S.
The living-wage calculation is based on the average cost of a range of household expenses on a tight budget, including food, child care, medical expenses, housing, transportation and taxes, adjusted for geographic location and for families of different sizes. The calculator was updated in April to reflect 2014 living costs.
A single parent with three children in the Chicago metro area would need to make $33.69 per hour, more than three times the new city minimum wage, to meet the family’s basic needs. Even for a single adult with no children, the new Chicago minimum wage is 11 percent lower than the living wage, which is $11.14.
The only type of family in Chicago for whom the new minimum wage is sufficient to meet basic needs is a household with two working adults with no children. Those adults would need to make $8.51 per hour each, according to the calculator, to meet a basic budget.
There is consensus among lawmakers and voters on raising the statewide minimum wage in Illinois, which is currently $8.25 per hour — not enough to meet a basic budget for any family, according to the calculator. But there is little agreement on how high or how quickly to raise it.
About two-thirds of Illinois voters approved of raising the minimum wage to $10 per hour on Jan. 1, 2016, in a non-binding ballot referendum in November. In his State of the State address in February, Gov. Bruce Rauner expressed support for raising the state minimum wage to $10 per hour by 2022. Democrats in the state Senate passed a bill that would raise the minimum wage to $11 by 2019.
Child care is the most expensive element of a family’s budget, according to the calculator, which compiled child-care data from the National Association of Child Care Resource and Referral Agencies. Child care for two children costs $11,658 per year in the Chicago area, more than the cost of housing for a family of three.
The calculator makes a few assumptions, some of which could inflate the cost of living estimate used to calculate the living wage. For example, it assumes no deductions on taxes, even though the federal government provides incentives, like deductions for married couples and the Earned Income Tax Credit, that help families make ends meet.
However, other assumptions could have the opposite effect. For example, the calculator assumes, for the sake of simplicity, that a family with two children has one 4-year-old and one 9-year-old. Families with younger kids or children who are closer together could pay more than the calculator’s estimate for child care.
The tool also bases housing costs on the U.S. Department of Housing and Urban Development’s Fair Market Rent estimate for Cook County, which could underestimate the cost of housing for families living in Chicago neighborhoods where rents are higher than they are in the suburbs.
Of the country’s 10 most populous metropolitan areas, Chicago, which is third in population, is seventh in cost of living. The living wage for a single parent of two children in Washington D.C., the most expensive metropolitan area, is 40 percent higher than the wage for that same parent in Chicago. Washington’s minimum wage is scheduled to increase to $10.50 per hour on July 1, the same day that Chicago’s will rise to $10 from the current $8.25 minimum wage.
Los Angeles, the fourth-most-expensive metropolitan area, according to the calculator, recently made headlines when the City Council voted to increase the city’s minimum wage to $15 per hour by 2020. The first increase, to $10.50 from the current state minimum wage of $9, won’t go into effect until July 2016. By then, Chicago’s minimum wage will have increased to $10.50, on its way to $13 per hour by July 2019. But minimum-wage workers in both cities will still be making far less than a living wage.
Source: U.S. Department of Labor
Notes: Minimum wages are as of July 1, 2015. Several cities, including New York, Washington D.C., Los Angeles and Chicago have proposed or passed ordinances that would raise the minimum wage above the listed level, but those increases, if enacted, would take place after July 1. The minimum wage in Georgia is technically $5.15 per hour, but it is superseded by the federal minimum wage, which is $7.25 per hour.
SURSA: Chicago Reporter
RASPUNS DE PE FORUM
1. Minimum wage isn't intended as a way to support your entire family. If you increase it to $10, they want 15, increase it again to 15, they want 20 while the rest of the employment chain stays relatively the same. In a free market, min wage should be set at whatever rate it takes to attract somebody to do that job. What used to be a wage for high school kids making extra money flipping burgers has become a single mom with kids wage. A lot of businesses will streamline the # of employees to make up the difference. More $$ per hour, fewer workers, more automation The real problem is there are no low skill, hard work, good pay jobs out there anymore. While the white collar jobs are paying decent wages, we need blue collar, low skill jobs that pay a decent amount. That will help much more than increasing min wage for no reason.
Seattle’s ‘radical experiment’ might be a model
Note: This post has been updated, see details below the post. Mark J. Perry @Mark_J_Perry NFebruary 18, 2016
Seattle’s city council made history in June 2014 by unanimously passing legislation that will eventually bring the city’s minimum wage up to $15 an hour, the highest in the nation. Washington State already had the distinction at that time of having the highest state minimum wage in the country at $9.32 an hour. The first increase to $10 an hour for some Seattle businesses and $11 for others took place on April 1, 2015. Additional increases to $12.00, $12.50 or $13 an hour took effect for most employers on January 1, 2016. Further increases will continue until the city’s minimum wage reaches the full $15 an hour, which will happen on the first of the year in either 2017, 2018 or 2019 for most employers and as late as January 2021 for some small businesses with fewer than 500 employees.
Seattle mayor Ed Murray applauded the city council in 2014 and remarked then that, “Some have called what we have done a radical experiment. I disagree. The real radical experiment has been the economic policy of the last 34 years that has dismantled our middle class. Today we have taken bold action to begin to reverse that radical trend. Today we have taken action that will serve as a model for the rest of the nation to follow.”
Now that the first Seattle minimum wage increase has been in effect for more than ten months, and as local employers brace for the additional minimum wage hikes that will eventually increase their annual labor costs per full-time minimum wage worker by 61% and by a whopping $11,300 (from the increase in hourly labor costs from $9.32 to $15 an hour), are there any noticeable effects so far on the city’s labor market? Is Seattle’s radical experiment with the highest-ever minimum wage in US history serving as a “model for the rest of the nation to follow”? Or is Seattle serving as an “economic canary in the coal mine” for other cities and states (and the country) considering the “bold action” of imposing higher labor costs on employers by as much as $15,500 annually per full-time minimum wage workers if they enact legislation increasing the minimum wage from $7.25 to $15 an hour?
Early evidence from the Bureau of Labor Statistics (BLS) on Seattle’s monthly employment, the number of unemployed workers, and the city’s unemployment rate through December 2015 suggest that since last April when the first minimum wage hike took effect: a) the city’s employment has fallen by more than 11,000, b) the number of unemployed workers has risen by nearly 5,000, and c) the city’s jobless rate has increased by more than 1 percentage point (all based on BLS’s “not seasonally adjusted basis”). Those figures are based on employment data for the city of Seattle only (not the Seattle MSA or MD), and are available from the BLS website here (data are “not seasonally adjusted”). Those three negative employment effects are displayed in the three charts above and I’ll explain each in greater detail below.
- Employment Effect. The top chart above shows monthly employment in the city of Seattle from January 2007 to December 2015, on both a “not seasonally adjusted” basis from the BLS (dark blue line) and a “seasonally adjusted” basis using a standard seasonal adjustment process used by the Census Bureau and other government agencies (performed using the statistical software program EViews 8.0, see lighter blue line). Following the first minimum wage hike in 2015, there was a decline in the city of Seattle’s employment of 11,037 jobs between April and December as reported by the BLS (from 407,073 to 396,036) and by 8,114 jobs on a seasonally adjusted basis (from 404,202 to 386,089). By both measures of employment, that April to December 2015 drop in Seattle employment was the biggest decline over any 9 month period since between April and December 2009 period during the Great Recession when there were similar, but slightly larger job declines (see top chart above). And the loss of more than 10,000 Seattle jobs (on an unadjusted basis vs. a 9,950 job loss on a seasonally adjusted basis) in just the three months of September, October and November 2015 establishes a new record for the greatest number of Seattle jobs ever lost over a three month period going back to 1990 when the BLS first started reporting the city’s monthly employment levels. Notably, the three-month job losses last year in Seattle from September to November were greater that job losses in any three month period during the last three recessions (1990-1991, 2001 and 2007-2009).
- Unemployment Effect. The middle chart above shows that the number of the city’s unemployed workers increased between April and December last year by nearly 4,700 on an unadjusted basis (dark blue line), and by nearly 4,300 on a seasonally adjusted basis (light blue line). Like for the decline in the city’s employment level last year between April and December, the rise in the number of unemployed Seattle workers between April and December 2015 was the largest increase over any 9 month period since the May 2009 to January 2010 period at the end of the Great Recession.
- Unemployment Rate Effect. The bottom chart above displays the monthly jobless rate in the city of Seattle from January 2007 to December 2015, on both an unadjusted (dark blue line) and an adjusted basis (light blue line). Following the city’s minimum wage increase in April, the seasonally adjusted jobless rate increased by more than one percentage point (from 3.45% to 4.53%) to the highest level in more than two years going back to October 2010. The unadjusted unemployment rate increased by 1.2 percentage points from 3.0% to 4.2% between April and December last year. There hasn’t been as large an increase in Seattle’s jobless rate over a 9-month period since the end of the Great Recession between May 2009 and January 2010.
Maybe the city of Seattle will recover from the serious job market weaknesses that it has experienced since last April when its minimum wage law began imposing significantly higher labor costs on the city’s employers. Considering that Seattle had the largest three-month loss of jobs in city history between September and November last year following the first phase of wage hikes on the way to $15 an hour, it might be the case that the early evidence suggests that this is a “radical model for the rest of the nation to NOT follow.”
Update 1: In a previous update to the post above, the chart above appeared and was created using two different measures of Seattle area employment data from two different BLS data sources. The city of Seattle employment data were extracted from the BLS website here for Local Area Unemployment Statistics (LAUS) and the Seattle MSA employment data were payroll data from the BLS website for Current Employment Statistics (CES). The difference between those two monthly job measures was used to calculate the employment figures for the Seattle MSA ex-Seattle. The data displayed in the above chart indicate that between April and December of last year employment levels fell in the city of Seattle, while jobs increased in the Seattle MSA ex-Seattle. Because the data used were from two different measures/sources, that conclusion was incorrect and I apologize for my mistake. The first three charts and the text of the post were all based on data from a single source (LAUS) and were not affected by the incorrect mix of two data sources in the update to the post.Update 2: The new chart above uses employment data from a single BLS data source (LAUS) for both the city of Seattle and the Seattle MSA (note that payroll data are not available for the city of Seattle). The new results show that employment levels for both the city of Seattle and the surrounding MSA areas fell between April and December of last year: a) in the city of Seattle by 11,037 jobs (and by 2.7%), while jobs in the rest of the Seattle fell by 16,538 (an by 1.1%). So while jobs fell in both areas between April and December of last year, the percentage decline in city jobs was almost three times greater than the percentage decline outside Seattle.
For my original graph that mixed employment data from two different BLS sources, I sincerely apologize, it was an unintentional mistake.
Update 3: There’s another technical issue using city-level employment that I was not aware of when I originally wrote the post above, and that issue was recently brought to my attention by Ironman at the Political Calculations blog in his post “Measuring Job Loss and the Minimum Wage in SeaTac”:
Having established the context in which SeaTac’s minimum wage increase came into effect, let’s next consider the actual month-to-month data that shows how employment levels in the Puget Sound city has changed over time.
Which for us is pretty cool because the city level employment data that we’re using is something that we didn’t know existed until Mark Perry linked to it shortly after he had discovered and used it to correlate large numbers of job losses in Seattle that took place in the months after that city’s minimum wage hike took effect on 1 April 2015.
Since he had already looked at Seattle, we thought we’d look at another city in the Puget Sound area that made national headlines with its own minimum wage hike: SeaTac…..
Although we focused on the five year period from January 2011 through December 2015, the same pattern can be seen in older data – interspersed with what appear to be population adjustments for SeaTac’s data at five year intervals between December and January, which affects the data for the years 2000, 2005 and 2010. Data for SeaTac only extends back to January 1999.
What that tells us is that for the periods where both SeaTac and Seattle’s month over month growth rates for their employment levels are identical is that the data jocks at either the Census Bureau or at the Bureau of Labor Statistics have not disaggregated the city level data from the overall MSA-level data.
The bad news is that this means that city-level data for cities within the Seattle MSA region is only meaningful during periods where it has been ungrouped from the whole. It may be that this level of granularity is something that comes about after the data goes through revisions – much like how the Bureau of Economic Analysis updates its estimates of GDP even years later as it accumulates more detailed information.
That affects Mark Perry’s analysis of the impact of Seattle’s minimum wage hike since it went into effect on 1 April 2015, as the data he used would not appear to have as yet gone through an update that would allow it to be differentiated from the full Seattle MSA. Things like layoffs in other cities in the Puget Sound region, such as Everett, Redmond, Renton and others are mixed into the data.
That’s not an error on Perry’s part, because there is no warning at the BLS’ site interface that would alert one to that situation existing in the data. We only found it because we just happened to notice the similarity in recent data between his Seattle chart and our SeaTac chart and dug into it.
The good news is that the data for SeaTac’s employment in the period before 1 January 2014 has been disaggregated from the whole Seattle MSA, so we can use it to explore some of the impact of that city’s minimum wage hike.
Comment: Thanks to Ironman pointing out the issue using city-level BLS employment data, which might not be useful until it has been disaggregated. That is, some BLS estimates of city level monthly employment data might be based on some constant growth rate applied to the base employment level of each city in an MSA. SURSA: AEI
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Discussion: (81 comments)
- Lyle February 18th, 2016 Oregon just raised the state minimum wage, but did it in tiers, 1 for portland one for the rest of the western part of the state and one for the eastern (empty part of the state) the difference will be about $3 when fully implemented.
Share- hitssquad February 20th, 2016 From Google:
“Oregon’s new plan imposes a series of gradual increases over six years. By 2022, the state’s current $9.25 an hour minimum – already one of the highest in the nation – would climb to $14.75 in metro Portland, $13.50 in smaller cities such as Salem and Eugene, and $12.50 in rural communities.
Those minimums dethrone Massachusetts – where the statewide rate will climb to $11 an hour next year – from the top spot, according to the Economic Policy Institute, a D.C.-based think tank that tracks wage laws across the nation.”
Share- Tim February 20th, 2016 2022 is a decent length of time away, plenty of room for other states to make bigger mistakes!
Share - Pgrabher February 21st, 2016 Makes more sense
Share- Ken February 27th, 2016 Yes. Better to hide the obvious destruction of jobs and business over long periods of time. Doing it all at once would make it obvious the damage of such stupidity, but doing it slowly provides just enough cover to your dishonest politicians and the gullible, such as yourself, to claim it “makes more sense”.
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- Ken February 27th, 2016 Yes. Better to hide the obvious destruction of jobs and business over long periods of time. Doing it all at once would make it obvious the damage of such stupidity, but doing it slowly provides just enough cover to your dishonest politicians and the gullible, such as yourself, to claim it “makes more sense”.
- Tim February 20th, 2016 2022 is a decent length of time away, plenty of room for other states to make bigger mistakes!
- hitssquad February 20th, 2016 From Google:
- Joseph February 19th, 2016 The layoffs at Microsoft and changes to vendors contract length also contributed to the spike in unemployment.
Share- Jon Murphy February 19th, 2016 I’m not sure how much that would affect this numbers as Microsoft is in Redmond, not Seattle.
Share- Seattle Sam February 19th, 2016 Notes:
Only 1300 0f the 18000 MSFT layoffs are in the Puget Sound Area. On the other hand, Microsoft brags that each employee generates up to seven additional jobs in Washington State.
Google alone has added as many new jobs in Seattle area this year as Microsoft cut.
I’m pretty sure that if you work on the Eastside (Redmond, Kirkland, Bellevue, where MSFT has a lot of offices) but live in Seattle, that you would be counted as Seattle unemployment. Microsoft also has at least three offices in the city of Seattle that I know of.
Share- Papadoc February 20th, 2016 The Microsoft number of generating 7 jobs per employee is laughable at best…. unless of course they are leaning quite heavily on a few C-Level jobs like Gates et al.
Even if employees were all paid $160K per year [and that would be a joke], divide by 8 [the primary job plus 7 others] and don’t allow for actual consumption, that would divide out to $20K each. Sorry, but that’s not a job.
Share- Tim February 20th, 2016 I think they are using a multiplier effect. where their job, begets a couple of jobs and those jobs beget others. That’s really the only way you can come up with those types of numbers.
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- Tim February 20th, 2016 I think they are using a multiplier effect. where their job, begets a couple of jobs and those jobs beget others. That’s really the only way you can come up with those types of numbers.
- Papadoc February 20th, 2016 The Microsoft number of generating 7 jobs per employee is laughable at best…. unless of course they are leaning quite heavily on a few C-Level jobs like Gates et al.
- Seattle Sam February 19th, 2016 Notes:
- ETS February 27th, 2016 In 1995 Microsoft didnt even have a presence on K Street in DC. Since Janet Reno and Clinton butt raped MS they now have entire Networks dedicated to the Democrat agenda. MSNBC is a result of the Democrat Party attacking a private company for its own gains. Just like any CRIME SYNDICATE would.
Since then MS makes worse and worse products. Yet another perfect example of what Fascists always bring to the table.
Yea, historically speaking we should all trust the FASCISTS for our facts… Has your healthcare went down $2500 a month? You idiots.
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- Jon Murphy February 19th, 2016 I’m not sure how much that would affect this numbers as Microsoft is in Redmond, not Seattle.
- Jon Murphy February 19th, 2016 I wonder what the story behind these numbers is. We usually see adjustments made along different margins and not such a pronounced drop in employment immediately after the wage goes into effect.
Share- Breck Wightman February 19th, 2016 It makes me wonder if such an immediate impact is the product of firm’s expectations for the future wage increases they know are coming rather than the actual financial burden being placed upon them.
Share- Gary Thomson February 19th, 2016 A distinction without a difference? If you are running a business, know your cost structure and evaluate the business affected by a higher cost structure due to a certain new additional cost, you don’t need to wait for the actual burden to arrive to make a business decision. In fact it would be foolhardy & a dereliction of responsibility to do so. Nevertheless, in either case, businesses respond to changing business environmental variables and usually the sooner they do it, the better. If they don’t, they go out of business.
Share - Gary February 21st, 2016 You think?
If you’ve ever been responsible for a payroll you understand it’s vital to stay “ahead of” the financial requirements of your business. So yes, you must anticipate and estimate future financial needs. This manifestes it’s self as a “ball in the pit of the stomach,” feeling that the business owner or manager has to live with.
That’s why with confidence one can say, above average wages will insure lay-offs, net loss by attrition and a wait-and-see attitude, in order to offset for potential financial uncertainty.
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- Gary Thomson February 19th, 2016 A distinction without a difference? If you are running a business, know your cost structure and evaluate the business affected by a higher cost structure due to a certain new additional cost, you don’t need to wait for the actual burden to arrive to make a business decision. In fact it would be foolhardy & a dereliction of responsibility to do so. Nevertheless, in either case, businesses respond to changing business environmental variables and usually the sooner they do it, the better. If they don’t, they go out of business.
- Tim February 19th, 2016 It could also be the unseen effect of a lack of businesses opening in Seattle as they attempt to avoid having to deal with this.
Can’t wait to see the analysis of how many restaurants switch to a service charge model, because that is becoming a very real phenomenon here.
Share- Dean Cardno February 27th, 2016 What do you mean by “a service charge model” for restaurants, and how does it help them in dealing with a higher wage burden?
Share- Ron H. February 28th, 2016 Dean
Restaurants may add a an extra “service charge” to your bill to help cover the increase in labor costs.
Share - Ron H. February 28th, 2016 Dean
Restaurants may add an extra “service charge” to your bill to help cover their increased labor costs.
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- Ron H. February 28th, 2016 Dean
- Dean Cardno February 27th, 2016 What do you mean by “a service charge model” for restaurants, and how does it help them in dealing with a higher wage burden?
- Voyager February 28th, 2016 I suspect many of these business have already eaten up their margins managing the impacts of the ACA.
Nobody talks about it publicly, largely because for many businesses it is extremely competition sensitive, but the ACA has caused the cost of employing people to increase dramatically, likely even faster than the actual costs being passed down to employees.
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- Breck Wightman February 19th, 2016 It makes me wonder if such an immediate impact is the product of firm’s expectations for the future wage increases they know are coming rather than the actual financial burden being placed upon them.
- GlennJericho February 19th, 2016 It would be interesting to see a welfare enrollment chart with this too (or are the “unemployed” charts reflective of getting an unemployment check?). It appears that there was a spike of people trying to get $15/hr jobs just before the wage became effective.
Share- Tim February 19th, 2016 It could also be the unseen effect of a lack of businesses opening in Seattle as they attempt to avoid having to deal with this.
Can’t wait to see the analysis of how many restaurants switch to a service charge model, because that is becoming a very real phenomenon here.
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- Tim February 19th, 2016 It could also be the unseen effect of a lack of businesses opening in Seattle as they attempt to avoid having to deal with this.
- richard February 19th, 2016 Mark,
During the first quarter of 2015, the jobless rate took a nosedive of app 1%. That’s huge.
On the other hand, the introduction of a higher minimum wage on 1st of april was known to everybody.
How come employers quickly hired scores of people just prior to the introduction of the hike, just to let them go right after?
It seems to me that something else is in play.
Share- Mark Perry February 19th, 2016 Here is the employment for the entire Seattle MSA: https://research.stlouisfed.org/fred2/series/SEAT653NA
As you can see, employment for the MSA doesn’t show any decline, and in fact has continued to increase steadily. So the only part of the MSA showing decline last year is apparently the city of Seattle, and that’s the only part of the MSA affected by the pending 61% in labor costs for minimum wage workers.
Share - Terrill Kincaid February 19th, 2016 Getting projects completed prior to the increase in labor rates…
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- Mark Perry February 19th, 2016 Here is the employment for the entire Seattle MSA: https://research.stlouisfed.org/fred2/series/SEAT653NA
- Citizen Buddy February 19th, 2016 It should be noted that the needlessly redundant City of Seattle Civil Rights Office, has completed their first investigations in the area of wage abuse.
One industry that was scrutinized thoroughly, for the contours and recesses, was topless dancing. Seattle, stupidly, did not figure that workers in certain trades receive tips.
So, despite the observation that tips were probably abundant, the investigators found the young ladies weren’t being paid properly and the establishments will probably get fined.
Share- Ron H. February 19th, 2016 I’ve just applied for a job with the CSCRO as an assistant scrutinizer. The job doesn’t pay much, but has great benefits.
Share- Citizen Buddy February 19th, 2016 I’m sure this job posting will arouse a lot of attention.
Share- Ron H. February 19th, 2016 Yeah, I’m 12,465th on the list, but I’m sure those 12,464 are less qualified than I am.
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- Ron H. February 19th, 2016 Yeah, I’m 12,465th on the list, but I’m sure those 12,464 are less qualified than I am.
- Citizen Buddy February 19th, 2016 I’m sure this job posting will arouse a lot of attention.
- Ron H. February 19th, 2016 I’ve just applied for a job with the CSCRO as an assistant scrutinizer. The job doesn’t pay much, but has great benefits.
- Jacob Vigdor February 19th, 2016 Can you please identify the specific BLS data series used to identify “Seattle (City Only)”? The BLS website linked here provides data for the Seattle-Bellevue-Everett Metropolitan Division and the Seattle-Tacoma-Bellevue MSA, but both these regions encompass a much wider geographic area.
As the director of the University of Washington research team evaluating the Seattle minimum wage, I am unaware of any public BLS data series that identifies employment at the City level. Your assistance would be appreciated.
Our team is currently working directly with the Washington Employment Security Department to measure not only employee headcount but hours worked for the full population of geographically fixed employers in the City of Seattle. By comparison, BLS estimates are based on a sample of just over 1% of the business entities in Washington state.
Share- Mark Perry February 19th, 2016 1. Go to the BLS website here (this is the link that now appears in the post): http://data.bls.gov/cgi-bin/dsrv?la
2. Select “Washington”
3. Then select “Cities and Towns Above 25,000 Population”
4. Then select “Seattle city”
5. Then you can select: Unemployment rate, Unemployment, Employment or Labor Force.
The 4 “Series IDs” are these:
LAUCT536300000000003
LAUCT536300000000004
LAUCT536300000000005
LAUCT536300000000006
Share- Mark Perry February 20th, 2016 See post, I have a graph at the bottom that shows: a) employment in the city of Seattle vs. b) employment the rest of the Seattle MSA (Seattle MSA minus the city of Seattle), so that we can compare employment losses in the city of Seattle to the employment gains in the surrounding suburban areas. Hope that helps.
Share - Matthew February 21st, 2016 Even using the same BLS series for the broader Metro region, then subtracting the Seattle estimate, I cannot reproduce the results above. For example the employment high for the MSA is not Nov-15, but rather Apr-15. And the link to the Fred plot later in the post is clearly a different series. My prior is to expect to see an employment response but I am troubled that I can’t find this in the original datasets.
Share - J. Doe February 24th, 2016 Doesn’t BLS record local area unemployment based on residence? If so, is it plausible that Seattle workers living in these nearby cities who are laid off contribute to the city of residence unemployment? This can explain the similar patter on the employment charts for the cities you mention.
Although, I could be wrong about how unemployment is recorded by the BLS.
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- Mark Perry February 20th, 2016 See post, I have a graph at the bottom that shows: a) employment in the city of Seattle vs. b) employment the rest of the Seattle MSA (Seattle MSA minus the city of Seattle), so that we can compare employment losses in the city of Seattle to the employment gains in the surrounding suburban areas. Hope that helps.
- DanBC February 27th, 2016 So, you’re a Director at UDUB, and you can’t delineate data by easily available dropdown menus?
W-O-W, that higher education reflects more about Washinton’s POT laws, than education.
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- Mark Perry February 19th, 2016 1. Go to the BLS website here (this is the link that now appears in the post): http://data.bls.gov/cgi-bin/dsrv?la
- Scott Bailey February 19th, 2016 Mark, the employment number you use is a LAUS-basis number of employed residents, not nonfarm payroll employment. BLS and the state of Washington don’t produce a city of Seattle nonfarm employment series. Any regional labor market economist will tell you that county and sub-county labor force and employment numbers should be used “with caution”, which is our way of saying that the standard error is large and that the data sometimes leaves us scratching our heads.
Share- marque2 February 20th, 2016 What labor is going down even with a minimum wage hike? I’m scratching my head. The only thing I can figure is it must be those damb republicans.
Data is frequently explained away by the powers that be, when it goes against their line of thinking, or best intentions. Frequently head scratching really means inconvenient.
Share- Citizen Buddy February 20th, 2016 “Frequently head scratching really means inconvenient.”
BINGO.
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- Citizen Buddy February 20th, 2016 “Frequently head scratching really means inconvenient.”
- marque2 February 20th, 2016 What labor is going down even with a minimum wage hike? I’m scratching my head. The only thing I can figure is it must be those damb republicans.
- Dave February 19th, 2016 The math is just so easy. Why is it people struggle with this. If your labor cost goes up, you either reduce the number of laborers, or raise your prices, or find cheaper materials.
Share- Tim February 19th, 2016 This is true, however there are a variety of margins that an employer can change to reduce the cost of labor aside from wage when faced with mandated limits by the city/state/Feds etc. They can cut hours, reduce fringe benefits, increase required hours to qualify for Health Care. It isn’t simply a given that they will make layoffs as this often terrible for morale and just a generally bad P.R. move.
I suspect that largely the biggest adjustments will be the subtler things I mentioned, combined with increased prices (especially at restaurants, where this has had the largest impact), and slow down in new businesses that employ people in this wage range. One thing people often forget is that so few people make the minimum wage that finding the impact in the data can be difficult, so I am hesitant to even attribute these new numbers to this change.
Share- Chris February 20th, 2016 A rise in minimum wage necessarily raises for everyone. It’s not just the $9/hour getting a raise to (eventually) $15/hour, the guy making $12.50 an hour will now be making closer to $20 an hour.
So labor costs are raised dramatically for EVERY employee, not just the few in the minimum wage tier.
Share- Ron H. February 20th, 2016 “A rise in minimum wage necessarily raises for everyone.”
How do you figure that? Do employees at $125k/yr start making closer to $200k/yr when min wage is raised?
Share- I R February 20th, 2016 Not the case for every situation, but some (perhaps most) union contracts have built in escalators which are tied to the minimum wage.
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- I R February 20th, 2016 Not the case for every situation, but some (perhaps most) union contracts have built in escalators which are tied to the minimum wage.
- Tim February 20th, 2016 Outside of union contracts where prevailing wages are tied to the local minimum wage, this is really often not the case.
It certainly not the case that someone goes from $12.50 to $20 because someone below him got a raise. Did the person’s labor productivity magically increase? Do they now supply over $20/hr. in value to their employer? Why would they start being paid at a loss by their employer especially when the government is not forcing them to do so at this level?
Share- Kilna February 24th, 2016 If you are running a business with managers at $15 and subordinates under $10, you can bet your ass that when the minimum wage is raised to $15, those $15 managers are going to want more compensation than their reports if they have more skills, seniority, etc.
Share - Ron H. February 25th, 2016 Kilna
You know what they say: “If wishes were horses…”
You are describing businesses in which some of those making less than $10will lose their jobs, or maybe the business will just close if unable to raise prices or adjust labor costs in some other way.
If those making $15 now could make more, they would already be doing so. They won’t just start getting paid more because they want to be paid more.
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- Kilna February 24th, 2016 If you are running a business with managers at $15 and subordinates under $10, you can bet your ass that when the minimum wage is raised to $15, those $15 managers are going to want more compensation than their reports if they have more skills, seniority, etc.
- Ron H. February 20th, 2016 “A rise in minimum wage necessarily raises for everyone.”
- Chris February 20th, 2016 A rise in minimum wage necessarily raises for everyone. It’s not just the $9/hour getting a raise to (eventually) $15/hour, the guy making $12.50 an hour will now be making closer to $20 an hour.
- ericinaustin February 26th, 2016 or you increase volume and if more people have more money to spend then demand goes up. The math isn’t hard but you have to show all of your work.
Share- ETS February 27th, 2016 Demand can’t go up because the City is desperate to rape the Citizens for parking that it offers very little convenient inexpensive parking. Thats right Leftists like the NAZIs and Communists like modern Progressive ilLiberals loved trains too.
Share - Ron H. February 28th, 2016 eric
If you believe that, I have a generator to sell you that not only will power your entire house, but creates enough surplus energy to power itself. (jk)
If everybody suddenly had twice as much money do you think we would all be twice as rich?
Unless higher pay represents more production, the money for the higher min wage must come from some place else, where demand will be lower by the same amount it increased in your scenario.
Income = production: Unless production increases, you are just shifting income from one person to another when you raise the min wage.
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- ETS February 27th, 2016 Demand can’t go up because the City is desperate to rape the Citizens for parking that it offers very little convenient inexpensive parking. Thats right Leftists like the NAZIs and Communists like modern Progressive ilLiberals loved trains too.
- DanBC February 27th, 2016 Because facts, statistics, and general business principles, get in the way of the social justice warrior meme and dogma. Talk about Inconvenient Truths……………..
Share - ETS February 27th, 2016 Liberals believe the fairy tales indoctrinated into them from the Frankfurt School. Look at the insane cult that the left has become.
McCarthy wasn’t a verb, he was a Prophet.
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- Tim February 19th, 2016 This is true, however there are a variety of margins that an employer can change to reduce the cost of labor aside from wage when faced with mandated limits by the city/state/Feds etc. They can cut hours, reduce fringe benefits, increase required hours to qualify for Health Care. It isn’t simply a given that they will make layoffs as this often terrible for morale and just a generally bad P.R. move.
- Dave February 19th, 2016 The math is just so easy. Why is it people struggle with this. If your labor cost goes up, you either reduce the number of laborers, or raise your prices, or find cheaper materials. Or you move away.
Share- Mark Perry February 19th, 2016 Amen.
Share - Gregg Eshelman February 20th, 2016 Many small businesses operate on the thinnest of profit margins. Doesn’t matter what they pay in wages, an increase in the minimum wage forces all wages up.
When there’s no room in the budget for more expenses in wages and you are already operating with the minimum number of employees you need – you can lay anyone off or cut their hours. All that’s left is to raise prices.
Raise prices and sales *will* fall, reducing gross income. Once the income falls below expenses, your business is done for, so you close up shop and all of your employees are out of work.
The smart business owner looks ahead at what this forced increase will do and closes up before running out of money.
Share- Ron H. February 20th, 2016 “Raise prices and sales *will* fall,”
Exactly. Even if they don’t fall at that particular business, they will fall somewhere else in the economy as consumers, with no additional income to spend, adjust their spending priorities.
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- Ron H. February 20th, 2016 “Raise prices and sales *will* fall,”
- Mark Perry February 19th, 2016 Amen.
- SeattleGuy February 20th, 2016 Meanwhile, in Realityville; the City of Seattle, lost approximately 700 RESTAURANT jobs since the change, while the number of restaurant jobs in surrounding areas went up. This number represents less than 6 or 7% of those service jobs that would call themselves food services. So, what this leaves me to think… YIPPIE!
If we look at basic math, if Seattle proper loses an overly pessimistic 10% of its restaurant jobs. If the remaining 90% of restaurant workers are now making 50% more than they were before, that is still a massive improvement in overall economic gains for the lower/middle classes, is it not?
I would love to see the math on how 9 out of 10 workers getting a 50% raise isn’t a net gain. Say a pool of 10,000, and they each make $25,000 with tips. The loss of 10% of the workforce costs $25,000,000. Meanwhile 9,000 people now make $35,000, and extra $10k/year. So that’s $90 million added.
I think what we’re seeing is a lot of small business owners overreacting; these are not strategic business professionals thinking ahead.. they’ve started laying off and not back-filling jobs open due to regular attrition. They’ll start hiring again when they see customers waiting and work not getting done; they’ll raise the cost of ice tea and bread and everyone will be none-the-wiser.
Another thing that’s missing here is the fact that with Amazon concentrating the vast majority of its workforce in downtown Seattle, the area has become affordable to the average service worker. Amazon is currently hiring kids out of college for $105,000 to $115,000 per year. LOTS of service workers have moved to the burbs (where I live, Bellevue.. which is still expensive) for less expensive housing, but still making a $11 to $13 per hour wage (the gas station by my house had a help wanted sign recently for $13 to 15 per hour for a cashier.. anecdotal, I know).
Share- Ron H. February 20th, 2016 Important question: Where did that $90 million come from? Please consider carefully .
Share- Ron H. February 20th, 2016 Sorry, the question pertains to the example in your 3rd paragraph.
“. So that’s $90 million added.“
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- Ron H. February 20th, 2016 Sorry, the question pertains to the example in your 3rd paragraph.
- Tim February 20th, 2016 I promise you that this minimum wage increase is not going to be of the magnitude of “50% for 9 out of 10 restaurant workers.”
As someone who actually works in this business as an hourly employee, let me tell you how it is far more likely to go.
What we are going to see, and this has already begun, is service charges at the vast majority of restaurants. Expect 20% to be added on and expect a decent sized portion of this to be used by the restaurant to help offset the increased labor costs of their Back of the House employees. Your service staff will be lucky to break even in this arrangement and many will probably come out behind (the devil is really in the details and this will vary from business to business).
Very very few in this business take home minimum wage level salaries, this is change was not something they asked for and really not something that has been welcomed. But hey, it made the city council feel oh so good about themselves, so that’s…something.
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- Ron H. February 20th, 2016 Important question: Where did that $90 million come from? Please consider carefully .
- Sam B. February 21st, 2016 The CO of Wingstop was interviewed by the WSJ a few weeks ago When asked about the Seattle minimum wage increase, she replied that Wingstop currently had one restaurant in Seattle and would not be opening any more. She said that also would be the same far as San Francisco and Los Angeles.
Share - Amadeus 48 February 21st, 2016 The real minimum wage is zero. Money allocated by regulatory mandate is by definition money that has been steered away from market transactions (i. e., voluntary trades among parties that leave each of the parties believing they are better off). Such mandates lead to distortions and misallocations of capital. These distortions leave society in general worse off economically, and some individual members (those who are now unemployed but would have been employed in the absence of the mandate) much worse off. This is pretty brutal stuff. Seattle city council should be ashamed of its callousness towards its most vulnerable residents. Through this mandate they have taken from the people at the entry level and given to those who have a better chance of holding on to employment because of better skills and experience.
Share- Ron H. February 21st, 2016 But some of Seattle’s most vulnerable have loudly agitated for this very thing.
Share- Amadeus 48 February 22nd, 2016 The agitators obviously believe that they will keep their jobs at increased pay. Some of them are right, and some of them are wrong. Those whose work is least valued by their employers are wrong. But more will be unemployed than otherwise because of this mandate.
Share- Ron H. February 22nd, 2016 All very true, I agree. My point was that the city council may only be carrying out the wishes of their constituents.
Share- juandos February 25th, 2016 ron says: “My point was that the city council may only be carrying out the wishes of their constituents“…
One wonders if all the constituents are talia janes?
Share - Ron H. February 25th, 2016 juandos
Can you say “entitled”?
Share - DanBC February 27th, 2016 Their “constituents”, or, the resume builders, who are establishing their social justice warrior bona fides, for their own, selfish, political ambitions?
Let’s face it,smart employers will just up and move over to any one of the dozen surrounding cities near Seattle (Lynnwood, Renton, Seatac, Edmonds, etc), and carry on, business as usual, without having to deal with the extortionist policies of the Seattle City socialists
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- juandos February 25th, 2016 ron says: “My point was that the city council may only be carrying out the wishes of their constituents“…
- Ron H. February 22nd, 2016 All very true, I agree. My point was that the city council may only be carrying out the wishes of their constituents.
- Amadeus 48 February 22nd, 2016 The agitators obviously believe that they will keep their jobs at increased pay. Some of them are right, and some of them are wrong. Those whose work is least valued by their employers are wrong. But more will be unemployed than otherwise because of this mandate.
- Ron H. February 21st, 2016 But some of Seattle’s most vulnerable have loudly agitated for this very thing.
- Michael February 21st, 2016 Oh, I get it. Seattle is trying to push out all the ‘undesirables’ without sounding like the elitist pricks they actually are. . .
Share - david keller February 22nd, 2016 I’m from Pa. and I don’t believe raising the minimum wage is really helpful to the overall economy and it looks like the evidence is leaning that way. What would be your suggestion concerning minimum wage that would best help the economy?
Share- Ron H. February 23rd, 2016 david
Eliminating the min wage would allow people who are not now allowed to work, because they cannot produce enough to justify the min wage, to find jobs that paid at their skill level.
Share- ETS February 27th, 2016 Exactly. Im not paying someone $15 an hour to sweep the sidewalk or clean the toilet. Id rather do it myself. Thus eliminating a job for a teen.
Share- ETS February 27th, 2016 Thus eliminating jobs for 2-3 teens.
Share - Ron H. February 28th, 2016 And sweeping the sidewalk yourself leaves you with less time to do those things you are more skilled at, and which produce more value for others and therefore for yourself – like operating a business.
Your sweeping your own sidewalk creates little value for me, but making donuts sure does.
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- ETS February 27th, 2016 Thus eliminating jobs for 2-3 teens.
- ETS February 27th, 2016 Exactly. Im not paying someone $15 an hour to sweep the sidewalk or clean the toilet. Id rather do it myself. Thus eliminating a job for a teen.
- Ron H. February 23rd, 2016 david
- TBlakely February 27th, 2016 For Progs/Libs it’s about power not results. That’s why pretty much every ‘deep’ blue major metropolis are racist hellholes with rampant corruption and a fiscal nightmare. A very dangerous group of nihilists.
Share- ETS February 27th, 2016 Ding ding ding. Nailed it!
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- ETS February 27th, 2016 Ding ding ding. Nailed it!
- ETS February 27th, 2016 How stupid are you to think inserting an army of bureaucrats into what should be a PRIVATE CONTRACT between a business owner and an individual will ever make things better for anyone but the bureaucrats?
So much of left-wing thought is a kind of playing with fire by people who don’t even know that fire is hot.
Share - Michael W. Perry February 27th, 2016 Quote: Seattle mayor Ed Murray applauded the city council in 2014 and remarked then that, “Some have called what we have done a radical experiment. I disagree. The real radical experiment has been the economic policy of the last 34 years that has dismantled our middle class. ”
Sigh, you see a good illustration of why I was happy to leave Seattle in 2012. In this case, the city’s mayor assumes that raising the minimum wage will help the middle class. Virtually by definition, if your wage goes up when the minimum wage goes up you are not middle class. If anything, it hurts, since that means you pay more for almost everything you buy.
Not very bright. Not bright at all.
Share - opus February 28th, 2016 It’s ironic that these retards ignore the fact that minority teens looking to establish themselves in the job market will be harmed the most by this idiocy.
Why do progs hate minority teens?
Share - Matthew February 28th, 2016 I spent 20 year in government in the Seattle area. I left since no one involved seemed to think that facts mattered. I, like many of the commenters here, expect the minimum wage does harm not good. But no one here seems concerned that the graphs that are part of the original post don’t appear to be accurate. Do the facts matter? Can anyone replicate the results?
Share - Daniel March 4th, 2016 How will the impact of those who were already making $14-16 per hour be measured? Ie, if I’m making $15 per hour and now the least skilled/qualified person is also making $15/H, I will want a substantial raise. If I want to stay 40% above that minimum wage, I’ll need to be getting $20.60/H. I don’t see many employers being happy with that. The ripples go out from there. Just a common man’s thoughts.
Share- Ron H. March 5th, 2016 Daniel
It’s unlikely that those making just above min wage will get raises. It’s just not possible to pay everybody more without their productivity increasing by the same amount.
I think we will see those who get more in hourly pay losing hours worked and other benefits they may get now. Some businesses will close, leaving all their workers worse off. Businesses that are able to raise prices without losing too much business will cause low income workers elsewhere to lose out as consumers adjust their spending priorities.
There is no free lunch.
- Ron H. March 5th, 2016 Daniel