Economy

Republicans Silent as Seattle’s Economy Booming With Higher Minimum Wage

Despite the angry protests of Republican politicians and their corporate backers, some fourteen states enacted raises to the minimum wage at the beginning of this year, following in the footsteps of progressive West coast cities like Seattle and Los Angeles. Seattle’s minimum wage as of January 1 is $13-an-hour for large companies of 500 or more employees, and $12 for smaller companies – and there has been substantial overall job growth in the one extremely wage sensitive sector: the restaurant/service industry. The wage increases have failed to derail the job market as predicted by Republicans – quite the opposite, in fact.

A consistent, but fully discredited myth perpetrated by the GOP asserts that increasing the minimum wage to a living wage will have a chilling economic effect for millions of vulnerable people – because companies will be prone to lay people off rather than pay the higher wages. Not surprisingly, the right-leaning American Enterprise Institute (AEI) was quick to point out last August that Seattle’s suffering “the loss of 1,000 restaurant jobs in May following the minimum wage increase in April [$11 an hour] was the largest one month job decline since a 1,300 drop in January 2009, again during the Great Recession.”

The AEI was also fast to wantonly blame the large decline in employment in the restaurant sector on what was highest minimum wage in the country – shamelessly referring to Seattle as the “Emerald City.”  Forbes noted “…many restaurant and fast food jobs are at minimum wage levels. Changes in restaurant employment are often seen as proxies for the effects of wage policies.” However, as Forbes pointed out, the volatility in the Seattle restaurant business was well known and “cherry-picking time frames is unwise if you are really interested in addressing questions of economics and public policy.” It is obvious that AEI failed to take the seasonal nature of the industry into account; business slows during the winter due to the inhospitable conditions and picks up again once temperatures rise.

According to statistics from the St. Louis Federal Reserve Bank, there was a loss of 2,000 restaurant jobs between January to May 2015 (slow season), but a gain of 2,900 jobs between May to November (high season). The gain occurred after the April increase to $11 an hour for a net overall gain of 900 jobs – despite all the AEI prognostication of doom-and-gloom for Seattle’s restaurant businesses.

The disturbing reality is that Congressional Republicans and their presidential candidates consistently and fiercely resist attempts by the President and Congressional Democrats to raise the minimum wage. This is despite the fact that “sixty-three percent of Americans support a minimum wage increase to $15 by 2020, and 75 percent of Americans support raising the federal minimum wage to at least $12.50.”

The minimum wage is a moral imperative – intended to help the poorest of the working folks and their families – enabling the most vulnerable of Americans to become contributing members of society and earning the kind of respect that comes with self-sufficiency. But, the Republicans keep ‘blaming the ‘poor for being poor’ claiming that is, the poor are lazy and the cause of poverty in this country. Even Ben Carson supports raising the minimum wage believing, if nothing else, it is a way for individuals to be removed from public assistance programs. However, below are some the financially privileged leading Republican presidential candidates’ bizarre disrespectful discounting comments on raising the minimum wage:

Trump: raising the minimum wage creates “a lot of problems.”

Bush: “supports eliminating the federal minimum wage.”

Rubio: focusing on the minimum wage is “a waste of time.”

Cruz:  “I think the minimum wage consistently hurts the most vulnerable.”

Fiorina: “The sad truth is that raising the minimum wage will hurt those who are looking for entry-level jobs.”

Christie: “I’m tired of hearing about the minimum wage. I really am.”

In the end, given the limited period of time and small sample represented by the increase to what is barely a living wage in Seattle: “It is impossible to say that the increased minimum wage, or anticipation of the hike, had no influence on the number of food jobs…But what is clear is that the $11 minimum wage failed to crush restaurant employment as opponents apparently hoped to prove.”

While this is a good start, since the federally mandated minimum wage is only $7.25 per hour, income based upon full-time employment paying $10 an hour is still below the federal poverty level. The Huffington Post pointed out that some more progressive cities such as Seattle, Los Angeles, and San Francisco and a handful of smaller municipalities on the West Coast have passed legislation to gradually phase in a $15-an-hour minimum wage. The rest of the country desperately needs to follow in their footsteps – failing to do so simply amounts to yet another subsidy for big corporations to to continue underpaying their workers and forcing them to rely on state assistance to simply get by.

 

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