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A follow-up to the Seattle restaurants/minimum wage story

[ 28 ] March 18, 2015 |

A reader sends along a link to this Bethany Jean Clement piece in the Seattle Times.  Clement, in a refreshing act of journalism against her employer’s editorial interests, asks the restaurant owners about this, and all four openly repudiate the assertion that the coming minimum wage increase is a ‘factor’ in their decision. One owner in particular expressed some annoyance at being made a poster child for right wing nonsense:

We were never interviewed for these articles and we did not close our … location due to the new minimum wage,” Kounpungchart and Frank said in an email. “We do not know what our colleagues are doing to prepare themselves for the onset of the new law, but pre-emptively closing a restaurant seven years before the full effect of the law takes place seems preposterous to us.”

Frank went so far as to send a note to the author of the Washington Policy Center post saying: “Our business model is conducive to the changing times and we would appreciate it if you did not make assumptions about our business to promote your political values.”

As a point of clarification, the absurdity of the original Seattle Magazine story becomes even more clear if we look at the implementation schedule. The minimum wage in Seattle is presently 9.47, up from 9.32 on January 1st (Washington has an annual inflation adjustment for the minimum wage). On April first the implementation of Seattle’s minimum wage begins, but for employers with under 500 the minimum compensation goes to 11.oo an hour, but the minimum wage for tipped employees only goes to 10.00. So it’s a 53 cent increase in most cases, and 1.53 in the case of non-tipped employees making bare minimum.

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Comments (28)

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  1. efgoldman says:

    Right wingers making shit up? Well I never….
    (Real, true, provable facts always have a liberal bias.)

  2. keta says:

    Don’t you love it when a journalist actually practices journalism? Isn’t it a great service to us all? Don’t you wish more journalists would practice journalism?

    I sure do.

  3. humanoid.panda says:

    What I find really amusing is the absolute economic ignorance of the guys who are peddling the restaurant closures line. For once, we are talking about premium locations here, so owners would likely hike prices rather than walk away from their business. Even in lower margin places, given that Seattle is a boom town, and it’s very doubtful that demand for eating out would dissapear after the wage hikes, the most one would expect based on economics 101 is replacing labor by machines, not restaurant closures.

    • Sly says:

      For once, we are talking about premium locations here, so owners would likely hike prices rather than walk away from their business.

      The notion that any business would close up shop rather than minimally increase payroll outlays is ludicrous.

      Any successful business – one presumably not run by idiots – tries to generate just enough supply to meet demand. If an owner argues that an increase in the minimum wage will cause them to cut back staff (i.e. reduce supply), the most obvious rejoinder is why haven’t they cut back staff already? If an owner argues that they will have to increase prices, then, again, why haven’t they maximized their prices already?

      In all cases, its cheaper for a business to simply eat such costs rather than try to make up those costs elsewhere. Raising prices reduces demand. Reducing supply leaves unfulfilled demand. Businesses only do these things when they assume that they can, not when they want. And its important to note that we’re talking about minuscule cost increases; a restaurant likely sees more year to year cost increases on the price of ingredients or taxes on the property than increases in payroll from a gradual minimum wage increase.

      • Aimai says:

        But read the comments on that piece and you will tear your hair out. Against stupidity the gods themselves contend in vain.

      • Tyro says:

        Any successful business – one presumably not run by idiots

        Well, that rules out most restaurants.

      • sparks says:

        Taxes on the property? More like rent on the property.

      • JustRuss says:

        The notion that any business would close up shop rather than minimally increase payroll outlays is ludicrous.

        Oh really? Then explain why Papa John’s stopped selling crappy pizza and closed down after Obamacare passed. Oh, wait…..

        • djw says:

          I still maintain that papa johns’ owners’ assertion that complying with Obamacare and providing his employees with health care would raise the price of a pizza by 11 cents was perhaps the single most compelling argument for the bill I heard.

          • Denverite says:

            Best part is that Papa John’s is a franchisor and really doesn’t make pizzas. And its franchisees almost certainly don’t have 50 FTE.

            That said, of the crappy chain pizza delivery places, I like Papa John’s the best. Even if the local franchise we order from (the three times a year we order delivery pizza) is owned by that struggling small business owner Peyton Manning.

          • cpinva says:

            I found it rather telling that McD’s, arguably set to be hit far harder by the ACA than puny by contrast Papa Johns, said not a peep publicly. I guess they figured one fast food moron being publicly moronic was sufficient.

  4. ColBatGuano says:

    Fortunately for right wing hacks, no evidence is required to support their economic theories. My favorite comment there is the guy who insists that the owners are lying to protect their (closing) businesses.

  5. Denverite says:

    Apropos of this, I’m curious. In cities/states that don’t distinguish between tipped and non-tipped employees for minimum wage purposes (or barely distinguish, like Seattle), have tipping practices changed? What about tip-sharing arrangements with busboys and bartenders? Or are waitstaff getting the mandated minimum wage plus tips? (Please note I’m not saying they shouldn’t get that.)

    • I believe the western states never had a tipped minimum, as opposed to it being a later change. Tipping standards are the same here in Oregon as anywhere, at least culturally. I have never heard anyone justify reducing their tip or not tipping due to the minimum wage laws. Most people I’ve talked to about it had no idea that there is such a thing as a tipped minimum or that Oregon differed from other states in not having one.

    • djw says:

      As someone who goes out a fair amount both here in Dayton and in Seattle, if anything people seem to tip a little better in Seattle. So I’m skeptical. But I checked: the seven states that don’t give tip credit for wages hold the following ranks on one tipping by state study: 1 (AK), 22 (NV), 29 (MT), 32 (WA), 38 (OR), 39 (MN), 45 (CA). So I suppose they average slightly lower tips than the nation as a whole. But the range from best state to worst is only 3%, 2% if throw out Delaware, so these are trivial distinctions. Also, note the best tipping city! The limit to data from one particular provider, Square, probably limits the value of the data.

      • Josephine says:

        I think you’re right that the data only being from Square limits the conclusions that can be drawn from it. More importantly than it being just one provider, though, is the fact that the transactions are traceable. I’ve had a lot of friends in food service over the years and if there’s one thing they’ve taught me about tipping it’s that it MUST BE IN CASH! I tip high, and I suspect that other generous tippers know to use cash money. The IRS isn’t even hearing about that (probably), so I think most data on tipping is going to be very incomplete and skew low.

        • if there’s one thing they’ve taught me about tipping it’s that it MUST BE IN CASH

          I’m sympathetic to this in cases where the management is stealing tips (which is illegal in my state), but otherwise I don’t really care to be party to help someone else evade taxes. Honestly, I’m surprised by how many people I’ve run into (cab drivers and bartenders, mostly) who tell me straight up that they prefer cash tips because they don’t pay taxes on them.

          • Katya says:

            Me, too. I’m not going to help you cheat on your taxes, sorry.

          • Josephine says:

            It’s interesting, it never occurred to me to think about why it is that I don’t approve of tax cheating, but it’s never bothered me when tipped employees don’t report tips. I’m in California, where there’s no tipped minimum wage, and I guess tips feel like gifts to me rather than income and it rankles me that they’re taxed. I can see that that’s inconsistent, since tipped employees earn their tips in a strong sense, and they certainly count on them as income, but in another strong sense they really are gifts. It feels like a moral interference pattern created by the intersection of the impersonal realm of taxation and the personal human realm of gift-giving. Maybe I’d feel differently if there were a tipped minimum wage here, but probably not.

  6. cpinva says:

    this was a real piece of work, in the june, 2014 editorial:

    “Without a plan, nonprofits would have to make an untenable choice between their employees and their mission of serving the poor and people with disabilities.”

    of course, with that rise in the minimum wage, these non-profits just might have fewer poor people (including their employees) to serve. it’s as though everything in their world occurs in a vaccum.

  7. zolltan says:

    I was wondering where Bethany Jean Clement went when she left the Stranger. Sad to see she took a demotion to the Times, but happy to see she is still doing good work.

  8. […] Earlier this year, we saw a pathetic attempt to claim that the first phase of Seattle’s new minimum wage law was already–a month before it went into effect!–destroying the restaurant industry in the city make the rounds in a variety of right wing publications. It was based on a strikingly inept attempt to extrapolate a trend from a few anecdotes, and the narrative collapsed under the slightest scrutiny. […]

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