Seattle Passes Ordinance For $15 Minimum Wage

I don't make minimum wage, but I do eat out several times a month..not always fast food. Because:

My schedule, I work 2 jobs and sometimes it's the best option with how my day is going.

If my wife is working late or ill I get takeout but I try to get something better than McDonalds, since I can't cook.

I'll agree too Mister XXXX, our culture now is gimme this gimme that now.

 

After 2 or 3 pages the insults started flying! lol. I'll just weigh in my opinion here from a different aspect: An actual small business owner with employees.

Here is what I see wrong with the minimum wage increase:

1. $15 minimum wage means that in order to keep the current employees I have at 15-16 per hour, they will want an increase to 17 or 18 because they have tenure and experience over the minimum wage people.
2. I, and certainly no other business owner will want to absorb the cost. So this means that I will have to increase the prices in the shop.
3. Parts suppliers, under the same problem will increase the cost of my parts I buy so that they don't have to absorb the cost of THEIR increased wages. This in turn will require me to increase my parts prices.
4. After all is said and done, and all businesses have balanced out from the increased cost of doing business, that minimum wage employee will STILL barely be able to get by because his cost of living will not have actually changed.

Here is a breakdown:
Joe used to make $12 per hour. 40 hour weeks gets him around $1900 per month before taxes. Let us say his take home pay is $1500 His average rent was $800, groceries/shopping $300, utilities $200, vehicle and gas $200. (Obviously other costs are there, but we are just coming up with a raw example)He gets the bump to $15 per hour, giving him a 25% pay increase. (Income increased now to $2400 per month, take home of $1700, assuming employer does not cut time, and accounting for increased tax bracket of 25% pay increase)


Businesses balance out the cost of increased labor costs, raising average prices to compensate. Let us assume that all costs are increased by 25% to match the increased percentage pay rates went up.
Let us assume that rent does not change. Groceries go up from $300 to $375. Utilities go up from $200 to $250. vehicle and gas from $200 to $250. His cost of living increased by $175 per month. His pay only went up $200. After all is said and done, his ACTUAL increase only went up by $25 per month! So a 25% pay increase only netted less than $7 per week of actual income.




Now here is the reality if minimum wages go up to $15:
I will have to do one of two things: Either give an acceptable pay increase and cut two employees hours slightly, or let one employee go. While my shop IS growing, I am still not but just 3 years in. I am not at a COMPANY profit yet, so I CAN'T absorb the increased cost unless I want to give myself a pay cut. And as a business owner, why should I give MYSELF a pay cut because the government tells me I have to give a RAISE to my employees. Net result to me means that an increase in minimum wage will result in an increase in unemployment as people get let go to compensate.

 

champagne taste on a beer budget... that's where the problem is.

 

Was hoping to see you here as a real world example.

Another thing in particular to your final paragraph is..as you said, you as the owner shouldn't take a pay cut. Moreover, I would have to imagine you're already stretched thin to begin with so that a further cut may not even be an option for you.

 

Which makes no sense because labor costs are not 100% of overhead. I've run a small business - the paychecks weren't the only checks I wrote; rent, insurance, supplies, taxes, fees, loans, etc etc etc.

But let's leave that aside for a moment. The min wage (indeed, all wages) has been stagnant for 6 years, and yet prices for everything have gone up in the meantime.

If the only driver of inflation - as you surmise in your comment - is wage increases, and wages haven't increased, then how is it that prices for goods and services have continued to increase absent a real increase in wages ?

 

Think for a minute there. Labor is not the only cost that drives up prices. The stores have to buy their products from the distributor, the distributor from the farm or manufacturer. If the costs at the farm go up, be it utilities, average repair cost/replacement of farm equipment, then THEIR cost goes up. Same at the manufacturing level, if cost of materials go up, then their cost goes up. They won't absorb, so the distributor has to pay more. If distributor pays more, THEY won't absorb it, so they pass costs on to the store. Perfect example is beef. Right now beef prices are going higher and higher. Why? Because the drought over the past 2 years has made allowing the cattle to graze for food impossible. Farmers had to buy grain and such to feed the cattle. This increased their cost, and it trickles down to the consumer.

I'm not saying that labor cost is 100% of the overhead. You perhaps misunderstood me. When labor pay has to increase by 25%, then yes, labor COSTS go up by actually about 35% because your unemployment, and employee tax rates go up.

That is an important thing to also consider, that those who have never ran a business may not realize. Just because I PAY my employee $15 per hour does not mean it COSTS me $15 per hour. Right now my entry tech gets $12 per hour. With taxes and unemployment insurance, as well as shop insurance increases, Hiring him ACTUALLY costs me $22 per hour. Increase his pay to $15, and my cost rises from $22 per hour, to $30 per hour. (I just ran the numbers thru my accountant because I was curious)

 

It's good to hear small business owners' perspectives on this. But I caution everyone else to refrain from thinking all minimum wage earners are lazy. I've had the pleasure of knowing and working with many people who hold down multiple minimum wage jobs while also putting in 250 "sweat equity" hours to earn zero interest mortgages on Habitat for Humanity houses. I GUARANTEE these people work harder than 99% of you, I know they work a thousand times harder than me. These are people who had zero opportunity growing up, untimely health issues or the loss of their spouse, or a number of other obstacles beyond their control. Sure there are bad eggs out there but a handful of examples does not excuse the ethnic-cleansing like public policy that some of you are so quick to recommend.

To the business owners, I really hope you guys end up ok. But something has to be done about the growing income inequality in America, and this Seattle thing is just a social experiment to see if it could have any effect.

 

I'm glad I'm not the only one who thinks this way about people in minimum wage jobs. I've worked in retail for a while and I will say there are definitely some hard working people who have been with a certain company for years and should be given the opportunity for a better wage. It's very expensive to live in a big city and too many people are still in poverty (or close to it) because their company refuses to increase their pay.

Now on the other hand, I totally agree that a large hike will hurt small business owners who are (already) struggling to keep afloat as is.

I think that $12-13 range is more reasonable. But we will see how it goes since Sea-Tac has already implemented the 15/hr, so we'll see if Seattle decides to follow suit.

 

Agreed. This is what I laugh at in that article:

Pardon my language here, but I will try to make a basic point. This is what I have to say to her comment: "Miss Spear, since when did it become MY fucking job as a small business owner to be responsible for taking workers out of poverty??"


Look, I fully support the right for people to earn a fair living. But trying to put such a huge burden on the SMALL businesses, while allowing the large businesses to get all the good tax cuts and write offs is STUPID. It goes back to corporate America wanting to crush the little guy.

 

And I appreciate many of your guys input and critiques, much more so than the "sew your legs shut" comments. I'm glad people are legally disputing the Seattle law so that actual democracy can be carried out, and the issue will be resolved.

 

X100

I personally believe that if a person works a full time job, that should be enough to give them decent housing, necessities, and maybe even a beer or two. But it really is impossible for American (note: Actually American) businesses to compete with those that can manipulate tax loopholes, send jobs overseas, and still receive corporate subsidies (WELFARE) from the government.

I've said before I work at the Aspen private airport, and I'm just glad that I'll be on the frontlines when the revolution eventually comes

 

This. I worked for a small business as a building cleaner and my road manager figured that the rank and file guys like me cost about double what our pay was for those reasons.

 

While I do believe that one should be prudent about having children if money is an issue for them just as one should not buy a new car they can't afford, the solution is far more than "sew it shut". No bones about it.

 

No doubt. My wife's agency employs a good amount of people from other countries who specifically came here to work..and these people work tirelessly in a very overlooked if not ignored profession and also work at least part time elsewhere just to have the basics in life.

 

I just want to live long enough to be in the Revolution ..This one will make the civil war look like a girl scout cookie sale..

 

Obama originally wanted 10 dollars per hour nationally. Ever heard that saying "give a mouse a cookie, and he'll want a glass of milk"...

 

I have no problem with current cost of living rates to have a $10 per hour minimum wage. Sure it won't give a person lifelong financial freedom, but it is still an acceptable pay for minimum wage workers. If you want better pay than that, get yourself a skill.

 

If you make the min. 15 dollars per hour, very soon people will say that isn't enough, I'm only making the minimum wage you need to give me more. People...

 

Who is it that you guys are hoping to get to kill? I'm sure there's a little humour intended there but it reminds me too much of the shit that retard in Moncton was talking about before ambushing 5 police officers in Moncton, New Brunswick this week, killing three of them.