The $15 per hour minimum wage experiment comes to SeaTac
Let’s see how this goes during the next two to three years shall we? It’s not a done deal, but SeaTac Proposition 1 looks like it will pass, requiring businesses to pay hospitality and transportation workers a minimum wage of $15 per hour. The previous minimum wage was $9.19, but I’m not sure what the average pay was for an entry-level employee.
Businesses will also have to provide paid sick leave. SeaTac, Wash. is a 10 square mile area including the international airport and surrounding areas to the west of I-5. The population is about 27,000 and the current unemployment rate is 6 percent. The state’s current unemployment rate is 6.8 percent.
A small business with 15 employees working a 40 hour week at $10 per hour had a payroll of $6,000 per week. If the owner or management makes no changes, payroll costs will make a huge jump to $9,000 per week, that’s a 50 percent increase, and that does not include the cost of paid sick leave. Where do people think businesses will come up with this extra 50 percent to cover payroll costs? Owners and management have three options.
- Raise the price of services or goods.
- Cut their own pay.
- Reduce the payroll.
In reality, businesses will do a combination of all three, but tell me how this will help employees currently making minimum wage? To a certain extent, SeaTac has a captive audience since some of the businesses are within an airport and people do like the convenience of staying near the airport when they are flying in and out. I’ve stayed in the exact area that will be effected in the past, and I’ll be damned if I’m going to pay a higher price for a hotel room that has grouchy managers and owners who can’t afford the staff to keep the place clean.
I’ve been looking for some good data sets specifically for the SeaTac area and having a tough time doing so. The numbers exist. If this goes through, SeaTac needs to be completely honest and answer the following questions.
- How many jobs – as of today – are in the area that would be effected by the new rules?
- Two years from now how many of those jobs remain? Are there more or less jobs?
- What is the current unemployment percentage – specific to SeaTac – for the 16 to 24-year-old age group? Break out those percentages by male, female, white, black, hispanic, asian and other race groups.
- Two years from now, what is the unemployment percentage for those same groups?
- What were the total gross sales and net revenues of the businesses effected by the new rules in 2013?
- What are the gross sales and net revenue numbers two years from now?
- What is the percentage of families living under the poverty line in SeaTac in 2013?
- What is the percentage of families living under the poverty line two years from now?
Hat tip to Jim Hoft at Gateway Pundit.
2 Comments
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Why $15 per hour? Why not some other nice number? What will magically happen if employees are making that amount per hour?
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It is wonderful that these government types waltz in and agree with the unions on a particular wage. Advice from people who never worked in a private business, had to make a payroll, hire or, er, let go, employees, arrange financing for the business, or any of the thousands of things that go into making a business successful. Isn’t this backwards? Businesses should be setting their own wages. Workers decide if they want to work at a business.
This isn’t forced labor or indentured servitude. It is work; not all work is equal. The market place that should decide these things.
You know, this minimum wage thing is a holdover from the New Deal and the social equality movement of the 30s. And, unions.
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What’s remarkable is how this rhetoric resonates with regular folk who seem either unable or unwilling to comprehend the economic and unemployment implicati0ns of mandating such a pay scale- something I doubt is lost on the progressive promoting it.? They are likely salivating at the delicious crisis that would be created- causing demand for the next item in their Socialist agenda.