Building an Economy that Works for Everyone

A sad and foolish fight against the minimum wage boogeyman in Washington

File this one under “the more things change, the more they don’t.”

In January 2007,  New York Times reporter Tim Egan traveled to Liberty Lake, Washington, which is located about 8 miles away from another small town, Post Falls, Idaho. Egan wanted to find out whether Washington businesses faced any difficulty dealing with a minimum wage $3.00/hour higher than those across the state line.

The answer? Nope:

“We’re paying the highest wage we’ve ever had to pay, and our business is still up more than 11 percent over last year,” said Tom Singleton, who manages a Papa Murphy’s takeout pizza store here, with 13 employees.

His store is flooded with job applicants from Idaho, Mr. Singleton said. Like other business managers in Washington, he said he had less turnover because the jobs paid more.

Egan goes on to write that despite claims made by the Washington Restaurant Association and other traditionally low-wage employers, several studies concluded that modest changes in the minimum wage have little effect on employment.

Fast forward to December 2010 and a slumping economy. Shawn Vestal, a reporter for the Spokane Spokesman-Review, pays a visit to Floyd Brown to ask him whether an increase in the minimum wage will have an effect on his business. Brown has owned the Thrifty Scotsman, a Spokane Valley hamburger institution, for over 30 years. Here’s what he had to say about it:

“I don’t disagree with it going up,” [Brown] said about Washington’s minimum wage, which is set to rise to $8.67 an hour in January. “We try to keep everybody on full time and give them a good wage so we don’t have turnover.”

And business has been good and steady – the burgers and tater tots are flying – even with some pain from the recession, he says.

Vestal, like Egan, also notes that evidence is piling up to show a strong minimum wage has no effect on employment:

A trio of researchers has just published a nationwide study comparing all neighboring counties with different minimum wages – like Spokane and Kootenai – over a 16-year period. …[It] concludes that the disemployment effect is zero-ish. Not small. Not minor. Just not there.

So on the one hand you’ve got businesses like The Thrifty Scotsman, Papa John’s, Costco and Trader Joe’s, which recognize that investing in employees means better staff and higher profits — and a growing body of research that pretty conclusively demonstrates increases in the minimum wage has no effect on employment.

And on the other hand, you’ve got the Washington Restaurant Association, which is still pedaling its usual “profit before people” soundbites to anyone who will listen, and this guy, who apparently believes a strong minimum wage increases incarceration rates among black youth. Neither cites an iota of recent or reliable peer-reviewed research to back up their claims.

This is what makes the recent lawsuit against Washington’s minimum wage by a group of agricultural, restaurant and retail business associations so sad and foolish: they’re actually spending money on a court case that – if they win – will actually end up costing their own businesses (and those of their members) even more money in the long run. And regardless of the verdict, they’re spending resources on an ideological fight, when they could be actually building their businesses.

What a shame.

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