Building an Economy that Works for Everyone

Two invisible – but very real – opponents of Seattle’s $15 minimum wage

paycheckHyperbole and fear are behind much of the opposition to the minimum wage. They need to be dealt with differently.

When Seattle’s paid sick days law was first proposed, some opponents reacted by saying things like this:

“A majority of businesses are telling me that they’re considering moving out of the city [if this legislation passes],” says Black when reached by phone today. He adds that “I think it’s possible” downtown could become a ghost town.” ~David Black, July 6, 2011

In hindsight — with paid sick days the law, and businesses doing just fine — it’s apparent that was either hyperbole or fear talking, or maybe both. It’s also apparent that while those are understandable responses to (what seem like) a big change in the way we all do business as a community, such claims and fears were unfounded.

Multiple studies have debunked dire predictions from political opponents about paid sick days laws. What’s more, Seattle grew faster than any other major American city last year, according to population estimates released Thursday by the Census Bureau. And the city didn’t just surpass other big U.S. cities — for the second consecutive year, Seattle outpaced its suburbs, and the new census data show this trend is accelerating.

Now the Seattle City Council is debating legislation to phase in a $15 minimum wage for all workers in Seattle. Large businesses would reach a $15 minimum wage more quickly, while small businesses would have a longer phase-in period, providing time to steadily realize the benefits of increased consumer demand. (Seattle residents are 3 to 1 in favor.)

And just like the paid sick days debate, there’s both hyperbole…:

“Employment for low-skilled workers tends to decline when the minimum wage is raised. There is little or no relation between an increased minimum wage and economic growth.” ~Erin Shannon, Washington Policy Center, October 2013

…and fear at work:

“I did remember panic coming over me. I’m like, what are people talking about?” she said. ~Hazel Roos, Owner, Paint Away, May 2014

Deflating the hyperbole is (relatively) easy, given there’s lots of data to support the premise that raising the minimum wage is a net positive for worker income, business activity and the economy overall. CNNMoney recently analyzed figures from payroll processor Paychex and found that “in Washington state, small businesses are adding jobs faster than any other state in the country… It’s also the state where minimum wage, at $9.32 per hour, is the highest.”

But fear is a different matter, because in some ways it is impervious to facts and figures. To deal with that, we need to listen to people who have overcome that fear — people like Makini Howell, owner of Plum Restaurants in Seattle and a leader with the Main Street Alliance:

“Raising the minimum wage and establishing paid sick days standards are economy-boosting policies. I expanded my business and created more jobs after Seattle’s paid sick days law went into effect. I’ll do the same after we pass the Mayor’s $15 minimum wage plan. No, Chicken Little, the sky is not falling. The economy grows from the bottom up, not the top down.”

Makini has her finger on an important point. A poverty-generating business (one that pays its workers too little to live on) actually depends on other businesses that *do* pay workers a living wage for customers.

Think about what would happen if every business paid their employees poverty-level wages: our economy would dry up and blow away, because people would have so little money in their pockets. (Poverty-generating businesses are also subsidized by tax dollars, but that’s another story.)

Now imagine what would happen if every business owner instead paid their employees a living wage: customers with money to spend would mean businesses could really thrive. And that would be step down the path toward greater economic security and certainty for all of us.

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