Broadway biz owners send message on $15 minimum wage: Don’t do it — UPDATE

A group of Capitol Hill merchants has spoken in unison about the potential for a $15 minimum wage in Seattle — Mayor Murray, don’t do it.

The Broadway Business Owners Association has sent a letter telling Ed Murray they oppose his support of a $15 minimum wage in Seattle.

The group says its letter’s signee roster including the owners of Julia’s, Panache Clothing, Olivar and others “unanimously opposes a $15 minimum wage increase” and “respectfully requests the city to consider exemption of small businesses.” The full statement and list of participating merchants is below. UPDATE 1/17/14 6:53 AM: One listed owner, Sujan Sharma, of Annapurna Cafe, said he did not authorize his business to be listed following the meeting with the group he attended recently. We are contacting the other businesses listed to confirm their participation in the meeting. UPDATE 1/17/14 1:25 PM: Panache’s Carl Madeiros also says he did not authorize meeting organizer Charlette LeFevre to include his business in the roster. He says he sees the issue two ways:

Yes, … I agree with the minimum wage increase if this will help people in our state.
No, …..if this will only increase unemployment and create less jobs

The letter was sent to local media and public officials from the group’s official notification email address that has been used for distributing information about events including the Broadway Pride Festival.

UPDATE 1/17/14 2:10 PM: Julia’s Karsten Betd says he also didn’t approve the letter and offered up his thoughts on the issue as a Broadway business owner:

As some other business owners mentioned this letter was [sent] without our approval on the content of the letter, and Julia’s owners don’t agree with all of its content.

I/we strongly agree with the current min wage law in Wa state, which increases yearly by the consumer price index.

All our employees at Julia’s get paid more already, the floor staff earns an average of $15-25 an hour in addition to the current min wage.

Our kitchen staff gets paid higher wages than the current min wage depending on their skill level as well.

If a mandatory $15 an hour wage would kick in we would have to raise prices accordingly, most likely cut our work force, and  trim hours of operation, making it even more difficult to be profitable, maybe even close our business.

Wages should go up gradually each year and not jump up by over 60%, it doesn’t make any sense it would create much higher cost of living expense in Seattle, and not benefitting the min wage employee at all. It would be dangerous gamble if all of a sudden we increase gas by 60% or food etc We just don’t know what would happen to our economy if that would happen.

Of course Olympia and cities would see a big hike in sales tax collected.

Instead we should focus on better schools and colleges and better education, leading to a more qualified and higher paid workforce. And leave the entry level jobs with the min wage for young people, students, part timers etc.

The letter puts the group in opposition with supporters of new Seattle City Council member Kshama Sawant who has called for a move to an unconditional $15 minimum wage in the city. The push and others like it could be troublesome for Murray who has tried to strike a supportive tone about a higher minimum wage. CHS reported on Murray’s efforts to move the city’s minimum wage higher and the challenges and opportunities in his first term here.

The letter is also a risky move for the signing business owners as the issue has received mostly popular support in the neighborhood and beyond. Others have shown more progressive tact. Late in 2012, CHS reported on questions and suggestions from some of the leaders of the Hill’s food and drink economy about raising the minimum wage to heights more appropriate to supporting a good life in Seattle.

471410_189124201216732_278192784_oThe BBOA is a grassroots business group formed in recent years out of frustration with the larger Capitol Hill Chamber of Commerce and the challenges of operating on a construction-choked Broadway.

Chamber director Michael Wells is a member of Murray’s minimum wage advisory group and the Broadway Business Improvement Area that the Chamber administrates is preparing for expansion. Full disclosure: The Capitol Hill Chamber is a CHS advertiser.

Here is the full statement from the BBOA group. You can learn more about the group on the BBOA Facebook page.

Dear Mayor Murray and Committee,

BBOA, the Broadway Business Owners Association on Capitol Hill, an association that represents one of Seattle’s largest corridor of small businesses unanimously opposes a $15 minimum wage increase and respectfully requests the city to consider exemption of small businesses.

Wheras a 60% increase in employee wages would create an extreme hardship and in some cases closure of small business owners and family operated businesses whos profit margin if barely is in the 2-5% margin range and is already strained due to operation size and the economy.

Whereas small business owners assert the right to regulate their own employees raises based on merit in conjunction with the present minimum wage.

Whereas BBOA business owner assert there is already an existing fair minimum wage and stand by the 1998 voter approved initiative that already ties the minimum wage to the Consumer Price Index which measures inflation.

Sincerely,
Karsten Betd and Eladio Preciado, Owner Julias Restaurant
Carl Medeiros, Owner Panache Clothing
Angel Theurer, Owner Metro Clothing
Philippe Thomelin, Owner and Chef Olivar Restaurant
Sujan Sharma, Owner Annapurna Cafe (CHS Note: Sharma has contacted CHS and said he did not authorize his inclusion in this letter)
Faustino Lopez, General Manager Perfect Copy and Print
Charlette LeFevre and Philip Lipson, Directors Northwest Museum of Legends and Lore
Niz Marar, Owner Wild West Trading Co., 4 retail stores – Red Light Vintage and Aprie Women’s Clothing.
Nikki Page, Owner Scream Salon
Jim Brown, Owner The UPS Store
Jeffrey Wilson , Owner and Chef Americana
Steven Lien , Owner underU4men
Rion Haber, General Manager Q Nightclub

Additional business comments:
“If the $15 minimum wage is enacted, we would go out of business immediately and all our 25 permanent staff (up to 50 seasonally) will be out of a job. It’s that simple.”
Niz Marar, owner Wild West Trading Co., 4 retail stores – Red Light Vintage and Aprie Women’s Clothing.

“Scream has been in business since 1998, I have been employed at Scream Salon for almost a decade and owner for almost two years. With that said I can’t fathom an hourly increase this high! It would wreck us and I have to say it would wreck many of my small business neighbors! It’s a nice thought that one day we could have a better min.wage… but we also need to cap off what is being charged for housing in our area. These two things are going hand in hand on the hill. I’m very nervous about this whole thing!! – Nikki Page of Scream Salon

My competitors are web-based retailers based outside to the city of Seattle. A change to $15 per hours is a competitive disadvantage that cannot be overcome. I do not have the ability to raise prices to cover this type of increase. – Steven Lien, underU4men | Capitol Hill

UPDATE 1/17/14 9:30 AM: We asked Faustino Lopez about why he decided to include his business in the association’s letter. Here is what the copy shop owner told CHS:

A minimum wage increase in not what we oppose, what we oppose is a $15.00 an hour increase it is illogical.
People also need to realize the employer is not just paying the $15.00 they are also paying taxes, insurance and matching social security, so a $15.00 employee is realistically $18-20 per hour.

I am not worried we have always paid our employes well and above the minimum wage which is warranted with the education and knowledge in the field. I leave you with an article that sums up this unrealistic, uneducated approach to economics.

We’ve been told some of the participating businesses are beginning to see backlash in online review sites like Yelp though we’ve also been told of a few examples of support for the businesses listed in the letter.

CHS has attempted to contact all businesses listed in the letter but if we didn’t reach you and you’d like to tell us more about the situation, please email us at chs@capitolhillseattle.com or call/txt (206) 399-5959.

UPDATE: Under U 4 Men’s Steve Lien sent us a lengthy response to our questions about the letter:

Here’s another response from Q nightclub’s Rion Haber:

While we recognize that living wage issues are a very important aspect of the larger conversation on how to improve standard of living for all Seattle residents, creating an overnight rise of roughly 40% in labor expenses is like trying to kill a mosquito with a hand grenade. You are likely not going to hit the mosquito and you are going to create a lot of collateral damage in the mean time.

The most difficult part to swallow about all of this is that the people it’s most adversely going to affect are the ones the raise actually applies to; low income earners who live paycheck to paycheck and tend to purchase from other discount based businesses, which will now have to raise their prices to accommodate for their drastically increased labor expenses.

In terms of a potential reduction in business, I am much more afraid of the lost business that will occur from the venue having to raise it’s prices to compensate for these changes than the business taking a stand against a popularly unsound fiscal initiative. While everyone agrees that we want Seattle to be a livable city with lots of diversity, perhaps we should encourage small businesses to be a part of that larger quality of life conversation rather than a victim of it.

175 thoughts on “Broadway biz owners send message on $15 minimum wage: Don’t do it — UPDATE

  1. One of these owners lives in Portland, if he doesn’t own a second home locally (Steven Lien).

    Another owns an $850k home in Green Lake, next to the lake. (Niz Marar)

    My sympathy is a little lacking while their workers struggle to live in 4 person apartments.

    • Yeah, what nerve of these local business owners, creating jobs and contributing to the tax base and being concerned about political movements that might impact their ability to remain in business.

      The $15/hour crowd might do well to consider that the only businesses that can afford to swallow that increase without raising prices, laying off staff or shutting down are national chains and Internet retailers.

      • Nobody is claiming that they won’t raise prices. Some businesses will have to, and thats fine. I will happily pay more for my dinner so that the people preparing it can afford theirs. We go through this every time there is even a small increase in the minimum wage, but in the end the sky does not fall.

        It would make sense to do this gradually, though, with maybe anual increases over a few years.

      • ‘Job creator’ rhetoric is another version of trickle down, supply side economics – the idea that in order to REALLY help the working class, we need to provide all kinds of corporate welfare for the capitalist class.

        Call me crazy, but I think it just might help if we put a few pro-worker laws on the books.

        • Michael:

          “Job creator rhetoric” and “supply side economics” “corporate welfare.” Have you ever run a small business? Ever had to pay B&O tax on your revenue even when you incurred a loss? Spent nights unable to sleep as panic ran from your toes up to your head, your hands go numb, and your heart races for fear of going under? Ever feared about the drop in business and laying people off and what that will mean to them and their small children– what that will mean to you and your small children? Or gotten slapped with a huge fine from the SSA because you failed to file that extra 13% on wages on time? How about have you had to think about how to afford that extra $3/hour for workers comp when your clients might opt to go with an unlicensed/uninsured contractor instead who doesn’t have to pay liability insurance and workers comp and all the other regulations because s/he does it all under the table? Have you ever realized that many business operate “in the shadows” and pay wages under the table because they simply couldn’t afford to stay afloat otherwise… but they still do it, because hey it’s a job and a livelihood. It’s “job creation.” More “laws for workers”– how about the 14 labor laws I’m supposed to post on every jobsite? And the five taxes I pay at least every quarter if not every month (state, city, unemployment, workers comp, FICA) to support the many priorities to make life better for me and my workers? Ever had to stay up till 1 am every night of the week to do the bookkeeping/HR work/marketing, and then get up at 7 to go actually “conduct business”? Ever been responsible for collecting and reporting someone else’s child support and told that if you failed to read through the 15 pages of paperwork and fill it out, and if you took action against the employee, you would be sued? But your compensation for doing the 15 pages plus withholding plus reporting is less than a one time $5 “credit.” How about signing your workers up for health care? And having the 75% of premiums you pay on their behalf go up 30% after the ACA act, and then discovering you had to pay an extra tax and fee per subscriber, amounting to over $100/mo in additional fees? And managing the administration of all of that?

          If I ever actually see “corporate welfare” (what is that? who gets it? Not us!) or “trickle down economics” (what I see are mainly hypocritical rhetoric of raise taxes and then people skirting taxes when it comes to their own business affairs) or “supply side economics” (does that mean as a supplier of goods and work, I’m somehow getting some cash from the government? It’s quite the opposite), I will join arms with you.

          But right now I see a lot of corporate workers– acclimated to the gentle shade of a behemoth and jealous of its architects– casting down judgments on those who live in the real world– the way it has been since time began. It’s a hard knocks life, and anyone who tells you otherwise is selling something. Our workers and we know that.

          If someone has somehow managed to grow something out of a small business where they can afford a Seattle-area house (not us… we had to move out), I don’t begrudge them. I call it a miracle. And good for them that they managed to make some jobs for others, as well.

          • I can answer that one easy….No, he doesn’t…..and IF he ever does….and IF he ever acquires the skills (big if) he too, will understand why this is so, so stupid and nothing more than FEEL GOOD FLUFF.

            Oh, that soap opera about paying more dinner so those that work there can afford theirs…..please, first of all they have MORE than enough to eat, you can eat for free at most restaurants (or you USED to be able), but you will be paying for LOTS of other things..

            PS: i got to tell you, as a small biz owner, i kind of find the request in the letter for a small biz exception a bit not cool. This is wrong period…..whether or not the company is big enough to pay for it or not……..they kind of are sounding like the people who are all fuzzy about this law…its ok, because the money is someone ELSES.

      • You are correct. Unless you own a small business, people will never understand that every business does not make a lot of money. Most small businesses fail within the first couple of years. Basic economics will tell you jumps like that would put those businesses having to pay around the minimum wage out of business.

      • It completely is the point. These people are wealthy because they do not pay living wages, exploiting their employees while paying as little as legally possible. And now opposing people crying foul.

        • Having worked in the biz for many years I can tell you that the restaurants on Cap Hill pay far higher wages than your typical ethnic restaurant in Seattle. I know that will burst your liberal world view bubble.

        • Really, all these small business owners on the Hill are wealthy? What’s your definition of “wealthy”? I guarantee you that the wealthiest citizens of Seattle and environs are NOT small business owners on the Hill. And these small business owners are “exploiters”? What? The small business owners of the Hill are scraping by – the recession killed off many of them. These are not Citibank/JP Morgan Chase/BofA executives. Get a grip, dude. And some perspective.

          • To the $15Now folks, anyone who can buy a house is filthy rich and the enemy. Except Sawant, who is married to a Microsoft millionaire and comes from a wealthy family in India who paid for her PhD in the States.

          • I dunno. Owning two homes, both over $500k, is pretty wealthy. Owning an $850k home is pretty wealthy. Or, a $1.5m home. These are not the home values of people “just scraping by.”

          • You got yours: Are you aware of what a house costs in Seattle? Just because someone’s property is valued at $500K or greater in King County records does not make them “wealthy”, and does not mean they own the property outright. They could have purchased their home years ago, before property skyrocketed. They could be mired in debt for this purchase. They could have a 30-year mortgage, paying the bare minimum, with no hope of ever actually having true outright ownership of their house. Also, the higher the “value” of your house, the more you pay in property taxes. I know many people who own $500K or greater houses who are basically working stooges, paying the minimum towards their mortgatge, and trying to save something for retirement. These are not “wealthy” people, exploiting the working class.

        • Most restaurant workers make minimum wage plus tips.
          Tip credit is not allowed in the state of Washington. Even in small cafes, those servers are making at least $18 per hour with tips.

          • Exactly!! I can tell you that of all the MANY bartenders and servers I know, NONE earns less than $30 p/h. But no tip credit towards wages?

          • remember when servers used to say that they DESERVED the tips because they made so little money?? Unless the law states otherwise….you can expect for those tips to get smaller and smaller….and they will end up making LESS in the long run….

            and then the tears start….

    • You go Irene. Stick it to the man! You’ll show these bourgeois pigs what it means to go against the awesome might of Sawant.

  2. Olivar Restaurant’s are you serious? You charge so goddamn much for your food and you’re too cheap to cover $15/hr for your cooks/servers? Wow.

    • Understand how restaurants work. Most restaurant workers have incomes over $15. But their wage is under that. Front of house servers and bartenders usually get minimum wage, plus anywhere from $15 – $50 and hour in additional tips. Bussers, cooks, etc, usually share in some tips as well, adding an additional $1 – $4 per hour to their income. Add to that benefits like meals, drinks, health insurance, 401k, and education benefits depending on how successful the restaurant is.

      Restaurants are labor intensive, with labor costs being about 30-45% of their income. And the typical successful restaurant has about an 8-12% profit margin at best. Raising the minimum wage by 62% will completely eat up profits. But it’s not just Labor that will increase. Locally made goods will be more expensive, and distributors will also have to raise prices. So on top of the cost of labor skyrocketing, they’ll see an additional rise in the cost of goods.

      We can mitigate the issues here by counting total compensation and phasing in the wage increase over time.

      • PS – keep in mind that opening a restaurant take anywhere from $300,000 – $1 million easy. Often times much more. To pay that off takes years before a profit is made. These small business owners are the bad guys. They have a ton at risk and work incredibly long hours and risk everything to follow their dreams. Let’s not beat them up because they are concerned about a simplistic reactionary solution to a complex problem.

        • I’m sure you live in a nice big fat house Dave meinert and in sure you’re able to do that because you and so many others have business models that rely upon cheap labor which is wrong. Nobody should make any kind of profit while people who are working to create that profit especially bussers and dishwashers are not being paid a living wage as in a wage that allows you to actually afford rent, not even able to buy a house or get ahead, but to just be able to pay the bills without state assistance. Your business model is stupid and completely in line with serving a white wealthy elite (as in restaurant owners and their investors). We need more jobs that actually utilize people’s skills and college degrees. I wonder how many restaurant employees have college degrees and work in restaurant jobs because they can’t find s job in their field? You and your restaurants can go to hell or just raise your prices!! Your shitty food at Lost Lake could be more expensive and I’m sure all the drunk idiots who eat there wouldn’t even notice.

          • Rachel – do you know what jobs at restaurants pay? I’ll give an example – a starting dishwasher at The 5 Point makes $10.50 per hour, plus $2-$3 per hour in tips, plus meals and drinks, and after 3 months gets a raise, health insurance, and a 401k plan which after 6 months includes matching contributions and profit share. Raises are made regularly and go up to $12.40 for that position.With tips and benefits the lowest paid position makes well over $15 an hour. Other more successful restaurants like Tom Douglass’s or Anthony’s do even more. I agree that $9.32 (the current minimum wage isn’t enough).

            Restaurant owners are not the white elite as you call them. Go to the ID. Go to restaurants on the Hill like Plum or Ballet. Small business vary in every way.

            I agree we need more jobs that people with college degrees can get in their field. In fact, we need more people with college degrees. I agree with you.

            As for raising prices – if small businesses could just raise prices the 20-30% it would take to cover their cost increases that will happen under the $15Now solution, that would be fine. But keep in mind it’s not just restaurants that will do that. It’s grocery stores, gas stations, clothing stores, etc, etc. For the poor in Seattle without jobs, they will become poorer. For those making over $30,000 per year, they will feel the price rises pretty hard as well. And of course for the social service providers and other non-profits, they will have to cut services.

            I like that we are having this conversation. It’s past due. But let’s be smart about it.

          • Dave, thank you for a dose of reality and fact-based comments, as opposed to Rachel’s simplistic tirade about a “living wage.” It seems to me that what you are paying your dishwashers is very fair, given their level of education and skills.

            In your previous comment, didn’t you mean to say: “These small business owners are NOT the bad guys.”?

          • I agree that since this state makes employees count tips as wages and their tips are taxed as wages that this should be classified differently, however not everyone in minimum wage paying jobs in the city of Seattle have the opportunity to take in tips. Have you tried to live in Seattle on $9.32/hour lately?? Especially with all of the houses that once provided affordable housing being torn down… In any case, something will still have to be done on the topic of rents sky rocketing, maybe you should be championing that effort Dave instead of trying to keep people’s wages low. Individuals and business owners alike need affordable rent to survive!! Why don’t you use your political pull for something incredibly useful to the neighborhood that has been so good to support all of your businesses over the years. Heck, I would side with you if you took on those kinds of issues! And I’m sure everyone on this comment thread would too!

          • ” Have you tried to live in Seattle on $9.32/hour lately?”

            You could easily move to Seatac or Tukwilla and take the super convenient Light Rail into town, could you not?

          • ” In any case, something will still have to be done on the topic of rents sky rocketing”

            When you boost wages 62% what do you think will happen to rents?

          • “Seatac and Tukwila are not cool. How are they going to tell their friends they live in such uncool places?”

            Exactly. This is the problem for these hipsters, they think they have a right to live on Cap Hill and god forbid they move to neighborhoods where actually minorities live, affordable places like Tukwila or Seatac, just an easy Light Rail ride away.

          • Rachel, the answer is really quite simple. The working people should unite and form cooperatives and open small businesses, operated under the principles of democratic workers’ rule. They can therefore state their own rules (i.e. $15/hour or whatever wage, benefits, etc.) The principle could be: From each according to their ability, to each according to their needs. Each working person in the cooperative contributes and benefits equally. This way there are no exploiters, no exploited, and every participant shares in the outcome. So, get working on it. Start organizing and uniting the working people into cooperatives (a very obvious solution) instead of complaining on a web site, and start making a difference. Or, get an idea, organize your own cooperative, and start a business that is fair and equal to all involved. Fair wages, fair prices, fair principles. Now get to it!

          • Dave, if I understand you, you’re suggesting that we could cover the cost of raising wages 60% with just 20-30% increase in retail prices.

            Elsewhere, someone pseudonymously claiming to be a small business owner told me that labor amounts to 30% of that business’ sales volume. So a $10 item there includes $3 of labor. Rounding the current wage up to $10/hour, we’d be facing an increase of 50% to bump it up to $15/hr. That wage increase would raise the labor cost of the $10 item from $3.00 to $4.50, resulting in a 15% increase to the retail price.

            If we can increase the minimum wage here to $15 with the cost of that completely absorbed by bumping McD’s 99-cent menu to a $1.14 menu–no layoffs, no decrease in profit for owners, just a 15% increase for consumers–I’m all for it. If some of that cost can come out of, say, landlords’ rent, it sounds even better.

          • Phil Mocek: you do understand how rental property works, right? Owners charge the amount they think the unit will rent for,and to cover their own expenses (mortgage property tax, replacing applicants/hot water heaters/sewage linkup, even landscaping). If many people suddenly have a wage hike to $15/hour minimum, the landlords and property owners are going to jack up rent. They are not running a charity here,

          • Perhaps people should not be thinking that their humanities degree will get them a job.

            Also the fact that Sawant is an Economics Professor speaks volumes about the value of a degree at our higher learning institutions.

          • Rachel, the government like Dave. He gives them a lot of money. The employees like him, he pays more than a fair wage. That is the point. It is just not an easy solution to raise the minimum wage for all. It has negative consequences for a lot of people as well.

      • Oh please. Don’t try and frame this like “this is just how the restaurant industry works”.

        Child labor was “just how things worked” before we outlawed it. Did businesses see their profit margins decrease? Yes, they did but somehow we as a society survived.

        I would gladly pay increased prices if it meant I was not complicit in failing to provide a living wage.

        • “This is how this in the industry works”. Its because the culture of tipping. The prices are set with the presumption that people will tip 15-25% if not more. If owners were able to charge more and eliminate the tipping part, than workers could be paid MORE than $15pr/hr and everyone would win. But make no mistake, tips are part of wages. The only issue I can see is weather or not the city would recognize that under a new law.

      • That seems the most REASONABLE solution. It’s easy for people to forget that there is a culture of tipping in America. This means that the prices can be lower on the menu. Outside of eliminating that custom, prices remain. If you eliminate tips and ad the 20% to the menu item cost as they do in say Australia, you could EASILY pay $15 p/h .
        BTW is it lost on everyone that almost ALL of the adverts that pay to keep this site and “The Stranger” are paid for by small often restaurant or bar business’s ? Where do they reckon the revenue would come from to pay for those adds if said small biz hasn’t the money to buy space?

        • Yeah……all these moralist people cant stand to see the builder of a company have a great house and possesions, but see NOTHING wrong with the unemployed having a 75 inch screen….yeah, that makes sense.

          Or, since we’re all such experts here when it comes to the food service industry. Again where the shouts of UNFAIR when people who can barely read or write, have never seen an addiction they can resist and are making 50 bucks an hour serving meals or drinks, lots with no education, have failed in every other pursuit in life….yeah, that makes it ok to make grand a week, half (at least) that they don’t claim on their taxes….but thats ok, cause they are employees, not employers, right.

          And anyone who works in the food service industry knows EVERYTHING is said is true.

  3. It’s brave for these small business owners to enter this argument. Many of these people have their life savings, their homes, and their jobs at risk if we do this wrong in Seattle. And so do their staffs. As a community, these businesses are part of the soul of our neighborhood. We need to listen and learn from them.

    At the same time we need to realize that the minimum wage in the US, Washington and Seattle has not kept up with the cost of living and needs to be increased.

    We have choices here. The choice isn’t between just a simplistic $15 immediate across the board minimum wage for all businesses or nothing. There are many elements a solution can have.

    This year in Washington DC workers rights advocates and Labor Unions put forward living wage legislation called the Large Retailer Accountability Act. In it they proposed the minimum wage should be based on the idea of total compensation – which would include health care costs, retirement contributions, education contributions, transportation, etc (and could include tips, commissions, bonuses, etc). It wasn’t so much about living ‘wage’, as guaranteed living ‘income’. The Act also applied just to business with over 75,000 square feet of retail space in DC, and over $1 Billion in gross revenue. And it included a decreased wage for the first 90 days when an employee is trained.

    These ideas – different minimum wage for different sizes of business, total compensation, training wage – pushed by living wage advocates and Labor, are good principles to include in Seattle’s solution.

    We also need to address the unintended consequences of raising the minimum wage so much so quickly. One big issue is how non-profits will be effected. The City and County contract with many non-profits and social service providers who don’t pay $15. If they all have to go to $15 immediately, given the City and County budgets, it will mean services will have to be cut. Other non profits take people off the street, employ them, and get them back into the workforce. Those people start at minimum wage. Fewer of these people will be brought back into the workforce.

    We will also have to address what happens with childcare. Raising the wages of the support staff at childcare businesses is great. But it means those childcare businesses will need to raise prices. Families can’t just magically come up with more money to pay more for childcare, especially families at the lower end of the income scale who already live on incredibly tight budgets.

    And while raising minimum wages is great for those with jobs, most people living in poverty in Seattle don’t have jobs. Raising the minimum wage 62% immediately will result in sharp price increases. This means those not working will have less buying power and as a result will be even worse off.

    Another unintended consequence is that many working families get government assistance, and all those programs have limits on how much someone can make in order to get the benefits. By raising wages without raising the lower limits of these programs, poor families will lose important benefits.

    None of these things mean we shouldn’t raise the minimum wage. They do mean we need to think hard about how we do it and how we mitigate the unintended consequences. It’s more than fair for small business owners to be scared. Their cost of labor will increase, but so will their cost of goods, as local suppliers and distributors will also have to raise prices. This is real, not some hyperbolic crap.

    So let’s be prudent here. $15 Now is a nice marketing slogan. And it is trying to address a real problem, actually several. But as the these problems are complex, so are the solutions.

    Finally, I have to say to my fellow business owners – we can’t just stick our heads in the sand and say “no”. Businesses have been part of the problem of inequality, and any real solution is going to result in some pain. We can’t say no to tax increases while asking for more services. We can’t say no to a statewide income tax and deprive our state of funding for education, and then say the solution to income inequality is education not a higher minimum wage. We have to be part of the solution. This conversation can be a chance to bring progressive activists together with progressive business people to find real solutions. In the meantime, let’s keep open minds, and not vilify anyone.

    • I dunno what I would call people with million dollar homes who are standing against living wages, but I don’t think Brave actually fits that group.

      It’s not that brave to stand up against the working poor.

      • I can’t speak for Mr. Meinart because I have no idea what his house looks like, but I’d be willing to bet that most small business owners are not living in anything close to a million dollar home.

        • But that doesn’t fit the “us vs. them” narrative created by Adbusters, the SEIU, and the Socialist Alternative party. We’re supposed to imagine all business owners as being bourgeois villains living unbelievably luxurious lives off the backs of the proletariat. This narrative is so much simpler than reality and makes us feel self-righteous.

      • Yougotyours
        I think what Mr. Meinert means is brave speaking out in their own name rather that anonymously on a blog using a pseudonym….

    • Dave, how’s that campaign contribution and public endorsement of Murray going for you? I see it got you a seat on his private commission where you can discuss how much to raise our wages (or not) away from the prying eyes of us peons. That seems to have paid off for you.

      Let me restate your argument for you: You are saying that you can’t pay your workers a living wage. Much of your argument relies on you already paying your employees only the absolute minimum wage. You say that employees should, in effect, have to pay for their own sick days, retirement contributions, health care, transportation, etc. by counting these traditional employer expenses instead against the employee’s wages for the purpose of setting a minimum wage.

      A lowered three month training wage? You and I both know that the employee turnover rate for restaurants is very high. What you are saying here – again – is that YOU want an exception that favors YOUR businesses, exactly like you did with the city’s sick leave legislation. How transparent.

      And waitstaff and dishwashers need three months of training? And people shouldn’t be paid a living wage in those three months?

      I don’t need to vilify you. You’re twirling your own mustache.

      • You’re twisting his words. You said this:

        “You are saying that you can’t pay your workers a living wage. Much of your argument relies on you already paying your employees only the absolute minimum wage.” But he never says that. He says this:

        “I’ll give an example – a starting dishwasher at The 5 Point makes $10.50 per hour, plus $2-$3 per hour in tips, plus meals and drinks, and after 3 months gets a raise, health insurance, and a 401k plan which after 6 months includes matching contributions and profit share. Raises are made regularly and go up to $12.40 for that position.With tips and benefits the lowest paid position makes well over $15 an hour. Other more successful restaurants like Tom Douglass’s or Anthony’s do even more. I agree that $9.32 (the current minimum wage isn’t enough).”

      • “You are saying that you can’t pay your workers a living wage”

        Depends on your definition of ‘livable’. Folks aren’t dying on minimum wage are they?

    • I’m against simply imposing the proposed minimum wage free of conditions or considerations–but I doubt in the real world it would be. I’m fairly confident nonprofits would be exempted to some degree, for example. Any final proposal would be moderated by the interests and concerns of business owners and others — does anyone in good faith doubt this, given the clout these parties have?

      According to a friend, you’re on the record as having opposed the state income tax proposal of a few years back as well as the sick leave proposal. You’re striking a conciliatory and reasonable note here, but given your concerns about the income/welfare/resource divide, what was your reasoning in those cases?

      If the concerns you raise are personal convictions, why haven’t you acted on those issues on your own initiative, starting at the places where you have a significant say in employee policies?

      • I’m happy to have these conversation.

        For the record, I ended up supporting and voted for the State high income earner income tax. I originally questioned it as it taxed small business income that wasn’t taken by the owner as income. I think that was flawed. The people who were working to get it passed didn’t even realize it did that. That year Tim Eyman had initiatives on the ballot that gutted state funding, so I ended up supporting the income tax. As a principle, I support a statewide income tax. Still do. If it comes up again, as long as it is crafted fairly, I’ll support it.

        As for sick days- the original proposal sucked. I agreed with the intent, but not the proposal. After the city council updated it, I supported it. I still have an issue with it, as do many council members, as it exempted collective bargaining agreements.

        As for minimum wage, I’ve always supported a higher minimum wage. I think it should go up nationally per Obama’s plan. I think it should go up statewide and I think it should go up in Seattle. At the same time I think the $15Now idea that it go up to $15 across the board immediately is foolishness.

        People can be very progressive without agreeing with every liberal proposal put forward. May proposals have great intent but are poorly crafted. There is nothing wrong with making them better.

  4. This all misses the point. The point is that the gap between the “wealthy” and those “barely able to pay their bills without accrueing more debt” has been growing so fast. If we don’t fearlessly stand up against economic and social inequities , even at the expense of some small business owners, we will never see a living wage again.

    • Small businesses – defined as those with fewer than 10 employees – employ 75% of Seattle workers. Would you have them all go away and leave 75% unemployed?

      Is it better to give 3 people jobs at $10.00 / hour plus tips, or 2 at $15.00 / hour plus tips? (Both cost the employer $33.00/hour).

      Did you know your employer pays for 1/2 your social security and medicare benefits so you have something to live on when you’re old?

      Do you know that when you’re out sick, it costs the employer twice as much – once for your sick time, once for your replacement?

  5. Thankfully some people with common sense have spoken! I will definitely go out of my way if necessary, to do business with these people. Hopefully the powers that be will have enough sense to strike down this ridiculous idea.

  6. The more I see Capitol Hill’s crappiest businesses whinge about this, the more in favor of it I am. Sounds like a good market correction to shutter ‘em up to bring in a better suited bunch of job creators.

    • Perhaps people should not be thinking that their humanities degree will get them a job.

      Also the fact that Sawant is an Economics Professor speaks volumes about the value of a degree at our higher learning institutions.

  7. If you can’t afford to do business on Capitol Hill, you need to relocate.

    Anyone who loses a job at one of these cheap businesses will just end up getting a better-paying job someplace else.

    BBOA, you serve yourselves. Nobody needs you.

  8. Some other commenter here had posted the public record property value of many of these business owners (namely housing), including Dave Meinert’s. But that posting has since been deleted.

    I believe that including the salary, housing value, and/or net worth of these business owners is fair game when we’re talking about living wages of their workers. The split between the haves and the have nots is ever widening. When the workers of these businesses cannot afford the rent of even a modest studio on full time salary, while the owners are purchasing property valued at $750k+ and still grousing they can’t turn a profit to pay their employees $30k, then we at least know the playing field.

    If we were to believe the business owners, they were making minimal wages themselves, and barely scraping by. Which, with this group of business owners, is not the case.

    • …”The split between the haves and the have nots is ever widening”…
      And because kicking in the front door and dragging the owners out of their homes is frowned upon at this time, we’ve discovered that stealing peoples money via legalized wealth distribution won’t get us jail time.

      • If the government were to subsidize these business, do you think low wage employees would get paid more?

        If we were to remove the existing minimum wage, do you think they would get paid less?

        Which would seem more likely?

          • wait…how the F would you know if an owners house is paid for by the business….or by inheritance…..or by the SPOUSE income or inheritance…huhj? You know how?? You don’t!!!!! But you come here and spout off stupid crap…

            Damn…jealousy is ungly.and let noone pretend that all this is simply class envy.

            But, if you think its your right to dictate to others about what they have..I want to know how others spend my tax dollars….hows that??? I want to know if my welfare dollars are going to actual needs, not cigerettes, booze, porn and gambling, bet all you holier than thous, all you guys who would be paying so much more money to YOUR employees, you all would frown upon the poor oppressed having to show where the things they got came from, right………right.

  9. Remember that the actual cost to an employer for an employee earning $15/hr is actually $16.15 when you include the required matching Social Security and Medicare taxes. It might be a little higher too when Federal Unemployment or State Unemployment gets added in. In other words, $15 is really $16.15. I am not arguing one way or the other here (I’m still conflicted) but the whole cost including the employer matching needs to be part of the discussion.

    For a company of 10 employees working 40 hours the difference between weekly total payroll costs of $10/hour vs. $15/hour is an additional $2,153 per week or just shy of $26,000 per year in additional payroll costs. To make up that additional $26,000 in revenue per year to cover payroll costs for a $15/hour minimum wage might not be feasible for some employers because their customers won’t want to pay the prices for the product or service to make this work.

    Again, just putting some numbers into the conversation so that all the details can be considered. It’s not easy or straightforward.

    • Math Correction:

      10 Full Time Employees x
      40 hours per week x 52 weeks per year = 20,800 x an additional $5 per hour = $104,000 in additional payroll. This does not include additional taxes, insurance, etc.

  10. The ones that can’t pay, just need to close so better job creators can move in. The above mentioned businesses are not that great anyway. Panache and Metro sells poorly made clothing, Annapurna is a dump, Scream is a dime a dozen chop shop, Olivar, Julia’s and Americana are mediocre at best in regards to service and food… definitely MUCH better on the hill.

  11. I think that another part of this equation rests at the feet of the consumer. People have a sense of entitlement that they should be able to own everything, the latest tech, the latest fashions, the latest toys etc. All of these things change by the minute and most are designed to be disposable in order to make them cheap so most people can afford them.
    I would argue that if products were more expensive, people would value them more, expect more longevity from them, dispose less, and in addition, the business owners would have larger profit margins with which to pay their employees a decent wage. Who knows, it might even lead to more things being manufactured here at home, with less cheap imports from overseas.

  12. I support a minimum wage increase, but not to $15. That is an enormous increased expense to local businesses. The increase will undoubtedly raise prices of just about everything in Seattle. For those that complain that rent is too high to live on Capitol Hill, just wait until it is also too expensive eat, drink, or do anything else in this city.

    • It will probably raise prices, but will it really raise them enough to undo the benefit of a minwage increase?

      Let’s think about it the other way. We let minwage stagnate. Does that lower prices? Are prices currently spiraling downwards? It’s been limbering along for a while now, the rich are richer than ever and everyone’s stroking their beards going “ah yes. I like being poor.”

  13. One question I have to the city of Seattle is in relation to the recent spike in housing both to rent or own that has happened citywide in the past few years. When minimum wage is raised to $15/hour how will you keep property management corporations from continuing to increase rents so rapidly? These companies, like northwest apartments and many others, care only for their bottom lines which are in servitude to banks, investors, and greedy greedy individuals. If people didn’t have to spend such a ridiculous share of their wages on housing, they would have more disposable income to pay higher prices for food and clothing, ensuring that the people working to produce said goods were fairly paid too.

    • If minimum wage is not raised to $15, how is the city of Seattle preventing rent increases or housing cost spikes?

      • The city has little to no control over rents — it’s simple economics, supply and demand. Lots of new business/employment in the Seattle area (Amazon, Vulcan, Google, etc.) means more workers, more demand. Development has not kept up with the demand so the supply cannot fulfill the demand. Throw in all the NIMBYs that oppose development in their neighborhoods and that just compounds the problem. Too much demand + not enough supply = rising rents. And the State of Washington does not allow rent control so the city can’t enact any kind of laws to that effect.

  14. Do these food realize that everyone else would me making $15 too, or are they too, not just their employees? You can buy a lot more clothes& dinners out on $15 then you can on $9.32. If these folks have something worth selling, they oughtta see a lot more business when everyone else gets raised up too.

  15. Dear Steven Lien:

    Close your shop, so a better paying business can move-in. You can find the underwear you sell much cheaper online anyway… or you can just move all your ASSets to your Portland store.

  16. I call the bluff. Really, you are going to close immediately? The day after this gets enacted you will lock the door, break your lease, have a fire sale with remaining inventory? If you do that, instead of less profit you will have zero profit. I suspect you might not make that choice. But if you do, any job you get will pay at least $15.

    • Please be aware that since the recession hit in 2008, I have had to pay myself less than $15 per hour. As owner of the company, I am earning less than my managers. It’s a tough economy for retail.

  17. Wow, some of the comments here are so myopic. Enjoy living in a city with nothing but the businesses you bitch about on here all day long, because those yuppie bars run by the rich Bellevue folk and Office Maxes will be the only ones left when the rest are forced to close due to this policy combined with the exhorbitant rents on the Hill. Yes, an extra $4,000-$5,000 a month is substantial to most small businesses.

    And do you really think an increase to $15 is going to allow you to comfortably live on the Hill? Jesus, I work in a solidly middle class job and most of my co-workers earning $60,000 make hour long commutes on a daily basis because they can’t afford to live with their families in the city. My husband and I had a hell of a time finding any place we could afford that was over 700sq ft last year when we moved, and we make over $100,000. The wage is not the problem. It’s the rent prices and developers creating tiny apartments that only wealthy single people want and can afford. They are not catering to minimum wages, they are catering to Amazon & Microsoft. $15 will never be able to compete with that.

    • Jay – you’re entirely correct that I spoke up about the way the original Sick Days proposal was written. But after the Council finally presented the proposal, I and many other progressive restaurant owners supported it because it took into account how small businesses actually operate, and even exempted some very small businesses. It ended up being good law. I think and hope we raise the minimum wage in the same way. I trust we will. And I trust I’ll support it.

      • Meinert means that it ended up being good law for him, specifically. And having purchased both access and enfluence, he was able to ensure that he could hide behind his little concern-trolly self-delusion by saying “See, I’m progressive because I humbly allowed the law to pass… after making damn sure to mitigate the minimal inconveniences that the original wording would have imposed on me (specifically) and those privileged few who happen to be similarly positioned… even though those changes were at the expense of the people who would have benefited most from the law in the first place.”

        Any business owner on this list who isn’t taking steps NOW to be able to successfully transition to a $15/hr minimum wage withing the next 2 years does not deserve to survive when it actually happens. For all of Meinert’s weasly hand-wrining and scare-mongering, the fact remains that each and every signator on this list will find a way of making money within whatever legislated constraints are placed on them… because that is what a business person does (whether small or large).

        • Hey Meinhart…why don’t you just stop…..STOP. Do you really think that a calm, thought out post, repeatedly is really gonna hit home with these people. Theyre jealous, thats it…and NOTHING you say is gonna make them happy…..

          Really, this IS NOT about knowledge, its about feelings…and YOUR money hurts THEIR feelings.

          Like, you leftist socialist city government, lets take them into consideration. DO YOU REALLY THINK that dems do such a lousy job at the economy because they are dumber?? Do you really think that liberals have never owned a business and don’t REALIZE that a 15 buck minimum wage is ASSININE?? of course they do!! Your no smarter than them. THis is a political move,

          SO you presenting fact after fact is plain USELESS. No body wants fact……its alllll about feeeeeeeeelings….and keeping them fluffy…..

  18. This isn’t shocking since Capitol Hill has become Bellevue West over the past 10 years or so. I honestly can’t tell the difference between Broadway and Downtown Bellevue anymore.

    But if the Mayor & Council allow all the exceptions business owners are demanding, the $15.00 minimum wage the legislation will become meaningless and toothless in the end.

    • …”I honestly can’t tell the difference between Broadway and Downtown Bellevue anymore.”

      Really? All the gum on the sidewalks, cigarette butts and trash is a good indicator for me.

  19. If you really want to help the poor folks, how about stopping increases in rents or food prices? And neither of that is going to happen.

  20. None of us has the right to eat out at a restaurant or buy clothing at prices so low that the people who serve us have to live in poverty. If a business cannot afford to pay living wages, and you can’t afford to eat out because they do pay living wages, tough. Eat at home. A person’s right to a living wage trumps your right to cheap food and clothes. Sorry.

  21. It’s a very complicated issue. That said, isn’t it true that the real issue is high rents? Maybe small businesses should enter into dialogue with the property owners for rent reductions so the whole hill doesn’t go down the tubes? I dunno…

  22. How many neighborhood businesses are members of the BBOA? Only 12 signed the letter, but isn’t the total membership more than that? If so, it’s not correct to say that the BBOA “unanimously” supports the letter. If not, the BBOA is really a tiny organization compared to how many businesses there are in the Broadway area, and as such isn’t going to have much influence.

  23. If these businesses are operating on such a slim profit margin, and only profit because they pay their workers an unlivable wage, they should not be in business!
    If only those foolish owners would realize that all of that extra income would go directly back into their businesses. Do you think he working poor would start saving for retirement? NOPE. They would go out and buy shit. That’s how an economy works. When you can only buy essentials because you don’t make shit, no one benefits.

  24. Hard Facts from a small business owner:

    I operate a business in the city of Seattle, my Gross Sales for 2013 was around $500k, profit of the gross sales was around $61k. As the owner I take a small salary (25k) true total profit was 36k. I have 6 employees, total hours worked between my employees for 2013 was just over 13,000 hours. My average wage per employee is just over $10/hr. So say I move everyone up $5 per hour. Staff makes $15 per hour (don’t forget employers have to pay, 7% SSI, State UI and Workers Comp) Really a $15 per hour job adds about $2.50 per hour so a total of $17.50 per hour.

    As it stands, I feel the prices we charge are fair, our customers are working class, we are mostly low to middle wage workers.

    Here’s some math:

    2013:

    Total Sales: $500,000
    Total Expenses: (GOGS, Rent, Etc) $302,000
    Total Wages: (including taxes and benefits) $162,000 (32.4% Labor)
    Total Profit: (minus owners draw) $36,000

    Scenario: 1
    Maintain my business at the current level (IF) this $15/hr minimum wage passes:

    Total Sales: $500,000
    Total Expenses**: (GOGS, Rent, Etc) $302,000
    Total Wages: $227,500 (45.5% Labor)
    Total Profit: (minus owners draw) -$29,000

    In this scenario I would be broke, my business would fail and 6 employees and myself would be out of a job. All vendors would lose my business. Can we say domino effect

    Scenario 2: Raise prices by 42% to make up for the additional labor costs AND costs my vendors would pass to me since they too will have to increase their minimum wage– 95% of my vendors are in Seattle and are also small businesses:

    Total Sales: $710,000
    Total Expenses**: (GOGS, Rent, Etc) $428,000
    Total Wages: $227,500 (32% Labor)
    Total Profit: (minus owner draw) $29,500

    **costs of good for my business will rise just like everyone else.

    ________________________

    New Prices in Seattle: IF all FOOD business take the approach to raise prices by at least 42% to absorb the extra cost of labor.

    (prices include tax)

    Small Sandwich from Home Grown: $9.33
    Croissant from Crumble and Flake: $4.66
    Beer from Pine Box: $8.50
    Medium Latte from Vita: $5.68
    Bowl of Pho: $10
    Sushi from Sushi Maki: $11.36

    Q: Who will absorb these costs?
    A: THE MIDDLE CLASS.

    Middle class will not see an increase in pay, middle class would instantly cut spending in order to survive, small business WILL CLOSE.

    So, now that a true small business owner who just like MOST small business owners, do what I do because I love the business I am in, will lose. YES, my business is good, yes we are always busy, yes I love my customers and my employees. I am single, I don’t have a spouse to subsidize my income, I don’t make a lot of money, I live a very humble life, I rent a room in an apartment on Capitol Hill, I drive a car that is 13 years old.

    This is war on the Middle Class.

    • One of the hopes that this minimum wage increase will do is also spur a raise in wages that aren’t minimum wage. For instance, I have seen many jobs looking for experienced college-educated people that pay $15/hr. Their pool of seekers would dramatically shrink if they couldn’t pay more than minimum wage.

      With a rise in minimum wage, one would hope everybody’s wages would go up, respectively.

      • Don’t get me wrong, I support an increase in minimum wage, just not that big of a jump right away. I’m in the “raise it gradually” camp. Maybe a 3-step plan to get wages to $15 an hour in a few years, rather than this big jump now and then crossing our fingers that everything else will catch up without a hitch.

      • higher prices won’t just harm the middle class. They will also harm the poor in Seattle, the majority of who don’t have jobs. Retired people, people with disabilities, unemployed, students, etc. These people won’t be getting raises, but their costs will go up dramtically. What is Sawant’s plan to help these people who will be harmed by her $15 minimum wage?

        • Actually most poor people are working poor. Very few poor people don’t work and the majority of those people are elderly, mentally ill, or physically unable to work.

          • This is completely false. Look up the data. Only 2% of people not in families living in poverty in Seattle have a full time job. And only 1% of families living in poverty have two full time jobs.

        • There is no plan in that regard. This entire line of socialist argument is not about fixing any problem. It’s about the view that if you have more then someone else, you got it unjustly.
          If they really wanted to fix problems they would admit most of the labor regulations and laws going back to the late 1930’s have caused much of the division between the “have’s and have not’s”. Getting rid of the overtime and mandatory benefits would allow employers to hire more people (or less since they could let employees work as much as they wanted or needed). Minimum wage wouldn’t be as big an issue if all you had to do was work a few more hours per week and you were allowed to do so without the employer receiving a penalty. Also, benefits were offered by employers as a way of keeping good employees. Now it’s mandatory and is just another expense that keeps business owners from hiring.

          Again, the $15 minimum wage push is just another feel good effort that has no positive impact for any of the people they are getting to rally for it.

          • ERF Nice to see someone understands basic economics. Minimum wage increases will do nothing in the long run to help our entire economy. Will hurt those it is intended to help the most.

        • “their costs will go up dramtically. What is Sawant’s plan to help these people”

          Price controls! We’ll be Caracas on the Sound.

    • Two questions: 1) I’m not grasping why you or anyone would have to raise prices by 42% when your labor costs are less then 1/3 of your total costs and they’re going up 50% (from $10 + other payroll costs to $15 + other payroll costs). And 2) If you sell to lower-income workers and your product is desirable you should see a substantial increase in demand — whatever it is you sell, it’s surely easier to afford for a $15/hour worker than for one at $9.32/hour. So your universe of potential customers will be expanded and so will their ability to pay more. Won’t that affect your bottom line too?

      Think broadly. The macroeconomic impact of higher wages is very different than the microeconomic impact of just you raising wages.

      • >>1) I’m not grasping why you or anyone would have to raise prices by 42% when your labor costs are less then 1/3 of your total costs and they’re going up 50% (from $10 + other payroll costs to $15 + other payroll costs). <>2) If you sell to lower-income workers and your product is desirable you should see a substantial increase in demand — whatever it is you sell, it’s surely easier to afford for a $15/hour worker than for one at $9.32/hour. So your universe of potential customers will be expanded and so will their ability to pay more. Won’t that affect your bottom line too?<<

        most restaurants on Capitol Hill aren't selling to just low income workers. Some people getting raises will mean more spending for sure. But as that money is coming from somewhere, it means spending will be reduced somewhere else. And of course with such a large increase, we'll see some reduction in employment. And with 20-30% higher prices, sales will also decrease. These factors together will most likely mean less sales to the business owner no matter what, definitely not increased.

        The argument that sales will increase enough to make up for the rise in expenses is vapour economics.

        • Moving money from wealthy bank accounts to poor people’s pockets is widely understood to have a stimulative affect — the place the money “comes from” is less economically productive & demand-creating than where it goes, since low-wage workers tend to put essentially all of the money they have right back into the local economy. That’s not vapor economics, it’s a straightforward analysis of the fact that in our consumer economy, consumer demand is what drives business.

          • Yeah, and not only would it bring about a potential boost in consumption, but minimum wage workers would have more choice as to where to work if they want to survive and where to spend if then want to consume. That’s even if the rise in prices eats up their wages gained. Additionally, it would cause a rise in the effective demand for goods and services that serve lower income interests and potentially reverse the bellevueification of the hill.

            And, for those min wage workers no longer just barely surviving, they can now put money away to save, build up some assets, and even one day might be able to risk those assets in a job creating business of their own.

          • It does have a stimulative effect, but less than the proponents claim. The difference between money given to one group of people and money given to another is their rate of saving. If the workers spend 100% of what they earn, and ave 0%, and get a raise of say $100, then they spend $100. If the people that money is coming from save 10% (which is what the data says), then they save $10 and spend $90. The stimulative effect is not $100. It’s $10.

            Of course if you raise wages too much too quickly, aside from the stimulative effect mentioned above, prices rise, and there is a disemployment effect. These things more than counteract the stimulus.

      • With all do respect.. Of course you can’t grasp this, YOU’RE not a small business owner. Not only will my labor cost MORE, but the suppliers whom I buy my supplies from, which are ALL Seattle companies (minus 1) will have to increase their wholesale prices to ME which will then INCREASE the cost of goods I sell to YOU. It’s not just one cost that goes it, it’s ALL costs that will go up. #math

        • If your math is to just postulate a 42% cost increase when your labor is a third and it’s going up 50% then you should talk to someone about making a better business plan — maybe one that accounts for thousands more people with money to spend.

          • If your math is to just postulate a 42% cost increase when your labor is a third and it’s going up 50%.

            Yes, labor would go up, and yes the costs of the supplies I buy from my suppliers would also go up.

            then you should talk to someone about making a better business plan —

            Have you ever wrote a business plan? If so, how much of it did you throw out the window when you opened your business.

            maybe one that accounts for thousands more people with money to spend.

            Your fantasy world is really amazing

            Anyway, really, I don’t expect anyone who doesn’t run a business to completely understand.

          • And your rent will also go up 42%? Seems like you’ve oversimplified your calculations making them a bad model of reality.

          • See earlier post with all these numbers and you’ll see where I pulled them from

            Proposed Labor Cost = $227,500
            Labor Budget = 32% of Sales
            227,500 / .32% = 710,937.50 <– this number is what is needed to maintain a 32% labor cost.

            $710,937 / $500,000 = 1.42 which equals a 42% increase in sales needed to maintain a sustainable labor budget.

            David — You don't buy rent from a supplier. That is a fixed cost. The 42% is the number from the simple math that I provided.

          • Yes David, I lumped rent into that sum.. it was just simple math, nothing specific.

            Rent only accounts for around 8% of my sales, where labor accounts for 32%.

    • Thanks Ryan for breaking it down. I am also a small business owner that is struggling to make this proposal pencil out. For myself I’ve done the math and if this passes I’m done. there is simply not enough money left to pay myself a wage worth the headache of operating in Seattle. I paid my dues and worked my ass off. I will not continue to carry the stress and responsibility of ownership if I can just go back to tending bar and make more $$. Fuck it.

      • Jimmy: If your business plan relied on paying other people less than what it costs to live around here, then yes, you’re probably done, unless you’re wiling to do all that work yourself.

        You don’t get to purchase slaves to make your profit plan pencil out, you don’t get to hire children, and maybe soon, you won’t get to hire anyone for less than $15/hour.

        • Phil, as you know I usually respect what you have to say…even though I often disagree. But to accuse small business owners of “slave” and “child” labor is just nuts, not to mention a poor choice of words.

          • Bob, I think you misread. I did not accuse anyone of such. I pointed out that a number of restrictions on employment that make various business plans impractical. For instance, businesses would be more able to operate profitably if we allowed slavery, but we do not allow slavery, even though it harms those businesses that would otherwise avail themselves of the cheap labor. Similarly, we (mostly) do not allow businesses to employ children, despite the fact that this makes it more difficult for small, family-owned, businesses to get by.

            And soon, we may prevent businesses from employing anyone for less than $15 for every hour of work, despite the fact that employing people at such low rates makes businesses more profitable, and that a prohibition of such might make it more difficult for those businesses to continue to operate.

  25. Once the economy really starts to pick up (supposedly within the next 2 years) this issue will take care of itself. Low unemployment pushes up wages automatically.

    The problem when wages go up so does everything else. Gas , Food , Rent. You don’t think that big corporate America is going to let you get a raise and keep it do you?

  26. I don’t see where anyone small business owner here is say NO wage increase. What I’ve read is they do not support an overnight , 60% over state minimum. And that tips should be included. It is a fact that most servers/ bartenders I know make well over $25 per hour in tips alone. That should be accounted for and their wage should be adjusted for that. As for myself, I reckon the proposed increase would have a better chance of succeeding if phased in and accounting for tips as income.

  27. Would liked to have seen any of the small-business owners here (I am one myself, with no employees, only contractors/vendors) discuss the issues of training, absenteeism, productivity, and sick days.

    The research that’s out there about raising minimum wages isn’t extensive enough to draw broad conclusions about any given city. However, there seems to be a correlation in some of the work between a higher wage and a better workforce.

    So a jump from about $10 to $15 may bring with it an increase in hard costs, but it can also mean you get better workers, more committed to the job, who stay longer, and have fewer things that prevent them from coming in at all or quitting.

    I understand that retail absenteeism can be as high as 40% for minimum-wage jobs. The addition of sick days in Seattle should have been studied. Did it improve productivity in any measurable way? Could a business have slightly fewer employees or higher sales receipts?

  28. I appreciate the numbers provided by CDRyan. I would like to hear more about the cost of commercial rent in the area, and about the cost to the landlords of maintaining those properties. How can we push some of the cost of paying people a living wage back up to those who are profiting from simply owning property that their families paid off generations ago?

    And what about tax breaks as incentives to keep small businesses around, if they can’t make it when forced to pay living wages? We throw obscene amounts of money at big businesses like Boeing in the form of tax breaks, ostensibly because it would be disastrous to the economy if they left. We need to start acknowledging the importance of small businesses as well.

    • Phil – one of the many things not discussed yet is how many retail businesses (restaurants, retail shops, etc), pay a % of sales as rent. So as wages rise, and they raise their prices to cover that increase, rent also rises.

      I don’t know of any way to get commercial landlords to charge less. Rents have increased dramatically in the last decade. Rents in Pike Pine are going over $48 psf.

      As for tax breaks, the City of Seattle, who is making this law, doesn’t tax businesses enough to make up for this. A lot of the city’s tax base is from sales and property taxes. A break in these won’t help small businesses. Not to mention the city is broke, so giving anyone a tax break seems out of the question.

    • I keep a close eye on commercial rents around Capitol Hill. Some are decent, some are a little spendy and others are outrageous. Broadway for example is overpriced, you can tell it’s overpriced by looking at the new businesses that are moving in. Corporate, big businesses are the only players who can afford such huge rent payments.

      Some areas of Pike/Pine are a little more reasonably priced, but are starting to get too expensive for small business.

      For Example: (keep in mind, my experience is on the food service side)

      914 E. Pike St.Seattle, WA 98122 has been available for lease for quite a long time.

      Base rent is: $4643.33 (month)
      NNN: $692.52 (month)
      Total Rent: $5335.85 (month)

      To stay sustainable, my rule is that your rent shouldn’t be more than 8% of your total monthly sales.

      In order to stay sustainable, the business in this particular space needs to have at least $66,698 in monthly sales. For few businesses that’s no problem, but for most it’s not within reach.

      Fun Fact:

      A (food) business that does $67,000 per month in sales will gross over $800,000 per year in revenue. Of that $800,000, profits will be between $40,000 and $80,000.

  29. People should consider different alternatives than only raising the minimum wage. For example why tax business when you can tax rich individuals? I think it’s time they considered raising a state income tax in Washington, to offset how regressive our taxation is, with a negative rate at the lowest end of the scale for those who make under a living wage. This could really help low wage earners, but with the right schedule would be an acceptable burden to the wealthy, and yet not put lower paid workers out of a job.

    The problem isn’t these local retailers being stingy (although I am sure there are many stingy business owners). The problem is highly paid workers moving from elsewhere for the tech industry and other skilled jobs, who are driving up the cost of living. Raising minimum wage more than the normal cost of living increase might make sense in that context, because those on the lower end of the wage scale are experience cost of living rise much faster than it would if there was not such an influx of people from the rest of the country, so it is not as if it could immediately create much higher cost of living than has already been created by the market forces.

    However at the $15 proposal it will likely punish those currently looking for work at the expense of those who already have a job, and it will kill some small businesses while allowing the big chains to survive. Of course those big chains or more upscale stores can afford to pay these people more than a colorful local bar or retail shop, and we will see a better pay and little more job security in that way, while losing the local character.

    Also consider that it will eventually drive up cost of living, and this will make Seattle more like San Francisco, not open to the middle class, although it’s already becoming that way naturally. Personally I like that this city balances being a destination of opportunity, as well as a place that takes care of it’s own. Coming from crumbling Midwestern cities, you guys have generally good public infrastructure and government services, and it feels like the middle class is in better shape (although still somewhat hollowed). Yet there’s room here for all types of people, not just highly paid engineers or people who have always lived here, but also students and artists, or unskilled workers who’s line of work has dried up in places that have been harder hit by the recession. If we make it less friendly for people to move here, it will actually reduce this diversity and there will increasingly be more Amazon / Microsoft employees moving here, but many who haven’t taken root will be driven out.

  30. Welcome to Venezuela, where people with ideas, capital and business are the enemy. Why not make it $22 dollars an hour? I mean it’s hard to support kids on $15 dollars an hour also.
    Don’t worry, let’s also give them free transit, control the housing/rent prices and punish those evil profiteers trying to increase the size of their business and homes.

    Oh wait, we are still in Seattle.

  31. Pingback: Capitol Hill businesses plan huddle on $15/hour strategy | CHS Capitol Hill Seattle

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  33. Pingback: On May Day, Seattle Mayor Ed Murray Announces Plan for $15/Hour Minimum Wage | Moral Low Ground

  34. I am strongly against this idea. This will cripple the economy and cause lots of inflation…… This is idea by short sighted people….

  35. Pingback: Seattle City Council Unanimously Approves $15 Minimum Wage | Moral Low Ground