New voices from Capitol Hill businesses join public discussion on minimum wage amid sea of $15 Now supporters

IMG_4084IMG_4228It was one of the most boisterous Seattle City Council meetings… ever. Several hundred people packed into First Hill’s Great Hall Wednesday night for the first of a series of hearings on raising the minimum wage in Seattle.

The red-shirted masses of Kshama Sawant’s $15 Now campaign filled the 8th and Seneca auditorium waving signs and uproariously cheering on those who spoke in favor of a $15 an hour minimum wage.

Several Capitol Hill business owners were also in attendance, including many who have thus far waited to speak out in public on raising the minimum wage. CHS spoke with a handful of owners last week about ideas to smooth the ramp to a $15/hour minimum wage including phase-ins and a “total compensation” calculation.

Jasmine Donovan, whose grandfather founded Dick’s Drive-In, told the crowd and assembled City Council members an immediate $15 an hour wage increase would mean a $1.5 million cost to the burger business and an immediate rise in burger prices. She said the local burger chain would also have to drop some employee benefits.IMG_4034

Council members Jean Godden, Sawant, Nick Licata, Sally Clark and Mike O’Brien were on hand for the four-hour hearing. Mayor Ed Murray was not.

By the tally of the Sawant camp, supporters out-voiced those who oppose a $15 wage 7 to 1.Screen Shot 2014-03-05 at 10.05.14 PM

Several workers spoke, including one Capitol Hill woman who said she works at a downtown McDonald’s, a job she enjoys, but wished she were paid more to afford to go back to school.

“It’s hard to keep my spirits up when my pay is so low,” she said. “I hope you think of hardworking people like me when you vote on a $15 an hour minimum wage.”

Among speakers attending Wednesday night’s forum, there seemed to be little debate that the minimum wage should be raised. Many small business owners said they supported some type of wage increase, as long as it included calculations for tips and employee benefits. Tamara Murphy, owners of Terra Plata and Elliott Bay Cafe said layoffs would happen in restaurants across city if tip credits were not included in a new ordinance.

The City Council Committee on Minimum Wage and Income Inequality and the mayor’s Income Inequality Advisory Committee sponsored the joint public hearing.

The mayor’s 25-member task force has an April 30th deadline to present Murray with a set of recommendations on raising the minimum wage. The meetings are closed to the public, and include representatives from small business and labor. You can learn more about the Income Inequality Advisory Committee here. The Mayor’s “Online Town Hall” on income inequality is also off to a rather quiet start at http://incomeinequality.mindmixer.com/

Sawant’s camp continues to prepare legislation that she has promised to present to Council in “early 2014.” $15 Now and other groups are also pushing forward on preparations for possible ballot initiatives to turn the decision over to voters should City Hall stumble in its progress to address the minimum wage issue.

A questionnaire of CHS readers showed considerable support for a measured implementation of a $15 an hour minimum wage, including phase-ins and accounting for “total compensation.” Here is how 50 respondents who said they owned businesses told us they viewed possible mitigations to protect small businesses as income inequality is addressed. Sawant, in the meantime, is keeping her cards close to her chest as the call for a phase-in appears to be gaining support.owners (1)

 CHS Notes:

  • Angela Stowell, co-owner Capitol Hill’s Anchovies & Olives and other neighborhood Ethan Stowell eateries, said servers and bartenders in the Stowell restaurant family make upward of $30 an hour and asked for council members to include a tip credit in any minimum wage increase.
  • The owner of Adventure Day Care Seattle, which employs six workers, said many friends have asked her how she’ll deal with a $15 an hour wage. “I’ll figure it out,” she said.
  • A co-owner of The Confectional said an immediate $15 an hour wage increase would force the Broadway dessert shop to close and the company would need to lay off of half of their staff.
  • David Rolf, president of SEIU Healthcare 775NW, co-chaired the meeting as a representative from the mayor’s minimum wage task force.
  • “People say its impossible to address poverty … really it’s a question if $15 goes to the workers … or if it goes to the owner,” said one $15 Now supporter.
  • “We do support the idea … the solution we’re looking for is a pragmatic one,” said one restaurant worker.
  • One man, who said he was a 8-year employee of Burger King and a Navy Vet, said “if you pass this with 100 exceptions, you’re going to end up hurting people like me who need your help.”
  • “$15 an hour is a compromise,” said Patrick, a member of the Freedom Socialist Party and carpenter union member.
  • One woman with the $15 Now campaign said raising the minimum wage was a women’s rights issue because of high poverty rates compared to men. “It’s absurd to think women can wait another 15 years” for a minimum wage increase.
  • A representative from Belltown’s Icon Grill said “let’s continue to promote businesses that allow people to start at the bottom and work their way to the top.”

IMG_3962

 

UPDATE: Mayor Murray released this statement about the forum:

“Cities are our true laboratories of democracy. The energy and appetite for experimental thinking, the enterprise to launch cutting-edge initiatives, the will to try novel ways of building and improving our communities – each of these is woven into our cities’ DNA, and this city’s DNA in particular.

There is no better example of Seattle’s energy, enterprise and will than our ongoing conversation about raising the minimum wage. While similar conversations are occurring throughout the country, this is an area where Seattle is in a great position to be national leader.

The passion we see around this issue out in the community is a passion shared by many in City Hall. We know it’s not a matter of if we will get to $15 per hour, but when and how we get there. I am personally passionate about the need to address this issue – an issue that President Obama has referred to as ‘the defining issue of our time.’ I’m just as passionate about the need to get it right, in a way that doesn’t burden our immigrant entrepreneurs in South Seattle, our small business owners in Lake City Way, our beloved neighborhood restaurants or our critical community non-profit partners.

I’m grateful to all who brought their voices, their ears and their passion to today’s joint public hearing between my Income Inequality Advisory Committee and the City Council’s Select Committee on Minimum Wage. There will be plenty of opportunities for future participation in this critical discussion, including an online town hall that I am launching today. I encourage all to stay passionate and stay engaged.

Together, we will get to $15 per hour, and we will get it right.”

33 thoughts on “New voices from Capitol Hill businesses join public discussion on minimum wage amid sea of $15 Now supporters

  1. I don’t understand why tips wouldn’t count as compensation. They have to be reported on tax returns, and many tipped employees (like bartenders and servers in the kinds of higher end restaurants that dot the hill) currently make well over $15 an hour.

    An exemption for health and benefits, I’m really not sold on – but mostly because I think that’s a completely different discussion than the one about hourly wages. I see room for a joint push from workers and small businesses alike to institute a state-level single payer system like Vermont. Get employers out of health care entirely.

    As far as phased implementation, to hell with that. Are we going to write a law that requires landlords to phase in rent increases over the course of two years? The bills aren’t going to wait.

    • You are right that landlords are not required to phase in rent increases, but I don’t think you could find a landlord who increased rent by 60% in a single year. When rent is increased by 20% in a year, tenants get angry and move out. Why not try a 20% increase in wages per year rather than sticking local businesses with a 60% increase?

    • I’m 100% with you on no slow peddling the minimum wage implementation. The problem with the tip credit is that it opens a huge loop hole for businesses. Stick a jar out at Subway or Starbucks and all of a sudden these multinationals can pay their employees well below minimum. A tip credit also basically asks customers to subsidize the business by providing for wages. Another major problem with the tip credit is wage theft. Back before credit cards, employees could physically count and keep tips. Now it’s up to (often shady) business owners to tell workers how much they earned in tips, often weeks after they’re tipped. This opens up all kinds of avenues for wage theft. Neo even though tip credits might seem to make sense on the surface, i feel like they open up multiple avenues for abuse.

      • Better solution – removing tipping altogether while increasing min wage to something you can live on. Seriously who likes doing math after eating a huge meal.

  2. I think that promoting a “phased-in” approach is a tactic that in many cases is against the $15 wage. How many years would people want it phased in? Nobody will say, it’s always “multiple years”. It’s like they’re hoping to outlast the controversy.

    As far as social justice goes, please bear in mind that minimum wage laws in our state initially applied to only women. It was because of wage disparities and a fear that society was failing women. Rather than simply allow this to persist the legislature took action. Unfortunately, 66% of minimum wage earners are women, many of our homeless youth and adults have jobs yet remain jobless and poverty levels are practically pegged to race. There is a structural problem here.

    And people are dying from the impact of povert every day.

    Where’s the legitimate concern for them? We certainly can’t “phase in” homelessness or hunger to mitigate their impact on our vulnerable. We can’t make carve outs for the mortality rates.

    Why are opponents hiding the harsh realities of injustice in Seattle? You’re in the best biz climate on the west coast. Business ownership is a privilege and our city throws perks at you while banks have your back. Squeeze businesses and others appear. Squeeze people though and you only get blood.

    C’mon, Seattle.

    • How about this – phase in over 3-5 years, with the largest businesses phasing in over 3, the smallest and non-profits over 5.

    • You said that business ownership is a privilege and banks have your back. I’d like to, as a business owner for 12 years, point out that this is not really true in most cases.

      Banks typically hesitate to lend to small businesses. Even profitable ones don’t get special treatment. Many business owners finance from personal savings. Remember travelers cafe on Pine? They were on their 3rd home mortgage to fund their business.

      On the other hand, who can absorb the wage increases? Those big multinational chains can. They’re also the ones that can afford the build outs and rent in the new swanky apartment buildings.

      So small biz owners take a large amount of personal risk. Typically their businesses fail within 5 years and it is a negative impact on the bank accoun of the entrepreneur. I urge you to consider this hurts mom and pop and other small businesses the most. And your subway franchisee also considered mom and pop – they are just franchises of the mothership.

      Office max on broadway is a great example of the type of business that will flourish on the hill. They have major backing financially, can afford the high rent and $15 min wage.

      So keep in mind that $15 is not without tradeoffs for your smaller local businesses. I do fully anticipate that many will close, and I already know another employer who will move about 100 jobs from Seattle to surrounding area since margins are so slim. And it’s a great employer.

      My opinion is that the there is a sentiment of anti-business on this forum. It’s natural – big companies haven’t earned an awful lot of trust – at least the ones who have underpaid employees.

      I don’t know the right answer. I only know we’ll see tradeoffs.

  3. I’m surprised there isn’t more commentary about what adding a significant increase in revenue at the bottom end of the salary pool will do to those just above the magic $15/hour. They won’t receive any increase in compensation, but there’s a very good chance there will be a increases in their costs; it’s naive to think rents, food, and other staples won’t increase. Not specifically because the businesses have to raise prices due to paying out higher wages; they will raised prices because they can raise prices due to the overall increase of money in the system.

    So the person struggling to make a living at $9/hour buys something for $2. They now make $15, and that $2 item is now $3. It’s kind of a wash. The person who was making $15 and buying a couple of those $2 items for $4 are now stuck with a $6 bill, with no increase in compensation.

    Instead of asking people if they support a $15 minimum wage, we should ask people who make $15-$20/hour if they support normalizing their life to that $15 wage. No one wants to slide backward, but I suspect that might be the end result. While it brings some of the lower-end up, it could end up further shrinking the vulnerable lower middle-class, and shifting even more middle-class into lower-middle class.

    • That’s what I’ve been saying all along.

      Current minimum wage worker most likely doing unskilled work. Current $15/hour worker likely has some skill and education behind them. (understanding that some are well-educated/skilled people work minimum wage jobs today so no one take offense).

      Now remove the gap, those who likely went to college, acquired a skill and make $15/hr today – you’ve taken away the worth of their efforts. They too would understandably want more per hour.

      Where does it end?

      Reasonable and steady increases are the way. Or, reduce COGs so daily living is more affordable.

    • I disagree that folks making more than $15 won’t see a wage bump. Competition for skilled workers will lead to raises for these folks because if businesses don’t pay them $16 or $17, they’ll go somewhere else. You see this with unions – when they raise the wage floor, everyone’s wages go up, not just the bottom. The other part of this argument – that prices will rise dramatically – is also overstated. These businesses operate in a relatively competitive environment. They simply can’t raise prices much w/o driving customers away. Many studies have shown that price increases associated with minimum wage bumps are minimal. The main effect of the minimum wage increase will be transferring a higher share of profits from employers to employees, which is the reason business owners oppose raising wages.

      • Early childhood educators in Seattle overwhelmingly make minimum wage and in cases where they make more, rarely top $15 an hour. People think low wage = low skill. Are you telling me that teachers are low skilled? I have a four year degree and a 3 year internship as an education major with a focus on early literacy and teaching English to non-native speakers. Is that a low skill job? Is that an entry level job?

        I had that grocery store cashier job as a teenager at less than $6 per hour. And I’m glad I did. But, look at your grocery check out line. I don’t know about you, but I see adults far more frequently than I see children. Wake up people. It isn’t just as easy as saying “this is a low skill position so it deserves low pay.” There are plenty of highly skilled, lowly valued jobs in society. The wage increase in 98 was an 80% increase and WA is currently the best job growth in the nation sitting half a percent higher than the national average. (source: http://www.bloomberg.com/news/2014-03-05/washington-shows-highest-minimum-wage-state-beats-u-s-with-jobs.html)

        I agree with a smart plan, phasing in with relationship to open books. The thing is, these business owners who say they cannot afford it, do not want to open their books. They look at how they are currently operating. They expect to base their current budget on a future budget without accounting for an uptick in sales. Not a single word from businesses at last night’s meeting addressed the reality that they would see an increase in demand because more people would be able to afford services.
        The other thing that was left out of the debate is the money the state spends on DSHS that subsidizes low wages for these employers. As a teacher, I had to rely on DSHS to send my own child to pre-school. I also strongly agree with the women’s rights component. WA, despite its many strengths, lacks in the gender gap. How can we have one of the strongest job markets in the nation and still expect to sit on the backs of low wage women do the care-taking, service providing work so that men can reap the benefits?
        I work for a small non-profit school. I am aware of the strain this would put on our school and I want to see this done right. But the business owners last night sounded like they were against the idea, not for it with help. And if 8.7 billion can be put aside for Boeing to attract jobs, 8.7 billion can be put aside for small businesses.

      • You believe that businesses large and small will voluntarily give a raise to employees over the $15/hr threshold? You are wrong. And where are these people over the $15/hr threshold, who are now clamoring for a raise of their own, going to move on to for greener pastures? Likely, the least efficient and less experienced workers will be terminated to help offset the rise in labor costs. Businesses will get lean and mean. Your simplistic view is what is completely wrong with this movement. You believe businesses will absorb the rise in labor costs. What is being ignored by many is that costs will be passed onto the consumers: the lower class, middle class, upper class – everyone. This is manipulated inflation. Businesses that are not successful in passing on the lion’s share of their increased labor costs will die off, hence why so many small businesses oppose a sudden and drastic increase in the minimum wage. Small businesses run the high risk of alienating customers and consumers refusing to pay increased prices.

        • Businesses have been getting lean and mean for years. I think a drastic rise in the proposed min wage will accelerate it. Anytime a business cuts costs they look at labor first. Technology already replaced millions of blue collar jobs and in the past decade, white collar workers. The smart businesses will survive with technology and self service models. Heck, why not integrate ai. Unless you’re highly cognitive and technical most of us are obsolete. $50 or $15 min wage will not solve that, many people are afraid to face up to this quickly changing world and adapt.

          Ice cream and burgers aside, which I can do without, I’m more worried about non profits and arts organizations and the communities they serve. They already dealt with the brunt of the recession, this will be a big blow. We’re still in a fragile economy. Even the Fed acknowledges that, which is why we’re in an inflationary race.

  4. Also, this still doesn’t address the core problem: Minimum wage should be for teenagers. There aren’t enough jobs available for the middle and working classes. A lot of the low wage earners are skilled enough to do better work; there just isn’t better work available.

  5. If servers make $15.00 per hour, what justification will there be for tipping? Even if the cost of food goes up I will no longer be tipping so the cost to eat out will likely be a wash.

    • I won’t be tipping either – and in the end, they will make ALOT less money. But this is what they want…so it’s what they are going to get.

      • A lot of people I know who work for tips are against this proposal. Don’t generalize that this is what “they” want.

  6. If it passes – there will be no need to “tip”
    Hand me my $150.00 dinner bill and the server and staff get “0”.

  7. Be careful what you wish for. For everyone I’ve ever know, crappy pay is the main motivator for getting the heck out of these crappy low skill jobs and getting on with the rest of their lives.

  8. @Ryan- Bagel Deli had a 60% rent increase this year, and they’re no longer a business because of it, not because the minimum wage was increased, because it was while they were in business.

  9. Pingback: Neighborhood small biz survey shows tepid support for $15 minimum wage, strong backing for phase-in | CHS Capitol Hill Seattle

  10. Pingback: Sawant talks a friendly path for small businesses as March for $15 finishes on Capitol Hill | CHS Capitol Hill Seattle

  11. Pingback: Daily News Digest March 19, 2010 | Roland Sheppard's Daily News

  12. Pingback: Seattle finalizes plan for $15 minimum wage — eventually | CHS Capitol Hill Seattle