The $15/now people have filed a city ballot measure to increase the minimum wage to $15/hour:
- On Jan 1, 2015, the minimum wage for workers at big businesses will be raised to $15/hour and raised each year to adjust for inflation.
- For small- and medium-sized businesses and non-profit organizations, the minimum wage will be phased in over three years starting with $11/hour on Jan 1, 2015.
- Small- and medium-sized businesses are defined as having fewer than 250 Full Time Equivalents, the standard set by Seattle’s Paid Sick Leave Ordinance.
- No training wages, no lower wages for tipped workers, and no “total compensation.”
- Increased worker protections against wage and tip theft.
I was thinking more about this. One of the most common complaints and cautions I hear is that businesses will leave the city if this passes. It’s a fiction and myth that all businesses CAN move. Will a small business that does not have a geographical dependence on a dense urban customer base move?
Maybe. Let’s say a light manufacturing or light non-retail commercial business. If they operate today in West Seattle or Ballard or wherever but could trivially operate in, say, Renton? Or Kent? Or any other outlying small towns? AND without being in jeopardy from losing veteran staff who may actually be the lifeblood of the business? Remember, some businesses are only as strong as their staff. In those cases — sure, they can bail, if no one has a problem with their much longer commute perhaps relative to where they were and other external costs from such a move.
Anything bigger than that probably already pays close to $15/hour already if not more. Remember, too, that the bigger a business is the more difficult it may be for them to move due to reliance on other factors, and that they’re also able to more easily absorb cost changes like this in many cases.
But for businesses that rely upon instant and immediate access to a dense core of foot traffic or population, which is the bulk of the businesses that will be affected by the $15/now movement? Where will the small businesses near Pike Place Market, the Alaska Junction, or any other dense area in the city find comparable action outside of Seattle? We’re a captive market and the biggest one for 800 miles.
That’s just something to think about specific to the claim that “small businesses will flee” Seattle. Where is the small restaurant on Pike and Pine going to even possibly come close to the size of a customer base they enjoy where they are today, in a city ‘nearby’? Downtown Portland? Salt Lake City? Everything else aside, don’t believe that one line of argument for a moment.
My friend Ian, who has training as an economist, made a good point about this on Facebook:
Some won’t flee, they’ll close. Others will expand and employ more people as a result. The net impact on employment will likely be so small as to be lost in the statistical noise.
Whatever happens now is probably inevitable: 68% of Seattle residents support the minimum wage increasing.