Tuesday, June 10, 2014

Seattle Set to Enforce The Highest Minimum Wage In America

Image source UPI.com

Last Monday the Seattle City Council voted, unanimously in fact, to enact the highest minimum wage increase in the United States. A whopping 15 dollars per hour. The new wage will be enacted in phases, starting with the largest companies by 2017, and eventually for all business in 2021. The large crowd gathered inside the Council Chamber, erupted in cheers as the vote was finally tallied.
Councilwoman Kshama Sawant (the only member who is an admitted socialist) had this to say after the vote:
“there are more people competing for the same jobs, obviously teenagers lose out, people with less experience lose out, so the solution to that is not to condemn them for their low wages, but actually to bring them on par with everyone else.”
Let's be real here. This will no doubt have some serious repercussions on local businesses. In an age when teenagers and college grads are struggling to find low wage work, how exactly is anyone going to get their first job? How many businesses will have to cut their staff to a skeleton crew just to stay in the market? Even for a large company, that may mean doubling their payroll costs, or laying off quite a few people. The only way this isn't going to affect employment, is if the U.S. dollar is inflated to a ridiculous level by the time this is fully enacted (which is just as likely).

Honestly the city has likely shot itself in the foot, and in a really big way. Assuming the U.S. economy isn't wallowing in an inflationary disaster by 2021, trying to pay minimum wage workers $15 per hour is going to end badly for the city government, as well as the locals.

This is going to drive up the competition for unskilled labor. Metropolitan areas are notoriously connected places. I'm assuming there's highways and public transit leading to cities in all directions. If you lived in that metropolitan area, and you had to choose between working at McDonald's for $9.32 an hour (current Washington state minimum wage) or driving in commute traffic for the same job for $15 an hour, what would you do?

I feel bad for the youth of Seattle. It's about to become incredibly difficult to get their foot in the job market. And obviously the City of Seattle isn't going to fare much better either. With people commuting for jobs, it's going to siphon tax dollars into other communities.

For now though, it appears folks don't know what they're in for. One fast food worker who was interviewed, seemed to be convinced that this would “change her life”.
Phelps, 22, earns $9.47 per hour working for a McDonald's restaurant near downtown. She wants to move out of her mother's South Seattle home, and she wants to go back to school. She says those things could happen now that the city will have the nation's highest minimum wage.
"It's hard right now," she told USA TODAY hours before the midafternoon vote. "I have been trying to save up for school, but I just can't do it. This would mean a lot."
Again, assuming the dollar isn't abandoned as the world's currency by then, and assuming the cost of living hasn't continued on its current trend, what makes her think she'll even have a job? After all, large companies are taking notice of these fast food protests and talks of increasing the minimum wage. They appear poised to automate their services now more than ever.

The San Francisco robotics company Momentum Machines, has been developing a machine that could make these protests and wage demands a completely moot argument:
Capable of producing approximately 360 burgers an hour, the machine takes up only 24 square feet, allowing for more spacious seating areas and more time spent improving the overall dining experience.”
And that's only one example. Developed nations all over the world have already automated some of their fast food, and the United States has actually been down this road before. What are these socialists going to do? In ten years, is the City Council going to vote to outlaw automated fast food and vending machines? They should ask the Luddites how that went down for them.

The truth is, the minimum wage is a menace. Without it, there would be plenty of entry level jobs, and there would be plenty of work for people who lost their high paying jobs in this economy. Instead, Seattle has decided to make it illegal to get paid a certain amount of money (doesn't it sound silly when you phrase it that way?). In all likelihood, it will either kill employment in that city, make unskilled jobs too competitive, or force companies into a very difficult decision.

“Do I break the law and hire under the table, or do I automate?”

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1 comment:

  1. So lets all think of Seattle as a social experiment. Maybe with $15/hr worth of rope to hang themselves with, and the rest of the nation will take note *best case scenario.