Tag Archives: #Fightfor15

Shocker, not: UW study finds Seattle’s minimum wage is costing jobs

shocked face
From Seattle Times: Seattle’s minimum-wage law is boosting wages for a range of low-paid workers, but the law is causing those workers as a group to lose hours, and it’s also costing jobs, according to the latest study on the measure passed by the City Council in 2014.
The report, by members of the University of Washington team studying the law’s impacts for the city of Seattle, is being published Monday by a nonprofit think tank, the National Bureau of Economic Research.
That law raises Seattle’s minimum wage gradually until it reaches $15 for all by 2021.
The UW team published its first report last July on the impact of the first jump in Seattle’s minimum wage, which went in April 2015 from $9.47 to $10 or $11 an hour, depending on business size, benefits and tips.
This latest study from the UW team looks at the effects of both the first and second jumps. The second jump, in January 2016, raised the minimum wage to $10.50 to $13. (The minimum wage has since gone up again, to the current $11 to $15. It goes up again in January to $11.50 to $15.)
The team concluded that the second jump had a far greater impact, boosting pay in low-wage jobs by about 3 percent since 2014 but also resulting in a 9 percent reduction in hours worked in such jobs. That resulted in a 6 percent drop in what employers collectively pay — and what workers earn — for those low-wage jobs.
For an average low-wage worker in Seattle, that translates into a loss of about $125 per month per job.
“If you’re a low-skilled worker with one of those jobs, $125 a month is a sizable amount of money,” said Mark Long, a UW public-policy professor and one of the authors of the report. “It can be the difference between being able to pay your rent and not being able to pay your rent.”
The report also estimated that there are about 5,000 fewer low-wage jobs in the city than there would have been without the law.
The researchers focused on “low wage” jobs — those paying under $19 an hour — and not just “minimum wage” jobs, to account for the spillover effect of employers raising the pay of those making more than minimum wage.
For instance, an employer who raised the pay of the lowest -aid workers to $13 from $11 may have then given those making $14 a boost to $14.50. (The team had also tested lower- and higher-wage thresholds for the study, and the results did not change, members said.)
To try to isolate the effects of the minimum-wage law from other factors, the UW team built a “synthetic” Seattle statistical model, aggregating areas outside King County but within the state that had previously shown numbers and trends similar to Seattle’s labor market.
The researchers then compared what happened in the real Seattle from June 2014 through September 2016 to what happened in the synthetic Seattle.
In addition to earnings, the report analyzes data on work hours— relatively rare in minimum-wage studies, the researchers said, since Washington is one of only four states that collects quarterly data on both hours and earnings.
Other studies on minimum wage have typically used lower-wage industries, such as the restaurant sector, or lower-paid groups such as teenagers, as proxies to get at employment, they said.
That was the case with a University of California, Berkeley study released last week that found Seattle’s minimum-wage law led to higher pay for restaurant workers without costing jobs in 2015 and 2016.
The UW team’s study actually corroborates the Berkeley conclusion, finding zero impact from the minimum-wage law on restaurant employment — when taking into account jobs at all wage levels within the restaurant industry.
But the UW researchers did conclude that, for low-wage restaurant workers, the law cost them work hours. (Specifically, though the actual number of hours worked by low-wage restaurant workers in Seattle increased a slight 0.1 percent from the second quarters of 2014 to 2016, the researchers’ “synthetic Seattle” model showed that if the minimum wage law hadn’t been in effect, there would have been an 11.1 percent increase in hours for those workers.)
Michael Reich, a UC Berkeley economics professor who was lead author on the Berkeley report, said he found the UW team’s report not credible for a number of reasons.
He said the UW researchers’ “synthetic” Seattle model draws only from areas in Washington that are nothing like Seattle, and the report excludes multisite businesses, which employ a large percentage of Seattle’s low-paid workforce. The latter fact was also problematic, he said, because that meant workers who left single-site businesses to work at multisite businesses were counted as job losses, not job gains in the UW study.
Reich also thought the $19 threshold was too low, and he said the UW researchers’ report “finds an unprecedented impact of wage increases on jobs, ten times more than in hundreds of minimum wage and non-minimum wage studies. … “There is no reason,” he said, that Seattle’s employers of low-paid workers “should be so much more sensitive to wage increases.”
Jacob Vigdor, a UW public policy professor and one of the authors of the UW report, stood by the team’s findings.
“When we perform the exact same analysis as the Berkeley team, we match their results, which is inconsistent with the notion that our methods create bias,” he said.
He acknowledged, and the report also says, that the study excludes multisite businesses, which include large corporations and restaurants and retail stores that own their branches directly. Single-site businesses, though — which are counted in the report — could include franchise locations that are owned separately from their corporate headquarters. Vigdor said multisite businesses were actually more likely to report staff cutbacks.
As to the substantial impact on jobs that the UW researchers found, Vigdor said: “We are concerned that it is flaws in prior studies … that have masked these responses. The fact that we find zero employment effects when using methods common in prior studies — just as those studies do — amplifies these concerns.”
He added that “Seattle’s substantial minimum-wage increase — a 37 percent rise over nine months on top of what was then the nation’s highest state minimum wage — may have induced a stronger response than the events studied in prior research.”
As to how the UW team’s findings jibe with the Seattle area’s very low unemployment rate, tight labor market, and anecdotes from hospitality employers desperately seeking low-wage workers, Vigdor said that, based on data and what he’s hearing from employers, businesses are looking to hire those with more experience.
“Traditionally, a high proportion of workers in the low-wage market are not experienced at all: teens with their first jobs, immigrants with their first jobs here,” he said. “Data is pointing to: Since we have to pay more, employers are looking for people with experience who can do the job from Day 1.”
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Illinois dems aim high with minimum wage proposals

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The future of Illinois…


Despite this proposal stalling, I guess this is one way the demorats can prove they aren’t out of touch with their supporters.
From MyFoxChicago (AP): Amid a national push by unions and worker advocates for a $15 minimum wage, Illinois Democrats hope to pass an ambitious hike during the spring legislative session, despite a warning from Republican Gov. Bruce Rauner that he opposes an increase of any kind.
The proposal would lift the state’s minimum wage from its current $8.25 to $15 over the next five years, a more accelerated leap than previous adjustments in Illinois. It also would constitute a larger jump than increases toward $15 approved last year in New York and California, where the rates had been $9 and $10, respectively.
But, as with previous efforts in Illinois, the measure is likely to be tied up in the state’s electoral politics.
Sponsors of the legislation acknowledge Rauner’s opposition but have signaled they want to force him to act on the measure ahead of next year’s gubernatorial election, in which he already faces half a dozen Democratic challengers.
“We will get a really good opportunity to see where the governor stands,” said Rep. Will Guzzardi, a Chicago Democrat sponsoring the wage bill in the House. “Does he side with the 2.3 million people in this state who need a raise now or does he side with the big corporations?”
In the past, Rauner has said he supported minor increases in the minimum wage. But he told the audience at a business forum on April 13 that requiring employers to raise pay is out of the question. “That’s not gonna happen,” Rauner said. “Companies will just leave.”
Democrats say they have considerable support for the $15-per-hour measure in the House, and expect a floor vote in May. The Senate is also considering two minimum wage bills, one similar to Guzzardi’s and a less ambitious one that would raise the wage to $11 by 2021.
In 2014, Democrats placed an advisory referendum on the Illinois ballot asking voters whether they supported a minimum wage increase in an effort to motivate their base to go to the polls. The referendum secured 67% of the vote in the same election that Rauner won his first term in office. During the campaign, Rauner was criticized by his rival, former Gov. Pat Quinn, for statements supporting a reduction of the minimum wage.
Illinois has raised its minimum wage above the federal floor, currently $7.25 per hour, twice in recent history – first in 2003 and again in 2006 to $8.25, where it’s remained since 2011. That leaves Illinois with a lower rate than 20 others nationwide, but above every state it borders.
Business leaders claim increasing the rate puts Illinois at a competitive disadvantage, driving companies across state lines or forcing them to reduce staff. Labor unions and other allies of the national “Fight for $15” campaign contend raising the minimum wage boosts the economy by putting more money into pockets of low-wage workers, decreasing reliance on government assistance.
Advocates say anything less than $15 falls far short of the cost of living for millions of Illinoisans. They point to research including a 2016 report from the University of Illinois that shows at least 34 percent of Illinois workers earn less than $15 an hour, many of them while helping to support a family.
The report projects an increase to $15 would result in just a 0.78 percent employment decline while yielding an extra $2.4 billion in tax revenue.
Robert Bruno, a professor of labor relations at the university who co-authored the report, said research on previous increases indicates companies are able to recoup additional labor costs by raising prices a few cents on the dollar and benefit from enhanced worker productivity and purchasing power.
Some business organizations, including the Illinois Chamber of Commerce, oppose any increase above federal levels. Others, like the Illinois Restaurant Association, are willing to consider a more incremental adjustment – something some economics experts also recommend, warning against potential job loss resulting from more substantial leaps.
Sen. Kimberly Lightford of Maywood, the Democrat sponsoring both Senate proposals, has been advocating for a higher rate since 1999 when she first proposed what became Illinois’ 2003 increase. She said if the federal minimum had risen with inflation since its peak in 1968, it would be $11 today. “I cannot sit back and allow millions of working people to receive no wage increase at all because it could not be the $15,” she said.
The bills are HB198, SB1738 and SB2.
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Wendy's plans self-ordering kiosks at 1,000 locations

15-an-hour
Via Business Insider: Wendy’s says it plans to install self-ordering kiosks at about 1,000 locations by the end of the year.  A typical location would have three kiosks, The Columbus Dispatch reported. Higher-volume restaurants will be given priority for the kiosks.
Wendy’s chief information officer, David Trimm, said the kiosks are intended to appeal to younger customers and reduce labor costs. Kiosks also allow customers of the fast food giant to circumvent long lines during peak dining hours while increasing kitchen production.  Trim estimates the company will see a return on its investment in less than two years.
They are looking to improve their automation and their labor costs, and this is a good way to do it,” said Darren Tristano, vice president with Technomic, a food-service research and consulting firm. “They are also trying to enhance the customer experience. Younger customers prefer to use a kiosk.
Kiosks are also valued by the Dublin, Ohio-based company for their ability to provide data about customers.  “This move puts them at the forefront of the kiosk and tech movement,” Tristano said.  Kiosks already have been installed at several central Ohio locations, where the company first tested the technology.
Customers will still be able to order at the counter for now, although Tristano predicts that mobile ordering and payment via smartphones will one day overtake self-ordering kiosks and cash registers.
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Seattle socialist council member not happy with UW researchers study of impact of $15 minimum-wage law

Remember, Kshama Sawant is a socialist. That leads me to question her objectivity.
sawant
From Seattle Times: Seattle City Councilmember Kshama Sawant is raising concerns about city-commissioned research into Seattle’s landmark minimum-wage law and about public comments by one of the University of Washington professors leading the effort.
Professor Jacob Vigdor and other members of the UW team, who in July published a preliminary report on the impact of the law, are defending their work and saying they don’t control how their comments are presented in the media.

Professor Jacob Vigdor

Professor Jacob Vigdor


The report said Seattle’s labor market thrived after the city became the first major metropolis in the country to enact a law setting its minimum wage on a multiyear path to $15 per hour. It said much of that success can be attributed to trends separate from the law itself, such as the growth of Seattle’s tech sector.
Why all the fuss about a group of number crunchers and their study, which is scheduled to continue for five years? People across the country — including pundits and activists on both sides of the political spectrum — are closely watching what happens in Seattle as they debate whether to raise minimum wages in their own cities and states, and nationwide.
“I’m not only concerned that we’re in danger of drawing erroneous conclusions about Seattle’s minimum-wage increase — I’m concerned about the consequences that could have on the nationwide fight for $15 (per hour),” said Sawant, who holds a doctorate in economics and was an instructor at Seattle Central College before winning office.
In a letter addressed to Vigdor on Tuesday, Sawant questioned the study’s methodology and Vigdor’s objectivity. On the first issue, she attacked the “synthetic Seattle” statistical model that the UW team used to prepare the report.
Socialist Kshama Sawant dares to question someone else's "objectivity"

Socialist Kshama Sawant dares to question someone else’s “objectivity”


To try to isolate the impact of the minimum-wage law from other conditions, the team aggregated ZIP codes from outside the city that had previously shown data and trends similar to ZIP codes inside the city. The team compared what happened in real Seattle from June 2014 through December 2015 to what happened in synthetic Seattle.
“I have strong reservations about the relevance of a model built on geographically and demographically distant ZIP codes,” rather than on ZIP codes just outside the city’s borders, Sawant wrote. She faulted the researchers on other academic grounds, as well, saying they failed to adjust for seasonality and to include chain businesses in the study, for example.
Sawant also went after Vigdor’s comments in the media. “Wages, jobs, hours worked and net business openings all increased in Seattle. Yet you chose to emphasize to the press that employment rates and hours worked went down compared to the fictional synthetic Seattle,” she wrote. “It is professionally irresponsible to draw such a conclusion from the data at this time.” To conclude, Sawant wrote, “Your methodological shortcomings and ideological editorializing undermine the credibility of the report.”
In a letter replying to Sawant on Tuesday, Vigdor and 10 other UW researchers, including several professors, said their work is a collective project.
“The research products generated by the minimum-wage study team are the work of all team members and not one member,” they wrote. “The entire team has participated in discussion around research design, analysis, interpretation and presentation of results. We have taken great care to discuss where we find the evidence most compelling and where we are most uncertain. We believe our report reflects this care and caution.”
The synthetic Seattle approach has been used before for minimum-wage research and is a good approach for various reasons, the team wrote. And besides, the July report had an appendix with the approach Sawant prefers. “None of the conclusions reached in our report are contradicted” by the use of that alternate approach, the team’s letter said.
The researchers admitted to some methodological challenges. But, they wrote, “In the end, we believe that every question or criticism raised in your letter reflects information fully disclosed and discussed in the report itself.”
With regard to Vigdor’s objectivity and comments, the team noted, “Our work product is a public document, subject to partisan interpretation,” and said parts of the report have been used to promote both positive and negative views of Seattle’s law.
The researchers said their comments in the media can be taken out of context. But they said the stories about the July report that have been most misleading have been those written by people who didn’t speak to the team.
In an interview, Vigdor insisted that he’s playing it straight. “We have no ideological commitment,” he said. “We may appear as though we have some ideological slant because we’re not reliably agreeing with anybody.”
The former Duke University professor is an adjunct fellow at the conservative Manhattan Institute and a onetime visiting scholar at the right-leaning American Enterprise Institute. He said that he recently spoke out against American Enterprise Institute scholar Mark Perry’s criticism of Seattle’s minimum-wage law.
“Our entire team is troubled by the high and persistent degree of income inequality in the United States and believe our nation has a moral responsibility to ensure that the fruits of our prosperity are shared equitably,” the UW letter said.
“We are committed to producing objective and rigorous research, however, regardless of our individual preferences or concerns.”
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Minimum-wage increase sinks Roseville bookstore, owner says

Yeah, #Fightfor15!
fight for 15
From Sacramento Bee: Bibliophile Kelley Ulmer closed her Almost Perfect Book Store on Wednesday after 25 years of business at Rocky Ridge Drive and Douglas Boulevard in Roseville, saying that the added expense from minimum-wage increases had made it impossible for her to continue operating.
“We used to joke that this was like the Hotel California: Once you got here, you’d never leave,” Ulmer said. “And realistically, it wasn’t a bad deal prior to the ever-increasing minimum wage. I had a profit-share with my employees, so at the end of the week, when they got their paychecks, whatever money didn’t go toward bills or whatever, I shared with them. They actually made more money at $7 an hour than they make at $10.
Small, independent bookstores have faced a huge challenge since Amazon.com rose to prominence in the late 1990s, brick-and-mortar chains consolidated to compete with the online colossus, and some used bookstores migrated to the web to be able to offer deep discounts. But a study by the Booksellers Association, a trade group for the U.K.’s independent booksellers, showed that the number of indie U.S. bookstores actually has grown by 27 percent since 2009. While Ulmer and other U.S. independents continue to decry tax incentives given to Amazon, a wave of minimum-wage increases nationwide has prompted the American Booksellers Association to make this topic the top item on its page listing small business issues.
Several customers stood outside the rambling used bookstore, which boasted 7,400 square feet of space, before it opened Wednesday morning. Ulmer was selling all books for a quarter, 27 cents with tax, as she told one customer. Her store is not affiliated with the store of the same name in Elk Grove, although each received a startup investment from the same investor.
Laura Laskowski, a customer of 22 years who became one of Ulmer’s best friends, dropped off cookies to cheer up the staff. She recalled Almost Perfect’s early days, when it had a much higher checkout counter. Customers began calling themselves “leaners” because they would lean against the fixture and talk for hours.
“Every book lover cherished that store,” Laskowski said. “I can’t prove it, but I suspect that for most people the first glance – used books as far as the eye could see – was accompanied by harp music.”
Ulmer said customers – and her daughters Stephanie and Victoria – have moved her to tears as she has prepared to close up shop, and she struggled to hold her composure as she shared their comments and stories with me. Victoria, who’s 17, told her: “Mom, you had a life before the bookstore. Stephanie and I never have.”
Ulmer’s six employees have worked for her for 10 years or more. Jeffrey “Scott” Singley, who has worked there for 24 years, said that he’s still in shock over the closure and that he’s angry with lawmakers. “I’m going to take advantage of the government’s largesse since they put me in this position, so it’s unemployment as of tomorrow,” he said. “Or, at least I’m going to file as of tomorrow.”
Read the whole story here.
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Shocker! More Seattle restaurants close doors as $15 minimum wage approaches

ShiftWA.org: Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”

Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36% of restaurant earnings go to paying labor costs.” Seattle Magazine,

“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”

“He estimates that a common budget breakdown among sustaining Seattle restaurants so far has been the following: 36 percent of funds are devoted to labor, 30 percent to food costs and 30 percent go to everything else (all other operational costs).  The remaining 4 percent has been the profit margin, and as a result, in a $700,000 restaurant, he estimates that the average restauranteur in Seattle has been making $28,000 a year.

“With the minimum wage spike, however, he says that if restaurant owners made no changes, the labor cost in quick service restaurants would rise to 42 percent and in full service restaurants to 47 percent.”

Restaurant owners, expecting to operate on thinner margins, have tried to adapt in several ways including “higher menu prices, cheaper, lower-quality ingredients, reduced opening times, and cutting work hours and firing workers,” according to The Seattle Times and Seattle Eater magazine. As the Washington Policy Center points out, when these strategies are not enough, businesses close, “workers lose their jobs and the neighborhood loses a prized amenity.”

A spokesman for the Washington Restaurant Association told the Washington Policy Center, “Every [restaurant] operator I’m talking to is in panic mode, trying to figure out what the new world will look like… Seattle is the first city in this thing and everyone’s watching, asking how is this going to change?” The Washington Policy Center,

“Seattle is rightly famous for great neighborhood restaurants.  That won’t change.  What will change is that fewer people will be able to afford to dine out, and as a result there will be fewer great restaurants to enjoy.  People probably won’t notice when some restaurant workers lose their jobs, but as prices rise and some neighborhood businesses close, the quality of life in urban Seattle will become a little bit poorer.”

And the socialist council member that adores this? Kshama Sawant. She ran on a platform of anti-capitalism, workers’ rights, and a $15 per-hour minimum wage for Seattle workers. In November 2013, she spoke to supporters of Boeing Machinists, six days after they rejected a contract guaranteeing jobs in Everett building the new 777X airliner for eight years, in exchange for new workers giving up their guaranteed company pensions.

Boeing threatened to take those jobs to other states. She said, “That will be nothing short of economic terrorism because it’s going to devastate the state’s economy,” she said.

Sawant called for machinists to literally take-possession of the Everett airplane-building factory, if Boeing moves out. She called that “democratic ownership.”

Sawant said after workers “take-over” the Everett Boeing plant; they could build things everyone can use. “We can re-tool the machines to produce mass transit like buses, instead of destructive, you know, war machines,” she told KIRO 7.

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