Restaurants in Seattle Going Dark as $15 an Hour Minimum Wage Looms

A January 2015 working paper by two economists, Robert Pollin and Jeanette Wicks-Lim at the Political Economy Research Institute at the University of Massachusetts Amherst, claims that raising the minimum wage of fast food workers to $15 per hour .. would not necessarily result in “shedding jobs.”..

They further claim that a $15/hour minimum wage would not result in lower profits or the reallocation of funds away from other operations, such as marketing.

Really?  And the Titanic was unsinkable.  Proving something on paper with nothing of value at stake is not the same as risking your savings, labor and reputation by actually opening and running a restaurant or other business.   Once, just once, I’d like to see these ivory tower asshats prove their assertions by putting up their own money to open and run a business.  That did happen to the liberal politician George McGovern, A Politician’s Dream Is a Businessman’s Nightmare .

This column written by Mr. McGovern details his shock at the effects of the laws he helped write when he purchased an Inn and tried running that business under the those laws and regulations enacted by Federal agencies that he helped build.

“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.”

But why would the Seattle politicians do this if it is going to negatively effect so many of the small business owners in their district?   The reason for that is (again) the Unions.  So many of the labor agreements and contracts that they have managed to get written have clauses that automatically increase the wages of the union laborers a set percentage point above the local minimum wage.  Then the other union trades and classifications are set to rise to a higher level above the level below them.  So a cascade of hourly rate increases flow to the unions and a percentage of that will always find it’s way into the pockets of the politicians that started the progression.  Many of the actual poor fools that can only make the minimum wage will lose their jobs when the place they were working at either reduces headcount or closes their doors.  But neither the politicians or the unions give a damn about that.   Surprisingly?