Sunday, March 13, 2016

$15 Minimum Wage Craters Seattle Employment

by JASmius

Sure, everybody supports the concept of a "living wage" in principle. Everybody also supports the concept of everybody being rich, and good-looking, and being able to gorge themselves on cheeseburgers and Haagan-Das without gaining an ounce, and all manner of other fantasies that are impossibilities in the real world - in principle. Which obviously doesn't include San Francisco, and Seattle, and every other locality that imposes massive labor cost increases on its business community like they have money trees and magic wands "in the back" with which to miraculously pay for it all. And then they'll turn all the water into wine for an encore.

- Me, thirteen months ago

Looks like my local metropolis has their magic wands in the shop - or would have if the $15 minimum wage hadn't forced it to close its doors:

Seattle passed its $15 law in June 2014. Starting last April, it raised the minimum from $9.32 (the State minimum wage) to $10 for certain business, $11 for others.

Increases to $12, $12.50 and $13 an hour began taking effect for most employers this January 1st. The jumps will continue until the minimum hits the full $15 an hour in 2017 for some before it’s universal in 2019.

Yet even the early impact is harsh.

The AEI study, worked up from Bureau of Labor Statistics’ monthly surveys, shows that, between April and December last year, Seattle saw the biggest employment drop in any nine-month period since 2009 — a full year into the [Obama Depr]ession.

The city unemployment rate rose a full percentage point.

Before the minimum-wage hikes begin, Seattle employment tracked the rest of the nation — slowly rising from the 2008-09 bottom. But it started to plunge last spring, as the new law began to kick in.

Furthermore, Seattle’s loss of ten thousand jobs in just the three months of September, October and November was a record for any three-month period dating back to 1990.

Meanwhile, employment outside the city limits — which had long tracked the rate in Seattle proper — was soaring by 57,000 and set a new record high that November. [emphases added]

No, economics is not a "hard" science; it is the only branch of psychology that can be quantified.  It measures the results of human nature in terms of dollars and cents.  The first rule of human nature is that we are all self-centered.  That self-centeredness can be channeled in constructive and productive directions through the competition of the free market, incentivizing hard work and risk-taking and productivity and honesty and integrity, or it can be flushed down the commode of liberal-left statism by glorifying envy and inciting greedy divisiveness and indulging the fantasy that government can bluntly intervene in and grotesquely distort and oppress the private sector with absolutely no adverse impact and without triggering protective and defensive reactions from and within it.

In the case of Seattle's skyrocketing minimum wage mandate, that reaction was to export ten thousand entry level jobs to the Emerald City's suburbs and outside of Seattle proper.  And the only reason that was possible was because there was, legally, some place for those jobs to go.  If the State of Washington - which is scarcely any less "blue" over all than Seattle is - were to impose the same mandate at the State level, as New York is threatening to do, those and many other jobs would be exported to Idaho and maybe Oregon, though it's ruled by the same corrosive "blue State" mentality.

The bottom line truth is as it ever was and always will be: TANSTAAFL.  "There ain't no such thing as a free lunch".  Entry-level jobs do not pay a "living family wage" because they're not supposed to.  That's why they're called "entry-level".  The market (to the degree that it's allowed to) determines what the labor of each job is worth.  These days my son earns minimum wage as a waiter.  Do you think he'll be in that job for the rest of his life?  God, I hope not.  He'll move on to bigger and better things and his rate of remuneration will rise accordingly.  When I started my accounting career in 1987, you know what I made on an hourly basis?  A little over five bucks - and that was as a college graduate.  You know where my income was twenty-six years later when that career was destroyed?  Almost eight times that level.  Was I trying to support a wife and kids on five bucks an hour?  HELL, no.  Because I was raised with a work ethic, honesty, integrity, common sense, and without an entitlement mentality, and consequently did things in the right order, didn't have infantilely unrealistic expectations, and didn't think that everybody else owed me a living.

It's a pity my son doesn't do his waiting in Seattle.  That way I could live off of him for a change, because he'd probably be a waiter for the rest of his life.  Assuming he could find an opening anywhere within the city limits.

Exit thought: I haven't been to a Seahawk game at Century Link Field in over three years.  Concessions must be a bitch there now.

No comments: