#RaiseTheWage: Seattle businesses push back against minimum wage increase

**Posted by Phineas

Depression-era unemployment

But at least we raised the minimum wage!

Rick Moran at PJMedia has an article up about an effort on the part of Seattle business owners to get a measure on the ballot that would roll back the city’s recently passed $15 per hour minimum wage to a more “reasonable” $12.50. You can go there to get the details (there are accusations of fraud in the petitions to get the measure on the ballot), but here is a portion in which a Seattle business owner describes the very real impact raising the minimum wage has on his and other businesses:

That favorite coffee shop that you go to? That great neighborhood restaurant? That store where you buy your books, pet food, art supplies, or clothes? Each of those businesses survives on around a 5 percent net profit margin. That means that at the end of the year, after all the expenses—the payroll, the supplies, the inventory, insurance, rent, etc.—we all will end up with only about 5 percent income in our pockets if we’re doing a half-decent job. Maybe a bit more, maybe a bit less—but you get the idea. This does not leave a small local business with much room to absorb even a small increase in costs, much less the 60 percent increase demanded by the well-meaning but ill-researched and biased reporters and neighbors involved in this discussion.

Here are some more boring facts:

Payroll is approximately 30 percent of my entire costs at Liberty, the bar I own (the average in this business seems to be 30 to 35 percent). If the minimum wage goes up to $12.50 an hour (a reasonable middle ground some have proposed), that would be an increase of 34 percent, which means just to stay even I’d have to raise prices 10 percent across the board—the labor’s percentage increase in total cost to operate Liberty.

If the minimum wage goes to $15 an hour, I’d have to raise my contribution to payroll by 18 percent. So my costs would have to rise by no less than 18 percent, just for payroll—and that’s before my vendors’ increases in costs have to be considered, which I believe will be around another 5 percent, and that’s before Liberty adds any profit.

So it’s not impossible to imagine that costs for business like mine in Seattle will go up by no less than 20 percent.

Those increases are way more than my income. Again, my profit is around 5 percent. And it’s not just me, that’s across the board—for restaurants, for bars, for clothing stores, for pet stores, for art supply stores—many of whom have set costs and are competing with online retail. This makes it very difficult for them to adjust their purchasing.

So, what are this business owner’s options? That’s his problem, not the Seattle city council’s.

Thomas Sowell has often observed that politicians almost never feel the economic consequences of the decisions they force on the rest of us. While they’re buying their way to reelection by handing out goodies and making themselves feel good by supposedly “fighting for the people,” someone else has to pay the cost — in this case, the businessman who takes less profit, the worker who gets fewer hours, or the consumer who pays higher prices.

I left a comment to Moran’s post and I want to share part of it here. It’s anecdotal, but I think it illustrates the very real effects of politicians thinking they can ignore the laws of economics:

A friend supervises minimum wage, hourly employees in an educational setting. Our minimum wage [in California] has just gone up to $9 per hour. She has told me that she knows for a fact her budget for hiring will not increase, so she has to cut employee hours and, perhaps, eliminate a couple of jobs. Now, someone explain to me again how this increase actually helped these workers? But it sure made the pols in Sacramento feel good about themselves.

Those employees are student workers, often from minority groups, who work to help pay their way through school. And they are very real victims of progressives’ “good intentions.”

(Crossposted at Public Secrets)

Obama minimum wage edict leads to job losses at military bases

**Posted by Phineas

Depression-era unemployment

“But at least we won the election! Obama!!”

Democrats and their Leftist allies are desperate to find any issue to run on in the coming elections, other than Obamacare. One of their tactics has been to try to gin up class warfare based on raising the minimum wage. They argue that it will help the poor, raise living standards, and, of course, be more “fair.” Republicans, conservatives, and libertarians, on the other hand, contend that increasing the cost of labor will only mean higher prices to the consumer, fewer jobs for the marginally skilled, and be particularly harmful to minorities. This video is a good example of how minimum wage laws kill jobs.

Needless to say, I come down on the side of those opposed to the Democrats’ demands for a minimum wage increase. But honest, intelligent people (1) can reasonably disagree.  To help solve this disagreement, a real-world, real-time example would be nice. Fortunately (or unfortunately, as the case may be), we have one. As Byron York reports in The Washington Examiner, President Obama’s edict raising the minimum wage for federal contract employees on military bases is leading to the closure of fast-food restaurants on those bases, thus costing jobs:

Obama’s order does not take effect until January 1, 2015. But there are signs it is already having an effect — and it is not what the president and his party said it would be.

In late March, the publication Military Times reported that three McDonald’s fast-food restaurants, plus one other lesser-known food outlet, will soon close at Navy bases, while other national-name chains have “asked to be released from their Army and Air Force Exchange Service contracts to operate fast-food restaurants at two other installations.”

Military Times quoted sources saying the closures are related to the coming mandatory wage increases, with one source saying they are “the tip of the iceberg.”

And increasing the minimum wage isn’t the only way Washington is increasing the cost of labor:

The administration is making it very expensive to do business on military bases, and not just because of the minimum wage. Under federal contracting law, some businesses operating on military installations must also pay their workers something called a health and welfare payment, which last year was $2.56 an hour but which the administration has now raised to $3.81 an hour.

In the past, fast-food employers did not have to pay the health and welfare payment, but last fall the Obama Labor Department ruled that they must. So add $3.81 per hour, per employee to the employers’ cost. And then add Obama’s $2.85 an hour increase in the minimum wage. Together, employers are looking at paying $6.66 (2) more per hour, per employee. That’s a back-breaking burden. (Just for good measure, the administration also demanded such employers provide paid holidays and vacation time.)

As I wrote above, the natural business response to this is to either raise prices for the consumer, or cut back on employee hours — or cut jobs altogether. Well, guess what? York reports that military contracts do not allow the businesses to raise their prices above what’s common in the outside community. So, even though Obama is raising wages well above the prevailing standard, employers are forbidden to recoup their costs. What does that leave?

Closing the business altogether.

If there’s no chance for profit, why stay open? When you add up the numbers for all four major services, we’re looking at potentially 10,000 jobs going up in smoke. Not to mention the ripple effect in the outside communities.

Here we have a current, ongoing example of how raising the minimum wage harms people by killing jobs. (3) How then, is the Democratic proposal a good idea?

I’m waiting. smiley well I'm waiting

 

Footnote:
(1) Thus excluding Democratic pols and activists.
(2) How fitting.
(3) Yes, military contract law made the situation worse by forbidding compensatory price increases. So, increasing costs for the consumer –including minimum wage earners!– is a good thing? And what’s to say the Obama administration, if they got their way on the minimum wage, wouldn’t try to extend price controls when the inevitable complaints arose? We are talking dyed-in-the-wool statists, after all. One bad policy, raising the minimum wage, inevitably leads to more bad policy. Just look at the history to-date of Obamacare.

(Crossposted at Public Secrets)

Socialist French government finds there really is such a thing as being “overtaxed”

Via the UK Telegraph comes a report that France’s Socialist government, famous for burdening their “rich” with extraordinarily high taxs, have come to the conclusion that they can’t tax their people (the rich and middle class) anymore without bleeding them dry (via Memeorandum) :

France’s Socialist government has admitted that the country cannot cope with any further tax rises and promised no more hikes just days ahead of the country’s largest ever tax bill.

In an unfortunate piece of timing, however, the pledge came just as the environment minister announced the creation of a new “carbon tax” and amid reports that the overall tax pressure on French households will rise even further next year.

Returning from their summer break, the French are about to discover stinging rises in tax bills in their letter boxes – the result of a series of new levies enacted by President François Hollande as he seeks to plug the French deficit and bring down public debt – now riding at 92 per cent of GDP.

But the extent of the hikes has apparently even shocked the very Socialist ministers who implemented them.

The total tax pressure (taxes and social security contributions) will account for 46.3 per cent of GDP this year – a historic high – compared to 45 per cent in 2012.

Some 16 million households will see an automatic 2 per cent rise in income tax as calculations are no longer mitigated by inflation. Family tax breaks will be cut.

The rich will see the highest rises, following Mr Hollande’s decision to raise the rate to 45 per cent for those earning more than 150,000 euros – effectively 49 per cent due to an additional levy.

Amid discontent at the forthcoming rises, Jean-François Copé, head of the opposition Right-wing UMP party today pledged to enact “massive tax cuts” and to slash state spending by ten per cent should his party win power in 2017.

In a clear damage limitation exercise, a chorus of top Socialists spoke out against any more rises.

Pierre Mosovici, the finance minister, told France Inter radio: “I’m very sensitive to the French getting fed up with taxes We are listening to them.” Laurent Fabius, the foreign minister followed suit, warning Mr Hollande to be “very, very careful” as “there’s a level above which we shouldn’t climb”.

One Socialist told Les Echos newspaper that the hand-wringing was totally hypocritical as “they are crying wolf, but the wolf is us.”

The topic was top of the agenda at the Socialists’ annual “summer university”, which opened today , and where Ségolène Royal, Mr Hollande’s former partner, called for a “moratorium on new taxes.” Even more categorical was Bruno Le Roux, Socialist leader in the National Assembly, who declared: “There will be no new taxes” for the rest of Mr Hollande’s five-year mandate.

I’d like to think Socialists somewhere (in this case, France) have finally had their wake up call on how high taxes stifle growth by cutting off job creators and potential workers at the knees, but we know they haven’t.   As PJ Tatler’s Rick Moran notes:

Jeez, what a bunch of hypocrites. They stick it to the people least able to absorb a tax hike without a decline in their standard of living, and then declare a de facto moratorium on tax hikes — at least until they think they can get away with more tax increases politically.

The net result of the tax increases will be slower growth, which, considering all the new spending that Hollande has proposed probably means the deficit will go up, rather than shrink. The French president was one of the biggest boosters in Europe of getting rid of “austerity” budgets, so now we’ll see just how “Hollandonomics” plays out in the real economy.

Sound familiar?

Overtaxed

Will the American left soon come to the same conclusions when it comes to overtaxing? Don’t count on it!

And these are the people who are teaching our children, shaping our future.

**Posted by Phineas

My blog-buddy ST featured this in her Hot Headlines section yesterday, but I thought it deserved front-page treatment. This video, narrated by wealthy Leftist actor Ed Asner, teaches nothing but class warfare and shows the rich urinating on the poor:

(Note: Since it first came to public notice yesterday, the video has been made private. I guess the California Teachers Union didn’t want us to know what they really think of those who disagree with them.)

EAG News, which first reported the video, describes it this way:

A new video produced by the California Federation of Teachers – which could be playing in your child’s classroom as we speak – drums up the typical class warfare images we’ve come to expect from Big Labor.

“Tax the Rich: An Animated Fairy Tale,” written by CFT staffer Fred Glass (2011 compensation: $139,800) and narrated by proud leftist actor (and 1 percenter) Ed Asner, advocates for higher taxes on the “rich” as the cure for government’s insatiable thirst for spending.

The video claims the rich got rich through tax cuts and tax loopholes and even tax evasion.

But when the 99 percent fought back, the “rich” apparently urinated on the “poor,” at least according to the video. What a classy way to frame your argument for children, Big Labor.

EAG News chronicles the factual errors in the video, but PJM’s Bryan Preston cuts to the heart of the matter:

The video never deals with the fact that the top one percent of wage earners in the United States pay about 33% of all the income taxes, and the top five percent pay more than half of all the taxes. The poor reasoning and dishonesty in the video are made worse by the fact that it was created, evidently, by teachers. By the people who are educating your children and mine.

And California voters, via Prop 32, just voted to give these yahoos more money, in the form of dues take from teachers’ salaries, which are paid for by our taxes. Too bad this didn’t come out before the election.

Meanwhile, this shows how hard the battle to reform the culture will be, when our teacher training programs are turning out “educators” who could have worked as propagandists for the Comintern.

(Crossposted at Public Secrets)

Go ahead, Democrats, embrace the Occupy movement

**Posted by Phineas

You know you want to; it’s so edgy, so sexy, so… progressive. It makes you feel young again, doesn’t it? Takes you back to the 60s or the 80s, when you were going to change the world; when, with enough will and fervor (and Acapulco gold), you could defy reality and turn the world into one large anarcho-socialist nirvana. Free health care, free love, free stuff… You were gonna have it all.

Oh, it didn’t work out so well before, but that was then. Now’s different! Now is your time! Give in to your inner Statist, unleash the Socialist within! The rest of the nation is with you!

Or, maybe not:

Yet the Occupy Wall Street movement reflects values that are dangerously out of touch with the broad mass of the American people—and particularly with swing voters who are largely independent and have been trending away from the president since the debate over health-care reform.

(…)

Our research shows clearly that the movement doesn’t represent unemployed America and is not ideologically diverse. Rather, it comprises an unrepresentative segment of the electorate that believes in radical redistribution of wealth, civil disobedience and, in some instances, violence. Half (52%) have participated in a political movement before, virtually all (98%) say they would support civil disobedience to achieve their goals, and nearly one-third (31%) would support violence to advance their agenda.

The vast majority of demonstrators are actually employed, and the proportion of protesters unemployed (15%) is within single digits of the national unemployment rate (9.1%).

(…)

What binds a large majority of the protesters together—regardless of age, socioeconomic status or education—is a deep commitment to left-wing policies: opposition to free-market capitalism and support for radical redistribution of wealth, intense regulation of the private sector, and protectionist policies to keep American jobs from going overseas.

Sixty-five percent say that government has a moral responsibility to guarantee all citizens access to affordable health care, a college education, and a secure retirement—no matter the cost. By a large margin (77%-22%), they support raising taxes on the wealthiest Americans, but 58% oppose raising taxes for everybody, with only 36% in favor. And by a close margin, protesters are divided on whether the bank bailouts were necessary (49%) or unnecessary (51%).

Thus Occupy Wall Street is a group of engaged progressives who are disillusioned with the capitalist system and have a distinct activist orientation. Among the general public, by contrast, 41% of Americans self-identify as conservative, 36% as moderate, and only 21% as liberal. That’s why the Obama-Pelosi embrace of the movement could prove catastrophic for their party.

The author, Doug Schoen, is a Democrat pollster who worked for Bill Clinton. Read the whole thing; it sounds like someone on his knees begging a loved one not to do something monumentally stupid.

I, on the other hand, being of the firm belief that Nemesis always follows Hubris, encourage Obama, the Democratic Party, and their Big Labor and MSM allies to hold the Occupy movement close and never let it go. Give in. Live in the now. Do what feels good.

Because this time just has to be different.

via JustOneMinute

(Crossposted at Public Secrets)

The Democratic Party: the party of class and race war?

**Posted by Phineas

I want you to look at two videos, both from Naked Emperor News (1), that illustrate the intellectual bankruptcy and political desperation of what passes for leadership in the modern Democratic Party. Not the average, working- and middle-class rank and file member who’s been a lifetime registered Democrat out of habit, but the career leftist pols who’ve risen to the top thanks to a pernicious combination of seniority and safe districts.

First we have Nancy Pelosi (whose San Francisco idol was avowed Stalinist Harry Bridges) offering an unusual motive on the part of those who oppose economic redistribution and advocate lower taxes: they’re the filthy rich who want immortality!

(via Pirate’s Cove)

Okay, okay. So, she’s talking about “immortality” through getting buildings named after them. It’s still bunkum. Not only are the most vociferous advocates of federal restraint and tax reform not among the filthy rich (2), but, in my experience, most of the money that buys names on buildings comes from rich liberal donors. And what about all the wealthy liberals just screaming for higher taxes, such as Warren Buffet or Stephen King? Are they conspiring for immortality at the expense of the poor and downtrodden, too, Nancy? Do all wealthy people look alike to you?

Oh, and while we’re at it, how goes your own search for life eternal? I mean, you are worth $35 million, after all…

Even more bizarre, however, is her attack on those opposed to raising the minimum wage: it’s all a conspiracy meant to make people dependent on private credit companies and lenders!! Seriously, Nancy? Are you actually arguing that, if we only kept making the minimum wage higher, people wouldn’t need to use credit cards or take out a loan to buy a car? Just how high a “minimum wage” do you envision, O Former Speaker, and what level of taxation do you think would be needed to support it?

Just how much of your $35 million are you willing to give up to save the counter-person at McDonald’s from the evils of the private credit market?

Ignore the fact that a rising minimum wage destroys jobs, this is utterly hypocritical class warfare and pathetic demagoguery that demonizes people who are successful or who are simply concerned about the self-destructive fiscal path this country is on.

But wait! It gets worse!

Earlier this summer, we heard Democratic National Committee Chairwoman (3) Debbie Wasserman-Schultz (D-FL) claim that Republicans wanted to take America back to the era of Jim Crow. Debbie had to walk that back under fire, but the Congressional Black Caucus has decided that the Tea Party is the new Klan and to play the race card for all it’s worth. Just listen:

Ed Morrissey concentrates on Congressman Andre Carson’s (D-IN) claim that Republicans and Tea-Partiers would be happy to see Blacks lynched. That’s outrageous enough as it is — Carson shouldn’t just apologize and resign, he should be expelled from the House. But listen to the rest: claim after claim that Americans advocating limited government and fiscal sanity are motivated by racism (4), are the enemy, and, as the execrable Maxine Waters puts it, can go “straight to Hell.” This is class warfare blended with good, old-fashioned racism — only the racism is coming from the CBC.

(Be sure to click through to Ed’s post for a second video, this time with Congressman Allen West responding to Rep. Carson and making it quite clear that he’s reconsidering his membership in the CBC. I’m also sorry to see featured in the video my former Assemblywoman and former Speaker of the CA State Assembly, Rep. Karen Bass. She should be ashamed.)

Anyway, there you have it. With a dismal record in office and with the increasing rejection of progressive ideology by a majority of the nation, all the Democratic Party “leadership” has left to offer is class envy, ethnic vitriol, and social division.

Now there’s Hope and Change.

UPDATE: Heh. The Washington Examiner contacted Congressman Carson’s DC office to ask if he would identify which members of Congress want to see him lynched. So far, no response.

Footnotes:
(1) How does NEN get these videos? They must have a spy network to rival the CIA…
(2) Last I checked, the Tea Party counted very few millionaires and billionaires in its ranks.
(3) Yeah, I’m un-PC. I shall report to my nearest reeducation center right after lunch.
(4) I’d like to see them pull this crap on Allen West, Tim Scott, Marco Rubio, Susana Martinez, Nikki Haley, and other minority conservatives who’ve risen to political prominence. Or does that call for the related “Uncle Tom card?”

(Crossposted at Public Secrets)