OPINION:
The voters of SeaTac, Wash., a suburb of Seattle, lined up in big numbers last spring to show how much they care about the poor, voting to mandate a “living wage” of $15 an hour for workers in the city’s hospitality and transportation industries. Since the beginning of the year, businesses have had to pay an extra $5.68 an hour on top of the state’s minimum wage of $9.32 an hour.
The voters have been shocked — shocked! — to see that their generosity is costing them a lot of money. Following the lead of other companies, Masterpark Airport Parking now tacks an 8.25 percent income-redistributing “living-wage surcharge” on its bills, or 99 cents a day. A receipt shown on the Heritage Foundation’s new Daily Signal website reflects a $6.93 surcharge for seven days of parking. With the sales tax, city tax and airport-access tax, the government fees inflated the customer’s bill from $84 to $105.
The Seattle City Council ignored SeaTac’s experience and adopted its own $15 minimum wage in the city, the highest in the nation and 61 percent higher than the rest of the state. “Today we answer President Obama’s call and the moral call to address the plight of low-wage workers,” declared Council President Sally J. Clark upon passage of the measure.
Ms. Clark took her advanced course in economics from Professor Obama, who insists “there’s no solid evidence that a higher minimum wage costs jobs.”
It’s primarily the lowest-skilled, marginal employees who are laid off when an employer realizes their labor isn’t worth $15 an hour. Job seekers will find those scarce entry-level opportunities disappear completely. Instead of earning $9.32 an hour, the “wage” becomes $0 per hour. Job openings dry up when fewer companies set up shop in Seattle and SeaTac. Such companies enjoy a competitive advantage if they locate somewhere else.
Labor usually makes up the largest part of a company’s expenses, so it’s the first place managers look to cut to make ends meet under a new mandate. Expansion plans are put on hold. David Jones, the owner of Blazing Onion Burger, tells CNN that he had to put aside plans to open a new restaurant. “I would love to come to Seattle,” he said. “But I had to do it responsibly.”
Seattle’s minimum-wage increase is phased in over seven years and has numerous exemptions, including a permanent exclusion, or “subminimum,” for teenage workers. If, as Mr. Obama insists, there’s no evidence that a minimum-wage increase costs jobs, why does Seattle have such a long phase-in period and so many exemptions? If imposing such a generous minimum wage carries no downside, it ought to take effect immediately, and in full.
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