Posted on 03/22/2015 10:01:57 AM PDT by Diana in Wisconsin
"Why Are So Many Seattle Restaurants Closing Lately?” asks a recent Seattle magazine headline. The Scrapbook is no restaurateur, let alone knowledgeable about the local economy, but we’ll guess it has something to do with the fact that Seattle’s new $15 minimum wage starts phasing in on April 1. However, the first rule of liberals confronting the laws of basic economics is deny, deny, deny.
A feature in the Seattle Times called the “Truth Needle” (we’re guessing the Times didn’t want to pony up to license PolitiFact’s logo) declares the claim that minimum wage has anything to do with the undeniably large number of restaurant closings is “false.”
Now, it’s certainly the case that restaurant operators in liberal Seattle are claiming a higher minimum wage has nothing to do with their business decisions. This is likely somewhere between a delusion and a lie, so let’s split the difference and call it public relations. Again, basic economics tells us that the typical restaurant operates on a slim profit margin, and wages typically run about 35 percent of operating costs.
Nonetheless, in very liberal and very wealthy Seattle, angering your customer base by proclaiming your opposition to redistributive social justice would be foolish. It would also be foolish to anger the local regulatory czars in a city that has proclaimed the new wage law a political triumph. “Restaurateurs are business people, not politicians, and angering the mayor over the law he signed is not a smart business move,” notes the Washington Policy Center.
However, there’s little doubt that the city’s heralded food scene is running scared. 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.” We’re fairly certain it will be a Brave New Seattle, where there are fewer great restaurants, to say nothing of all the other labor-intensive businesses that will be shutting down.
Naturally, this means fewer jobs for the poor. Worse, the increased wages will also amount to a regressive tax. Economist Tyler Cowen flags a new study in the Journal of Political Economy by Stanford’s Thomas MaCurdy, concluding an increase in the “minimum wage produces a value-added tax effect on consumer prices that is more regressive than a typical state sales tax.”
The study also points to another reason why cash-strapped municipal governments like artificially raising wages. “Unlike most public income support programs, increased earnings from the minimum wage are taxable,” MaCurdy writes. “Over 25 percent of the increased earnings are collected back as income and payroll taxes. . . . Even after taxes, 27.6 percent of increased earnings go to families in the top 40 percent of the income distribution.”
So minimum wage increases grow government, make the rich richer, and still allow liberal politicians to demagogue the hell out of poor voters by falsely claiming they’re putting more money in their pockets. In the longer term, living wage laws and other en vogue liberal policies are likely to transform one of America’s best cities into Detroit on the Puget Sound. It would be nice if there were a stronger political counterweight in our overwhelmingly Democratic cities, but the best hope for conservatives regaining a foothold in urban America might be simply to stand back and let liberal economic policies work their magic.
Automats, cafeterias, modern vending machines, ordering on tablets, and robots.
The totalitarian Left policies always encourage de-humanization.
Not to mention obamacare...
It’s rare that we use restaurants, either. Both of us are awesome cooks and both like to do it.
“The truth needle”
There is an old expression “You’re on the needle, man.”
It’s like in the past when local and state government would raise the cigarette taxes and claim they would have all this extra revenue but it never happened.
People either quit smoking or more likely found a new source of supply where they paid no taxes on it.
This isn’t the same but the overall result will be , less local tax revenue and business’ moving somewhere else.
It will not take long to see how this local Socialist experiment will work out and watch the finger pointing among liberals on who to blame. Remember none of these people ever took Econ 101 in school.
The rare win-win-win, if you're a Democrat.
So now people will order their meals from a kiosk at the table, while an assembly line cooks the food and delivers it to your table. That’s the future of restaurants in Seattle.
minimum wage is tied to union labor rates..
the higher the minumum wage, the more cash the union thugs get...
the union thugs fund the democrat party..
it does not take a rocket scientist to figure this one out..
I am BLESSED to have a very generous employer, but he is SO p*ssed over this ObamaCare crap that we Managers are having a hard time finding decent help and/or being able to schedule to actually meet the needs of our customers, based on the demands he’s putting on us.
Holding on by the skin of our teeth right now - the business is fine, but I fear customer service (what we’re known for) is going to suffer in the near future.
I don’t see a new President turning things around quickly for anyone. Things are going to suck for quite some time to come. :(
I took the family to Seattle in 2006. The museums (especially Boeing), zoo, aquarium, Needle and wharf are worthwhile attractions. We also drove up to Redmond to see MSFT (the offices could pass for a large university). But the highlight of the trip was Victoria, BC and whale watching on Puget Sound.
If I have knowledge that a server is making $15.00 per hour, I will not tip. My tip is included in the extra price paid for the entree. Seattle was once a fun place to visit but it has followed Portland, Oregon and San Francisco, CA down the misery hole known as socialism.
That sounds lovely! You must have had a great time!
” but the best hope for conservatives regaining a foothold in urban America might be simply to stand back and let liberal economic policies work their magic”
A good idea.
I was on a Facebook Page about this yesterday and today. Its filled with all these rabid little commie social justice types. The venom they spew is absolutely hysterical. They all think Capitalism is evil.
Where they'll see the difference is higher cost = less demand, so as menu prices rise, patronage at the restaurant will decrease. When that happens, there is less need for wait staff.
Waiters who manage to keep their job will probably be in good shape, but there will be fewer job opportunities for students or the entry-level work force.
Disclaimer: My son delivers pizza on the weekend for his college job, is paid for less than minimum wage when on deliveries. He relies on tips for income.
Yes, it was definitely one of our better vacations. Don’t forget passports if you are going into Canada. (At that time I thought we could still use a driver’s license as in previous years-—wrong!) The ferry rides are also quite an experience.
And what does that old expression mean?
Regards,
“They all think Capitalism is evil.”
Yep. As they drink their Starbucks and post form their iphones! *SNORT*
You’re on Heroin, drugs, etc. That’s what it means.
“On the needle”
Not directed at you.
I recently ran into a woman from Washington at a Wine and Spirits store. She told how the state had recently gotten out of selling wine and spirits, but imposed a 25% tax on sales in private stores. Even the cheapest vodka was $40 and she said they resorted to running their cheap vodka through a Brita water filter to make it drinkable.
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