Seattle businesses are closing, particularly restaurants, in the wake of the mandate to raise minimum wages to $15/hour.
There are a couple things people who do not write paychecks do not understand. The employer isn’t just paying that fifteen dollars an hour- he has other expenses tied to the hourly wage- unemployment insurance, some payroll taxes, worker’s comp, and the employer’s portion of your social security taxes all are based on wages. So it wasn’t just a simply dollar for dollar raise. In Seattle, the taxes employers have to pay are such that it costs them closer to $22.00 an hour to pay their workers $15.00 an hour.
The profit margin on most food industries- groceries, most restaurants- is not as large as people imagine.
If you read the article, you see that many employees have little perks- like free parking, free or discounted meals, free use of some work services or amenities, that businesses can no longer afford to extend when they have to raise payroll.
There’s something about the arguments over minimum wage that I don’t understand. Whenever I read the comments to those articles, there are always several people saying they don’t mind paying extra for restaurant meals if that means the employees are getting paid more. There’s a lot of nonsense packed into that claim.
For one thing, the implication is simply that they are better than everybody else because they say this.
There’s also an implication that because they say they wouldn’t mind, then somehow that shows that the projected cost of raised wages will be ameliorated by all those mythical people who won’t mind.
How do I know they are mythical? Those people who say they wouldn’t mind paying more at all, in fact they’d love to- what’s stopping them. We live in a tipping for service country. When you go out to eat, you can tip your server double the price of your meal if you want to. You can put some in an envelope and send it back to the cook and kitchen staff if you like. If you really think it’s so reasonable- go ahead and start now.