In an interesting conversation with Joni Balter Tom Douglas calculates that raising wages to $15/hour would create added cost of $5/customer. (Note that this is relative to entrees priced in the $30-$40 range.)
Douglas also says business has been relatively slow the last couple months, but he does not seem to consider the increase in demand resulting from a citywide wage hike.
But here’s the reality from the bottom of the wage distribution: you just might be able to celebrate your birthday at a Tom Douglas restaurant if you’re paid $15/hour. But it’s not even in reach for a special occasion when a serving of black cod costs a half day of work at $9.32/hour.
That’s why wage increases consistently have positive impacts at the macro level despite the rough scenarios business owners describe at the micro level: because the higher wages paid at every other business creates new customers for your business too.
Hundreds of community members stood in the pouring rain, outside of Town Hall Seattle, donning bright red t-shirts emblazoned with a giant yellow “15” on the chest. We were out in force two hours early to show our support of $15 for Seattle at the first public $15 minimum wage hearing.
Sure we got a little wet, but it was worth it as supporters of $15 filled the room and took to the testimonial microphones. It sounded a little something like this:
“When you raise the wage of regular people, they are not going to sit on it. They are going to go out and spend it, helping everyone.”
“We need a higher minimum wage now so that Seattle is a race to the top, not a race to the bottom.”
“I support a $15 min wage because it will empower women. They’re a majority in low wage work. This will change women’s lives.”
Media was out in droves snapping photos, interviewing workers, and broadcasting live feeds as supporters of $15 overwhelmed the room.
"‘Historic moment’: Hundreds pack minimum-wage hearing” – Seattle Times
“Hundreds turn out for Seattle’s town hall on $15 minimum wage issue” – Q 13 Fox News
It was definitely a strong showing of support of $15 for Seattle.
Speaking of support, the mayor has set up an Online Town Hall. Share your input on why you support $15 to lift workers out of poverty and boost the economy.
"The argument that a higher minimum wage would hurt business is old and tired. There is clear and compelling evidence that the economy and companies enjoy real benefits when workers are paid more."
1) The sky isn’t falling: Bloomberg reported today that minimum wage increases have *not* caused job losses in our state: in fact, our job growth is ahead of the pack.
2) Higher wages reduce poverty and lower the need for food stamps. A Federal increase to just $10.10 would reduce food stamp need by $4.6 billion. Imagine what $15/hour would do!
3) Seattle voters support $15/hour by 68% because they know higher wages are good for workers & good for the economy.
The McDonald’s official 10K filing for investors lists a couple interesting items under the heading: ”ITEM 1A. Risk Factors and Cautionary Statement Regarding Forward-Looking Statements”
Here are a few things they’re worried about:
The impact of campaigns by labor organizations and activists, including through the use of social media and other mobile communications and applications, to promote adverse perceptions of the quick-service category of the IEO segment or our brand, management, suppliers or franchisees, or to promote or threaten boycotts, strikes or other actions involving the industry, McDonald’s or our suppliers and franchisees;
The impact of events such as boycotts or protests, labor strikes and supply chain interruptions (including due to lack of supply or price increases) that can adversely affect us or the suppliers, franchisees and others that are also part of the McDonald’s System and whose performance has a material impact on our results;
Consumer spending data from the Federal government shows that dollars spent on reading increase substantially as household income rises from from $9.32/hour to $15/hour:
Consumer expenditures on reading, per most recent BLS data:
- Income between $10,000 and $19,999: $60/year
- Income between $30,000 and $39,999: $76/year
If you’re paid $9.32/hour, you’re in the first category. Raising wages to $15/hour moves you into the second category, increasing spending by 26%.
The idea that more people with more money means more customers for more businesses isn’t just a theory — it’s the reality of our economy. That’s why higher wages are good for workers and good for business too.
Source: BLS Consumer Expenditures survey, http://www.bls.gov/cex/csxann11.pdf
Every time the minimum wage goes up, some business owners come out to say it’s going to be the end of the world. But the sky has yet to fall.
In 2011, a Seattle restaurant owner told KING 5 that minimum wage hitting $9.04/hour the next year would hurt his business.
"I think it’s a dangerous time now to raise minimum wage over 4 percent for tipped employees in the state,” said Travis Rosenthal, owner of Tango Restaurant. He says Seattle restaurants will either raise menu prices or cut staff.
But business is apparently booming — perhaps because higher wages across the whole economy are good for businesses across the whole economy.
In September 2012, the owner of Tango opened Rumba, his second restaurant.
And now he’s purchasing a third restaurant, Panevino.
These are charming places that deserve their success, which never comes easy in the restaurant business.
But its also worth comparing their success to the very recent predictions, especially now that the Chicken Littles have started raising their voices in the $15 minimum wage debate.
Imagine you told a restaurant owner in one of the dozens of states with a $2.13 tipped minimum wage that they’d have to start paying $7 more to their servers every single hour they work. Odds are that almost every one of them would tell you it’s impossible: more than quadrupling what the owner pays to servers would obviously force them to go under. “It’s basic economics,” they’d tell you. (Or maybe “simple math.”) There’s just no way a restaurant could survive at those levels of pay, they’d explain.
And yet here in Washington State, the restaurant industry thrives while having to pay a minimum of $9.32/hour to everyone.
Consider that real world example next time you hear business owners say that $15/hour is impossible.
Because our state has already proven that restaurant owners are more creative and adaptable than they give themselves credit for.