The Wealth Channel!

The Wealth Channel!

Server pay goes up $10,000 from ID to WA as the tipped minimum wage increase nearly $6/hour

Yes. Raising base wages for server raises their income. In fact, data from Washington and Idaho shows that you can almost triple base pay for servers and not affect tips

Washington has a $9.32 minimum for tipped workers; in Idaho it’s $3.35. As we move across the border, we see that annual mean income for servers goes down substantially as the effect of $9.32 on our side of the border gives way to the impact of $3.35 on their side.
Comparison of annual mean income for “Waiters & Waitresses”. 
(This data series includes tips in the income calculation)
Spokane Metro area: $27,340
Lewiston ID Metro area: $20,390 (which includes WA border areas)
Couer D’Alene Metro area: $17,560

San Jose raised its minimum wage last year, and the result has been clearly positive for business growth.

The city reports that business is growing, with 84,000 businesses registered at the start of 2014 compared to 75,000 the previous year. Importantly, the leisure and hospitality industry — the sector that includes food services, and where many minimum wage employees work — experienced a net increase of 4,000 jobs in San Jose in 2013, according to the California Employment Development Department.
That’s right: 9,000 new businesses and 4,000 new service jobs in just a year of higher wages. Further proof that economies grow from the middle out.
A letter from a Seattle employer on the minimum wage… 99 years ago

A letter from a Seattle employer on the minimum wage… 99 years ago

Revealed: big restaurants, big hotels, and the Chamber of Commerce are quietly organizing against $15 for Seattle. They even have 2 full-time employees lobbying on the issue. And yet no website, twitter account, or even mention of the effort anywhere but this very recent blog post on the restaurant association’s website.

Wonder why big biz would be hiding their involvement? 

In January 2013 [sic; they probably mean 2014], the SRA unified with the Washington Lodging Association (WLA) and Seattle Hotel Association (SHA) under a core set of principles and agreed to work together as one hospitality group on all efforts around the Seattle minimum wage discussions. With the help of the lodging industry, the WRA was able to grow its Local Government program by hiring Morgan Hickel as coordinator. The WRA now has two full-time employees working on local issues every day in Seattle.

The WRA has also helped pull the Seattle Metropolitan Chamber of Commerce and other Seattle industries together to form the OneSeattle Coalition.

Why would big business interests form a coalition to oppose a $15 minimum wage and be quiet about it?

Apparently there’s a grand coalition between big restaurant interests, big hotels, and other big business to lobby against $15 for Seattle. From the article, it sounds like they even have two full-time lobbyists working city hall. (And yet there’s barely record of this effort on the internet at all.)

Like usually, the big business lobbyists say they’re really concerned about small business and nonprofits, but these very same interests formed a very similar coalition to oppose a $15 wage in SeaTac — and that ballot measure specifically exempted small businesses and human services providers of every type.

It’s almost enough to make you think these big business types would rather be quiet and let other more sympathetic-seeming types take their case to the public for them.

Big business pioneered & grew the poverty-wage model; big business squeezes workers, our communities, and independent businesses with the poverty-wage model; and big business employees an overwhelming majority of poverty-wage workers. Big businesses also knows they can’t really adapt to a high-wage, high-prosperity Seattle-area economy nearly as effectively as more nimble independent competitors who will be able to much more easily develop locally-specific approaches.

They’re better off if nobody hears their voices in the public. Is there any other reason you’d launch a grand coalition of business interests with significant staffing & resources…. and not even publish a website or even a twitter account?

Big business wins if we’re talking about something else than the fact that they can afford to pay $15/hour to lift workers out of poverty and boost the economy for everyone.

Let’s not let them win. 

Yup, raising wages is good for business.

Here’s why we’re so confident that raising wages to $15/hour for 100,000 people in Seattle will boost the economy by creating more customers for more businesses: it’s in the data.

The Bureau of Labor Statistics 2012 Consumer Expenditures survey looks at how consumer spending in key categories is affected by an increase in household income.

This Federal data shows that raising wages from $9.32/hour to $15/hour will boost household spending on “Food away from home” by 46% and spending on “Alcoholic beverages” by 73%.

So yeah, we think bars & restaurants will be fine. In fact, they’ll have an incredible opportunity to dramatically increase their customer base.


Source & methodology:
Table 2. Income before taxes: Average annual expenditures and characteristics, Consumer Expenditure Survey, 2012

Household income categories used for comparison:

  • Full-time $9.32/hour worker: $15,000 - $19,999/year
  • Full-time $15/hour worker: $30,000 - $39,999/year

Spending impacts:

  • Moving from first category to second category increases spending on “Food away from home” from $1197 to $1746 per year (+46%)
  • Moving from first category to second category increases spending on “Alcoholic beverages” from $193 -> $335 (+73%)

The third-generation owner of Dick’s Drive-In proposes in the Seattle Times that instead of a $15 minimum wage that would lift workers out of poverty, the city should implement a tiered minimum wage which increases with educational achievement. Ironically, this editorial appeared just a day after new research showed that a half-million people with degrees are currently working minimum wage jobs.

Education has an intrinsic value; that’s why many workers do aspire to save up and earn a degree despite low wages and extremely expensive tuition. But education is not the solution to an economy where Federal data shows that 8 of the 10 fastest-growing jobs pay less than $15 an hour — and few of these jobs of the future require any degree beyond a high school diploma. We need more jobs that pay enough for people to support themselves, afford the basics, and contribute to the economy. 

It may be metaphorically appropriate for the grandchild of the founder of Dick’s Drive-In to be lodged in disproven 1950s-era assumptions about the  economy; but it would be a mistake to base 21st century policy on nostalgia rather than data. And the data shows that higher wages lift workers out of poverty and boost the economy by creating new customers for every business out there.



Hours Worked On Minimum Wage In Order To Pay For One University Credit Hour

Nah, it’s cool. You can totally still work your way through college. 



Hours Worked On Minimum Wage In Order To Pay For One University Credit Hour

Nah, it’s cool. You can totally still work your way through college. 


'If I have to wait six months or a year, I’m going to be broke,' said Jules Grele, owner of Powder Keg Bar and Grill in Tenino, Thurston County.

Grele said that he has lost at least $6,000 in business since the ban took place.

'They said I’d get four nonsmokers to every smoker I lost,' he said. 'That has not happened. They’re not here.'


Associated Press, 1/7/2006, after the Washington smoking ban passed.

Apparently the prediction was wrong, because the Powder Keg is still in business today: