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.
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.
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
- 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.
'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: https://m.facebook.com/PowderKegBarGrill?id=242938785837897&refsrc=https%3A%2F%2Fwww.facebook.com%2FPowderKegBarGrill
The experience in our state when smoking was banned in bars & restaurants sheds a lot of light on the current debate over demand, business costs, and the minimum wage.
When Washington voters overwhelmingly passed I-901 in 2005, many bar & restaurant owners were concerned. Several suggested massive layoffs would result from the loss of customers who wouldn’t go out if they couldn’t smoke.
In fact, just days after the election, KOMO news reported that the owner of The Swinging Door in Spokane: “said the ban - which takes effect Dec. 8 - could force him to lay off of as many as 15 of his 50 employees due to expected loss of business.”
The owner of the Spar Cafe in Olympia told KOMO something that also sounds familiar:
"I’ll be honest with you. I’ve run my numbers. I have a hard time believing all these nonsmokers are going to show up in place of my smoking customers.”
Why were these specific prediction so wrong — don’t business owners know their business better than anyone?
A good business owner certainly knows the customers they have. But here’s the thing: they don’t always know their potential customers very well.
So back in 2005, many bar owners looked at their current customers, many of them smokers, and worried they’d lose them.
But their predictions about the business impact were so wrong because they couldn’t see the customers they didn’t have yet — in this case, all the people more likely to go to a bar without second-hand smoke.
The situation around the $15 minimum wage is similar. Business owners are clearly worried about how potential price increases might cost them some business from the customers they have. But they’re not seeing the tens of thousands of potential customers out there who aren’t yet spending money in their business because they can’t afford it on poverty wages.
This is another reason why all the data shows that despite the myths & claims, there’s no job loss when wages go up.
Long story short: you can contribute a lot more to the economy on $15/hour than your can on $9.32. Multiply that by 100,000 workers in Seattle, and it’s an incredible opportunity for any business ready & willing to seize it.