REPORT: Seattle Wage Hike Off To ‘Pretty Bad Start,’ Kills 700 Jobs
Seattle, which recently passed a $15 minimum wage, has seen the loss of 700 restaurant jobs despite the rest of the state seeing huge increases, according to a Wednesday report.
In its report, the American Enterprise Institute looked at restaurant job growth in both Seattle and the rest of Washington. The state itself has gained 5,800 industry jobs since January. Seattle, however, lost 700 jobs in the same time. The state minimum wage is $9.47. Back in June Seattle passed its own minimum wage of $15 an hour. The city ordinance is designed to phase in over the course of several years. It will reach $15 an hour by 2017 for most employers.
“One likely cause of the stagnation and decline of Seattle area restaurant jobs this year is the increase in the city’s minimum wage,” the report speculated. “It looks like the Seattle minimum wage hike is getting off to a pretty bad start. Especially considering that restaurant employment in the rest of the state is booming, and nearly 6,000 more restaurant workers are employed today than in January.”
Seattle was the first place to pass a $15 minimum wage measure and became the first major victory for supporters. San Francisco and Los Angeles followed not long after and now many cities have either enacted it or are considering it. Some states are also giving the $15 minimum wage serious consideration. Currently it has not passed on the state level.
New York Democratic Gov. Andrew Cuomo first announced Sept. 10 his plan for raising the state minimum wage. If enacted, the increase will gradually put New York City to the $15 mark by 2018 and the rest of the state by 2021. Florida and Massachusetts have also began taking steps to pass it.
The impact minimum wage increases have on workers and employers is in dispute. Critics often argue increasing the minimum wage, especially as high as $15 an hour, will hurt the poor by limiting job opportunities. The problem is businesses need to offset the extra cost of labor by either raising prices or cutting workers. It is particularly troublesome for low-profit industries like restaurants who struggle much more to absorb the extra costs.
Supporters, though, say wage will help the poor by allowing them to afford basic necessities. The increased purchases would than stimulate economic activity. Fight for $15 has been the main advocate behind the push. The union-backed group has utilized rallies and media marketing campaigns in its efforts.
Simple supply and demand graph applied to the minimum wage.
Blue line is demand, red upward sloping line is supply.
When blue crosses red, you have market equilibrium and the market price.
When the minimum wage is artificially increased, the demand will decrease (law of demand). The red vertical and horizontal lines represent the artificially minimum wage and this falls on the supply and demand curves. As you can see, there is greater supply for people to work at an artificial minimum wage and there is less of a demand. This is the direct result of raising the minimum wage to an artificially high amount. And the loss of 700 jobs once again proves the theory of supply and demand.
And the average college age voter:
Seattle, which recently passed a $15 minimum wage, has seen the loss of 700 restaurant jobs despite the rest of the state seeing huge increases, according to a Wednesday report.
In its report, the American Enterprise Institute looked at restaurant job growth in both Seattle and the rest of Washington. The state itself has gained 5,800 industry jobs since January. Seattle, however, lost 700 jobs in the same time. The state minimum wage is $9.47. Back in June Seattle passed its own minimum wage of $15 an hour. The city ordinance is designed to phase in over the course of several years. It will reach $15 an hour by 2017 for most employers.
“One likely cause of the stagnation and decline of Seattle area restaurant jobs this year is the increase in the city’s minimum wage,” the report speculated. “It looks like the Seattle minimum wage hike is getting off to a pretty bad start. Especially considering that restaurant employment in the rest of the state is booming, and nearly 6,000 more restaurant workers are employed today than in January.”
Seattle was the first place to pass a $15 minimum wage measure and became the first major victory for supporters. San Francisco and Los Angeles followed not long after and now many cities have either enacted it or are considering it. Some states are also giving the $15 minimum wage serious consideration. Currently it has not passed on the state level.
New York Democratic Gov. Andrew Cuomo first announced Sept. 10 his plan for raising the state minimum wage. If enacted, the increase will gradually put New York City to the $15 mark by 2018 and the rest of the state by 2021. Florida and Massachusetts have also began taking steps to pass it.
The impact minimum wage increases have on workers and employers is in dispute. Critics often argue increasing the minimum wage, especially as high as $15 an hour, will hurt the poor by limiting job opportunities. The problem is businesses need to offset the extra cost of labor by either raising prices or cutting workers. It is particularly troublesome for low-profit industries like restaurants who struggle much more to absorb the extra costs.
Supporters, though, say wage will help the poor by allowing them to afford basic necessities. The increased purchases would than stimulate economic activity. Fight for $15 has been the main advocate behind the push. The union-backed group has utilized rallies and media marketing campaigns in its efforts.
Simple supply and demand graph applied to the minimum wage.
Blue line is demand, red upward sloping line is supply.
When blue crosses red, you have market equilibrium and the market price.
When the minimum wage is artificially increased, the demand will decrease (law of demand). The red vertical and horizontal lines represent the artificially minimum wage and this falls on the supply and demand curves. As you can see, there is greater supply for people to work at an artificial minimum wage and there is less of a demand. This is the direct result of raising the minimum wage to an artificially high amount. And the loss of 700 jobs once again proves the theory of supply and demand.
And the average college age voter: