Haggen Slashes Hours Because It Can

Bosses! Amirite? (Image courtesy of marcolm at FreeDigitalPhotos.net.)

Bosses! Amirite? (Image courtesy of marcolm at FreeDigitalPhotos.net.)

Free marketeers often dismiss stagnant wages and growing income inequality, because markets! Workers are paid what the market determines their labor to be worth, conservatives sneer, no more, no less. Period.

Of course it would be ridiculous to counter that markets don’t play a major role in setting wages. But it would be equally ridiculous to ignore the role played by the staggering imbalance of power between employers and employees:

Geiger, the union spokesman, said Haggen originally added worker hours after taking over the former Albertsons and Safeway stores. But he said that in the past few weeks, some people who had worked 40 hours a week “for years” were ending up with less than 20 assigned hours.

Likewise, several staffers who remain officially employed haven’t been assigned any weekly hours in the past few weeks.

Think about that. If you just announced to your boss, “I’m not coming in for the next couple weeks,” or “I think I’m only going to work half-days through end of the summer or whenever I feel like it,” you’d probably be fired. But it’s perfectly acceptable for your boss to do the equivalent to you while expecting you to remain on call to accommodate his scheduling needs, or else, you know, you’re fired.

In fact, it’s not just acceptable, it’s the norm. Even for unionized employees.

Conservatives argue that wage floors, overtime standards, labor unions—these all hurt the economy by “distorting the market.” But there is no pure market for labor, and never has been, because employers enjoy a natural power advantage that exists external to the value of labor.

That’s why they get to tell you what to do, and not the other way around. They’re in charge. If you don’t like it you’re free to quit, but you’ll starve long before your employer does. That’s the nature of wage labor.

If it wasn’t, shit like this would never fly.

Bob Donegan on Raising the Minimum Wage to $15: “customers seem to like it, the employees seem to like it, and it seems to be working”

Yesterday, I shared the good news about a new pizza place going into the old Z Pizza spot, which indicated that Seattle’s $15 minimum wage isn’t the job-killer that conservatives made it out to be. Today, the Seattle PI published a report from the AP’s Gene Johnson that talks to people who work in restaurants about the change. I don’t want to keep you in suspense, so let me cut to the point right away: they’re very happy with how the $15 rollout is going.

Come to think of it, I could go for a nice bowl of Ivar's clam chowder right now.

Come to think of it, I could go for a nice bowl of Ivar’s clam chowder right now.

Johnson focuses on Ivar’s Salmon House, which immediately raised staff wages to $15 per hour in April and instituted a tip-free policy that raised menu prices and shared some of the revenue from increases with workers. He reports that wages for Salmon House staff have increased by as much as 60 percent since the change.

Ivar’s Seafood Restaurants President Bob Donegan told Johnson that the response has “been a surprise.” Donegan notes that Salmon House “customers seem to like it, the employees seem to like it, and it seems to be working, at least in this location.” Donegan was characterized by Josh Feit at Seattle Metropolitan back in April of 2014 as “a known $15 opponent” who “funded the anti–minimum wage campaign in SeaTac,” so this is quite an about face.

Employees back up Donegan’s claims:

Rochelle Hann, 25, is a second-generation worker at Ivar’s. Like her mom, she has performed a variety of roles, including serving, bookkeeping and even dressing up as a giant clam. If she keeps working 30 hours a week, her annual pay will jump about $12,000 — money she’s socking away for accounting classes at a community college.

“Before, I felt like it was maybe not quite paycheck-to-paycheck, but now I don’t even have to worry about it,” she said. “I just went away for the weekend, and it was an easy expense.”

Brett Richards, a 50-year-old singer and guitarist, has worked 25 years in food service, including the past eight at Ivar’s. Before, he made minimum wage, plus tips. Now, he gets $15 an hour, plus a share of the 21 percent menu price increase, plus any additional tips customers leave. He expects to make almost $7,000 more this year, money that’s helping him with his increased rent and with taking his kids out to eat a little more often.

Forgive all the excessive bolding there, but these statements are incredibly important because they prove that the $15 minimum wage is doing exactly what it’s meant to do. These workers are spending the extra money on vacations and restaurants and higher education; in other words, they’re circulating more money through the economy, which in turn adds to the profits of local businesses, which will then invest those profits into their own workers. It’s just more proof that the middle class, and not the top one percent, are the real job creators. Empowering workers with an increased minimum wage helps everybody, from the owners to the newest employees. Seattle’s message to the rest of the country on the $15 minimum wage is clear: it’s working.

Daily Clips: July 31st, 2015

ATTENTION: IF YOU HAVE NOT YET VOTED IN THE PRIMARY, PLEASE DO SO BEFORE AUGUST 4TH. IT IS YOUR CIVIC DUTY. 

D.A.R.E. (accidentally) calls for marijuana legalization: The miserable War On Drugs appears to be in its final stage. I think most intelligent people have just said no to the whole project’s idiocy for awhile now, but it is good to see that even D.A.R.E. is willing to admit their mistakes. As the Daily Intelligencer reports:

Written by former deputy sheriff Carlis McDerment in response to a letter in the Columbus Dispatch, the op-ed* explains that it’s impossible for law enforcement to control the sale of marijuana to minors. “People like me, and other advocates of marijuana legalization, are not totally blind to the harms that drugs pose to children,” McDerment writes. “We just happen to know that legalizing and regulating marijuana will actually make everyone safer.”

*It should be noted that the op-ed was quickly taken down. So, maybe they’re not as sane as I just gave them credit for?

Jimmy Carter lays down the law: When asked by Thom Hartmann what he thought of “unlimited money in politics”, Carter didn’t mince his words:

Now [America is] just an oligarchy, with unlimited political bribery being the essence of getting the nominations for president or to elect the president. And the same thing applies to governors and U.S. senators and congress members.

Those are incredibly powerful words coming from an ex-president. You can watch his full answer here:

Clinton takes a swing at Jeb!’s “Right To Rise” slogan: Speaking at the National Urban League’s conference in Florida, Hillary didn’t miss the opportunity to lampoon the Sunshine State’s ex-governor. Specifically, she took aim at his awful campaign slogan “Right To Rise”:

I don’t think you can credibly say that everyone has a right to rise and then say you’re for phasing out Medicare or for repealing Obamacare. People can’t rise when they can’t afford health care…And you cannot seriously talk about the right to rise and support laws that deny the right to vote.

Oh no she didn’t! Her words, while certainly partisan, are very true. No presidential candidate can honestly call for “opportunity for all” while simultaneously looking to remove (I mean “reform”) basic protections/rights for Americans.

Our gun laws need to be changed: In a plead for sanity, Fareed Zakeria took to his Washington Post column to ask Americans to please, pretty please, pass new gun laws. You can really hear the defeat in his voice as he laments how we, as a nation, now simply “gloss over” the catastrophic levels of violence that guns produce in our country. Zakaria even says that Rick Perry should not be considered as a serious presidential candidate because of his recent call for fewer gun restrictions. Perry doesn’t exactly have to worry though, as he wasn’t a serious presidential candidate to begin with it.

It’s the Land Value, Stupid (or Why Seattle’s Affordable Housing Debate Shouldn’t Really Be About Making Houses More Affordable)

Source: King County Department of Assessments

Source: King County Department of Assessments

What with Seattle Mayor Ed Murray dramatically backtracking from HALA recommendations that would have allowed denser housing in many single-family zoned neighborhoods, I thought I should take a moment to elaborate on a point I made in my recent affordable housing post regarding the impossibility of making single-family detached housing affordable. “We all need to give up this fantasy that every middle class family can own a bungalow and a yard,” I insisted. And the table above helps explain why.

That’s the past 15 years of tax assessment records for my own bungalow and yard, copied and pasted from the King County Department of Assessments website. And assuming the total appraised value in the righthand column comes anywhere close to tracking the actual resale value, I’ve earned a surprisingly modest return on my “investment” over the past decade and a half: an average of only 4.29 percent a year, just twice the rate of inflation (Consumer Price Index) over the same period of time.

Thanks, Great Recession!

But that righthand column only tells half the story. The truth is, adjusted for inflation, the house itself has actually decreased in value over the past 15 years. Which makes sense. Depreciation. My house is old. It’s the value of my land that has figuratively gone through the roof.

According to King County, the land value of my 6,800 sq ft lot increased by almost 10 percent a year, from $54,000 in 2000 to $224,000 in 2014. That’s a fourfold increase—threefold even after adjusting for inflation. And unless our population growth projections are totally wrong, there’s no reason to expect Seattle land values not to continue to grow faster than the local economy as a whole.

Why? Because the supply of land in Seattle is finite. We can build more housing, but we can’t build more land. In fact, as the HALA recommendations acknowledged, to address our housing needs we really need to reduce the amount of land in Seattle restricted to 5,000-plus sq ft lot single-family detached houses. The mayor’s decision to reject these recommendations may or may not be good politics, but it’s certainly bad policy. Though either way, homeowners like me ultimately win.

If we do nothing to loosen density restrictions, then the value of my land continues to increase as demand for bungalows with yards increasingly outstrips supply. If we rezone my lot to accommodate greater density, then the value of my land probably increases even more, as it could then hold two or more $255,000 homes where it now holds just one. But either way, my land value goes up.

Of course, economics is a lot more complex than that. “Supply and demand” isn’t a law, per se; it’s more like economic shorthand. But while there are many factors that could alter demand, the supply of in-city land can never increase.

Early growth skeptics would have found it hard to imagine the era of the $1 million bungalow,” Lesser Seattle booster Knute Berger recently bemoaned on Crosscut. But I don’t know why—it was inevitable. For you can build as many duplexes, triplexes, apartments, and condos as you want, and the iconic Seattle bungalow would still remain in short supply.

I dwell on this point to emphasize that when we talk about affordable housing, we’re not really talking about making houses more affordable—at least not those of the single-family detached variety. We’re mostly not even talking about affordable homeownership, what with renters bearing the brunt of the affordability crisis. And yet the pundits and policymakers driving this debate—as well as the reliably voting constituents most politicians tend to answer to—are disproportionately single-family detached homeowners like me.

Which I think tends to color the debate with a glaring lack of perspective.

Look, I love both my bungalow and my yard. And I’m very happy to have been born early enough to be able to afford it on less than a six-figure income. But unless she strikes it rich, I know full well that the only way my daughter is going to own a house like the one she grew up in is if I die in it. So if I really care about keeping Seattle affordable for my daughter’s generation then I know we’re going to have to radically change our expectations about what housing will look like for Seattle’s future middle class.

Seattle needs to grow denser and taller. And if we want to adequately address affordability, we need to grow denser and taller throughout the city. That doesn’t mean eliminating zoning. And it doesn’t mean eliminating single-family zoned neighborhoods entirely. But it does mean making smarter use of the limited land we have as we grow into a city that lacks the space to house the majority of residents in single-family detached homes. All options should be on the table.

So fight to preserve these neighborhoods if you want (politics is an adversarial process, after all), but understand that you are ultimately fighting to preserve these neighborhoods for the relatively well off. And please don’t pretend that there is anything we can do to keep the iconic Seattle bungalow affordable.

[Cross-posted to Horsesass.org.]

Capitol Hill Pizza Place That Closed Due to $15 Minimum Wage to Be Replaced by Better Pizza Place

Remember Z Pizza, the Capitol Hill restaurant whose owner said the store was closing due to Seattle’s increased minimum wage? Remember when Q13 Fox quoted owner Ritu Shah Burnham as saying she was “terrified for” her employees, that “I have no idea where they’re going to find jobs [once Z Pizza closes], because if I’m cutting hours, I imagine everyone is across the board?” Remember how conservative bloggers referred to Z Pizza’s closing as “a spate” of Seattle restaurant closures? Remember how they used the case of Z Pizza as a single data point that somehow predicted a trend of restaurant closures?

Ian's saves the day for pizza-lovers.

Ian’s saves the day for pizza-lovers.

Well! This morning, J Seattle at Capitol Hill Seattle Blog broke the news that a new tenant will be moving into Z Pizza’s space this fall. And guess what? It’s a pizza place. Ian’s Pizza on the Hill, the first Seattle outpost of a popular small Wisconsin pizza chain, will open in October. Ian’s co-owner Brandon Stottler told Capitol Hill Seattle that he’s all in favor of Seattle’s increased minimum wage.* “It feels more like the right thing to do to respect service workers and what they do,” Stottler told J Seattle. Capitol Hill Seattle also linked to a Badger Herald editorial about Ian’s excellent health care policy: “here is a case of a small business owner standing up and saying they already offer their employees full health coverage and have done so ever since they could afford it.” Sounds like the kind of business we want in Seattle.

And Ian’s isn’t the only pizzeria opening on Capitol Hill this fall. Capitol Hill Seattle lists five pizza places, including the first Seattle outpost of Portland’s Sizzle Pie restaurant, that are opening (or, in one case, reopening) in Z Pizza’s neighborhood over the next few months. Call me crazy, but I don’t think former Z Pizza employees will have a problem finding work.

In fact, Seattle Metropolitan magazine just published a story about Seattle’s chef shortage, using the nationally famous—yep, you guessed it—pizza place Delancey as its opening example:

When Brandon Pettit posted an opening for a cook at his pizzeria, Delancey, in Ballard, the sort of place where diners line up before doors open and the staff enjoys one another’s company enough to hang out during off hours, he got exactly one response. From someone who has never worked at a restaurant. Pettit hired her.

Seriously: does it look like the increased minimum wage is causing an employment crisis to you? If so, then consider this chart by Friend of Skunkworks Invictus, showing the number of restaurant permits in Seattle:

The fact is, minimum-wage naysayers don’t have a leg to stand on. Those scary early posts by lazy journalists and axe-grinding conservative bloggers were based on airy fictions and scare tactics. The reality is, Seattle’s restaurant scene is right now stronger than it’s ever been.

* Conservatives will make much of the fact that Ian’s will be considered a small business under the minimum wage law because it has fewer than 500 employees, and not a franchise as Z Pizza was. It’s true that Ian’s will have a longer schedule to reach the $15 minimum wage than Z Pizza would have had. But what strikes me as interesting about this particular conservative argument is that it’s accepting of the $15 minimum wage; detractors just want a longer timeframe to reach it.
Frankly, though, franchises should pay their employees more, because franchises are not as good for the local economy as small businesses are. A report by Civic Economics in 2012 (PDF) found that chains like Target and Home Depot “recirculate an average of 13.6% of all revenue within the local markets that host its stores,” while locally owned businesses return 52 percent. And local restaurants recirculate 78.6 percent of their revenue locally, while chains like McDonald’s only recirculate 30.4 percent. By paying their employees more at a faster rate, franchises are doing their part to help boost the local economy, thus paving the way for small businesses to raise their minimum wage.

Daily Clips: July 30th, 2015

ATTENTION: IF YOU HAVE NOT YET VOTED IN THE PRIMARY, PLEASE DO SO BEFORE AUGUST 4TH. IT IS YOUR CIVIC DUTY. 

There’s something about Bernie: When most Americans heard that Bernie Sanders was going to run for president, they likely rolled their eyes or even chuckled at the implausibility of it all. And yet here we are months into the 2016 primary process and Bernie Sanders is drawing thee biggest crowds in the country.

While Molly Ball’s excellent article on Sanders’ surge is quick to assure readers that “I am not going to tell you now that Sanders “just might give Hillary Clinton the shock of her life”,” she does highlight the one truth about his candidacy: “Bernie Sanders has one thing Hillary Clinton doesn’t: an ideology.”

How accurate. Friend and foe alike know where Bernie stands on many issues, because he is the rare politician who is honest and direct. Even if you may not subscribe to his brand of “democratic socialism”, as he called it in his Vox interview with Ezra Klein, no one can question his authenticity and dependability. Hillary should take note.

Another gun death in Seattle: Inspired by recent articles from Paul Constant and Danny Westneat on our collective silence to gun violence, I wanted to include the news that a Seattle-area man was killed and two others were injured in a Federal Way shooting last night. Sigh. This isn’t normal, people.

US economy keeps on truckin’: According to MarketWatch, the US economy has “firmed up” since its slow start in 2015. GDP rose at a 2.3% annual rate from April to June, which basically makes interest rate hikes a guarantee at some point this year.

Bernie Sanders: “The top one-tenth of 1 percent” of Americans “own almost as much wealth as the bottom 90 percent.” Politifact looked at this statement from Bernie and found it to be “mostly true.” As they point out, “[h]is claim repeats a finding from a study by two internationally known economists that were supported by two other major economists we contacted. But the study has been criticized, for example, for not including Social Security in the wealth calculations.”

In 2015, America Averages One Mass Shooting a Day

"Now’s not the time [to talk about guns,]" Bobby Jindal said after the shooting in Charleston. But if shootings happen every single day, when is an appropriate time to talk about guns?

“Now’s not the time [to talk about guns,]” Bobby Jindal said after the shooting in Charleston. But if shootings happen every single day, when is an appropriate time to talk about guns?

This is a fact we can’t ignore. Go look at this chart.

WonkBlog’s Christopher Ingraham writes:

The Mass Shootings Tracker, a crowd-sourced tally of mass shootings maintained by the GunsAreCool subreddit, shows that we haven’t gone more than eight days without a mass shooting in the U.S. since the start of 2015 — that doesn’t leave a lot of time to grieve and regroup between shootings. We’ve averaged exactly one mass shooting per day since the start of the year. Forty eight days saw more than one mass shooting take place. On 18 days there were at least 3 shootings. On three days this year — April 18, June 13 and July 15 — there have been five shootings.

The NRA crowd will try to parse this, of course, by trying to argue the definition of “mass shooting”—some have claimed in the past that “gang violence” doesn’t count as a “mass shooting,” as though people injured or killed in gang-related crime don’t count somehow. (I don’t even have the time to get into how racist and classist that argument is, but C’MON.)

Every time the media focuses on a mass shooting, we’re told that the aftermath of a shooting isn’t the time to talk about gun violence. If these numbers hold up, America will never have an appropriate time to talk about gun violence, because mass shootings happen all the time in America.

Why aren’t Americans buying new cars?

We’re now seven years removed from the financial crisis and Americans are still very insecure about their economic situations. Almost all of the income gains have gone to those at the top of the income scale, whereas the rest of us have seen our paychecks hardly budge in over 40 years.

That’s why it was unsurprising to read these two news items today:

  1. The average US vehicle age hits record 11.5 years
  2. US home ownership rate falls to lowest level since 1967

Here are two examples of the lingering impact of the recession and our economy’s stagnant wages. It isn’t hard to understand. When you aren’t making enough money, you cannot buy a new car and you certainly cannot buy a house. Especially when “home values have jumped 34 percent since reaching a bottom in early 2012, making purchases more expensive for entry-level buyers”, according to Bloomberg.

Image courtesy of blackzheep at FreeDigitalPhotos.net

Image courtesy of blackzheep at FreeDigitalPhotos.net

As if this weren’t bad enough, the Millennial population is entering the workforce with a historical amount of student debt. The Wall Street Journal reports that the class of 2015 has (on average) $35,000 in debt. Yikes.

So don’t expect this upcoming generation to spur the economy forward by buying new homes or cars in the next five (or ten) years. That burden is on you, Generation X.