Seattle

Damn You, $15 an Hour Minimum Wage!

Seattle Food Service Employment

Courtesy of friend of the blog, Invictus.

Anybody who actually lives, works, or eats in Seattle knows firsthand that our local restaurant industry is booming. But for those of you on a raw data diet, the Federal Reserve of St. Louis serves up the above bland-if-nourishing graph that confirms the intuition of our eyes and tastebuds: Seattle’s restaurant industry is booming. In fact, despite the doom and gloom predictions of minimum wage opponents, food service industry employment in the greater Seattle metropolitan area has actually accelerated since adopting our phased in $15 ordinance.

Damn you, $15 an hour minimum wage!

Of course, the graph above represents all of King, Snohomish, and Pierce counties, so what about Seattle proper? That’s not as easily discernible from the Fed data, but as Paul pointed out last week, a new report from the University of Washington finds wages, jobs, and hours up for Seattle’s low-wage workers over the first year of phase-in, without any observable negative impact on businesses:

The data are coming in, and they prove that contrary to the empty threats we’ve been hearing from conservatives, the sky has not fallen. Our job market is strong. Our workers are working more hours and making more money, which they are then spending locally, which allows employers to hire more people to meet with increased demand. Seattle’s march to the $15 minimum wage is right on track.

Yeah, I know, it’ll take years to tease out the full impact of the $15 ordinance, and even the analysis will be somewhat speculative and subjective. But so far, predictions of job losses remain theoretical while workers’ wage gains are very, very real.

The $15 Minimum Wage Is Apparently a Time Traveler

Raising the minimum wage is powerful. Powerful enough to lift millions out of poverty. Powerful enough to reduce dependence on social services, such as food stamps. And, apparently, powerful enough to go back in time and change unemployment numbers for teens and also spur lawmakers to create policies to address those numbers.

At least, that’s what the conservative bloggers over at ShiftWA seem to think—which would certainly explain their apparent fear of a minimum wage increase. I mean, if it’s so completely able to change the arc of time, what can’t it do?

teen unemployment minimum wage

Their most recent example of the minimum wage’s might is Seattle Mayor Ed Murray’s youth employment initiative which, they say, is a direct response to the massive decline in youth employment as a direct result of the gradual ascent to $15. First pointed out by right-wing think tank the Washington Policy Center, the initiative is designed to help encourage businesses to hire more youths, and to train young people to make them more job-ready. Because, according to WPC and Shift, it’s the minimum wage that has made it so hard for them to get hired.

Nevermind the fact that Washington’s schools are literally criminally underfunded, which could contribute to a dearth of teens with necessary skills the join the workforce (according to the Mayor’s office, “nearly 70% of employers report graduates are deficient in critical thinking and problem solving skills essential to successful job performance”)—no, the reason teens and other young folks can’t get hired is because of a law that went into effect just about 400 days ago.

That makes perfect sense, assuming that the minimum wage increase was somehow impacting employment long before it actually became a law, let alone went into effect.

Washington state has had high numbers of teen unemployment for years; a 2011 report found that “Washington teens are only slightly better off than teens in Georgia when it comes to unemployment rates” (for reference, the 2011 minimum wage in both of those states was and $8.65 and $5.15, respectively, so it’s safe to assume that was not wage-based, either). A few years later, in 2014, Washington’s minimum wage had gone up, while its teen unemployment rate had gone down to about 25%.

Today—post minimum wage increase—it’s 13%, according to the city.

Part of the reason for the decrease? Youth employment initiatives like the Mayor’s, which have existed for years and are kind of a staple in city, county, state, and federal politics. Programs like Youth at Work and the (partially) privately-funded Summer Youth Employment Program have been actively trying to place kids in jobs because it’s good for the economy, not because the minimum wage has made them impossible to hire.

Murray’s youth employment initiative is likely not intended to cover up the blunder that is the minimum wage ordinance, but rather, to fulfill a promise he made in his State of the City address this year, wherein he addressed the racial achievement gap that has plagued Seattle since long before anyone uttered the words “$15.” From his speech (wherein he announced the doubling of the youth employment initiative among other investments in racial equity programs that have nothing to do with the minimum wage):

I believe that when our young black men are at their best, Seattle is at its best. My vision is that in 10 years, all of Seattle’s young people will have the opportunity to enjoy the benefits that come with a growing city and a growing economy.

Yes, that definitely sounds like an elaborate coverup of a failed policy and not, you know, a politician addressing a systemic issue that is failing thousands of King County residents.

Unless, of course, you believe that the minimum wage is so vastly powerful that it has managed to reach back through decades to change the course of history specifically to ensure that at this very moment, the Mayor is forced to (horror of horrors) take affirmative action to help vulnerable community members find jobs because some other community members are now pulling down what’s close to a wage they can live on. Yes, that explanation makes sense.

minimum wage facts

The minimum wage: It’s magical AF

Why Minimum Wage Opponents Are Dropping Big Money to Trick You

minimum wage facts

The deeply ironic act of spending money to avoid paying workers even a cent more is not new; conservative think tanks, lobbyists, and industry groups have been shelling out money in the form of campaign donations, legal services, and “educational” materials for ages. Just look at how far the airlines and Port of Seattle went just to avoid paying SeaTac airport workers $15 an hour. That couldn’t have been cheap. And we know from a ROC report that the National Restaurant Association had (as of 2014) spent close to $13M on political donations since 1989, largely to fight proposed labor laws like increased minimum wage and sick leave.

But they’re not just throwing money at guys in suits to argue that this country is becoming a nanny state, damnit! No, they are also spending decent dollars on campaigns to actively mislead you—with clever names that sound like they may be quite scholarly.

Like, you know, MinimumWage.com:

minimum wage facts

…Which is paid for by the very-rational-sounding Employment Policies Institute (EPI—not to be confused with the other EPI, who actually do good work), who are in fact a right-wing think tank whose major focus is ensuring the minimum wage stays as low as possible.

Another “winner”: MinimumWageFacts.com:

minimum wage facts

…Which is a product of the Freedom Foundation, a Washington-based conservative think tank which has fought the unions at every possible turn.

And to be honest, I have to recognize the hustle that these groups are demonstrating. It’s extremely clever to just snatch up a domain knowing full well that people will be Googling exactly that fact. Plus, buying domains is fun! I recently did it myself!

But truly, the idea of spending real American dollars for the express purpose of spreading misinformation (more on that later) about a policy that could legitimately help people is just upsetting. And lest you think it’s not that much cash, allow me to examine.

Even just buying a website with a domain as coveted as that—hello, minimum wage dot com? Who wouldn’t want that? — is expensive, and having it designed and built is even more costly. In fact, according to a website that literally just estimates the worth of a site, MinimumWage.com is like, pretty spendy:

minimum wage facts

Yowza! $2,160? Why, that’s 298 hours worked at the minimum wage! Or, it’s how much more a worker currently making $7.25 would have after seven weeks of work if they were making $15. But of course, that’s not how much EPI actually spent; according to a 2014 tax filing, they dropped $1.7M “to maintain EPIonline.org, minimumwage.com, and tippedwage.com” as well as to do other things, like buy advertisements.

minimum wage facts

 

That’s 234,483 hours worked at the minimum wage—or about the cost to employ more than 4,500 workers full-time for a  year—but who cares? That’s chump change to an organization (which is exempt from income tax!) whose gross receipts totaled over $3.6M.

And while all of that is a sincere bummer, and also really fishy—have you ever stopped to wonder why someone would spend more money than a minimum wage person will see in a lifetime to keep those same people from making an extra few dollars each year? Like maybe, I don’t know, racism, classism, misogyny, or greed?—the truly sad part is that they’re not even doing a good job of it. I mean, EPI has an infographic with little to no information on it and their blog posts on the subject routinely ignore very salient research from the University of Washington, UC Berkley, the Cornell School of Hotel Administration, and other valuable resources.

And the Freedom Foundation’s site is a true nightmare. The FAQ is literally dummy text:

minimum wage facts

…and their research page may as well be, as it’s more than half full of citations from the same researcher who—surprise! Works for EPI!

minimum wage facts

 

Now, I am sure opponents of the minimum wage will gleefully point to the fact that as we speak, I am getting paid real American dollars to write this blog post. And that SEIU and other labor and interest groups have also spent money to further the idea that it’s good for the economy when workers have more money. But if that is your counterpoint—that we, too, are making it rain to push our agenda—consider who that agenda helps. I have literally no financial stake in whether or not the minimum wage goes up or down. I’m doing this because I believe that people should be able to support themselves with full-time work, and that the economy is better off when people have more money in their pockets to spend on stuff in their community. Interestingly, there’s a large body of evidence from think tanks, universities—and the U. S. government—to back me on that.

So when someone tells you a scary story about how raising the minimum wage will cost you your job, ask yourself: What are they getting out of it?

 

 

It’s Ok, New York—Seattle’s Still Standing

Dear New York City,

I know that recently a certain Murdoch-owned newspaper may have tried to scare you about the potential minimum wage increase that Governor Andrew Cuomo is proposing. To make their point, this Paper Who Must Not Be Named pointed to Seattle, the land of ever-increasing rents and tall trees, as an example of a city that raised their wage and is now paying dearly with job losses that, to hear them tell it, make it sound like we’re living in a wasteland with a busted Space Needle and not a single barista in sight.

But I want to tell you, from here on the ground and with statistics and studies in hand: It’ll be ok.

seattle minimum wage job losses

When the Seattle City Council passed a $15 minimum wage 2014, they were fully aware that other cities and states would be looking to it as a model—would this grand experiment called Paying People Even A Fraction of What Their Time is Worth end poorly?

And of course, it depends on who you ask; those who are fundamentally opposed to minimum wage increases—like, for example, the American Enterprise Institute, who you may know as the sole citation of That One Newspaper’s op-ed—have found models that work for their narrative, while others, like a state economist, our own Office of Economic Development, and basically anyone else, have actually shown quite a bit of job growth.

It’s important to point out two things, though: First, that we’re not even a full year into this experiment yet. As I’ve written before, it’s just too soon to really see the impacts—positive or negative—of the new minimum wage because not even a complete 12 months has passed since workers saw a boost to their pay checks. And second, while the job losses or gains may all be hypothetical at this point, what is real is the higher earnings of thousands of workers in the city. Seattle’s job market may be cooling just like the rest of the country, or it may be booming thanks to tech jobs, or it may be a fiery hellscape of unemployed fast food workers (again! Too soon to tell!)—but what is 100% true is that workers in Seattle, this week, next week, and for the foreseeable future, are taking home more money, which they are in turn spending on things in their community. And that is truthfully—not theoretically—good for everyone.

AEI’s model doesn’t take that into account. Which you might not realize, since it was presented in the op-ed in Some Newspaper as the gospel truth.

Here on the ground in Seattle, though, I can confirm: It’s not that bad. Yes, it could potentially be slightly difficult in the short-term for farmers and non-profits (for what it’s worth, we heard the same concerns here and everyone’s still standing), but for those typically low-paid employees who have been scraping by on an unlivable wage, those raises will directly translate into more money into the economy, paying off bills and purchasing things they’ve been delaying buying.

raise the wage

And, though I’ve already presented much more evidence than that scary op-ed, I’m going to go ahead and throw in one more point of consideration: A study released just last week that concluded that Governor Cuomo’s minimum wage increase would actually boost jobs, not cost them. Not only that, but the increase in wages—which would improve the earnings of people working in a wide rage of industries, including health care workers, civil servants, individuals working in hospitality, retail, and service, and even teachers—would “include a ripple effect” that would lead to higher wages among those already earning more than $15.

All of which is to say, dearest New Yorkers, that actually, Seattle is doing fine. We’re opening new restaurants and employing lots of people and yes, struggling with our own economic issues (hello, affordable housing). But raising the wage—which, again, only just happened one! Year! Ago!—has not had the terrifying effect you may have heard.

seattle minimum wage jobs

You do you, New York, but don’t let anyone point to Seattle and say that we’re the example of what not to do on wages. Because I promise, we’re ok.

Love,

Seattle.

Here’s Why Unemployment Is Not the Best Measure of the $15 Minimum Wage

minimum wage increase

Damn you, $15 an hour minimum wage!

 

There are a handful of anti-minimum wage propagandists who jump on any monthly uptick in Seattle’s already low unemployment rate (or whatever statistic they’re obsessing on this month) as evidence that Seattle’s $15 minimum wage ordinance is an unmitigated job killer. Sure, anybody who actually lives here knows firsthand that Seattle’s economy is booming, but, you know, statistics don’t lie, or something.

Of course, it will take years to tease out the real impact of Seattle’s higher minimum wage, so all this short term analysis is just so much bullshit. But let’s for the sake of argument assume that the righties are right, and that a modestly higher minimum wage does in fact result in a modestly higher rate of unemployment.

Would that necessarily be a bad thing?

If you think about it, if you’re unemployed, what really matters to you personally is unemployment duration, not the unemployment rate — that’s the amount of time it takes you to find a new job. You know, the time during which you might expect to be unemployed.

Historically, the median unemployment duration has tended to be about 5 weeks, while the average came in somewhat higher at about 15 weeks, with both figures rising and falling somewhat in line with the unemployment rate. Likewise, the rate of longterm unemployment (defined as 27 weeks or more of unemployment) has tended to average about 1 percent, again, fluctuating somewhat in line with the overall rate of unemployment.

(The exception to all this was the Great Recession, when the rate of longterm unemployment soared compared to past downturns. Given that the number one predictor of your likelihood of finding a job is the length of time you’ve been without one, many Americans who lost jobs during the Great Recession may never work again.)

Seattle’s seasonally adjusted (though preliminary and uncorrected) unemployment rate has in fact risen about a point since bottoming out at a near historic low of 3.5 percent this summer. It would be stupid given what little data we have to blame this on our minimum wage, but again, for the sake of argument, let’s be stupid and do exactly that. So what exactly does this mean for our city’s low-wage workers?

Well, the fact is, at about 4.5 percent, Seattle’s unemployment rate is still so low as to fall within the range of what most economists consider to be “full employment,” and thus history tells us that at this rate it is reasonable to assume that unemployment duration should remain low as well. But even if unemployment duration increased substantially, Seattle’s minimum wage workers would still come out way ahead. That’s because any lost income from an increase in unemployment duration would quickly be made up by an increase in hourly wage.

At $13 an hour, Seattle’s minimum wage workers already earn $3.53 an hour more than the state’s $9.47 minimum wage, meaning it would take less than three weeks of work to make up for each additional week of lost wages at the lower state rate. Except, that’s not counting for unemployment insurance. Throw in WA state’s minimum unemployment compensation of $158 a week, and it takes only about a week and half of work at $13 an hour to make back the lost wages from each additional week of lost wages at $9.47 an hour.

Let’s put this another way. Let’s say, on January 1 of this year, two workers, Mark and Tim, got laid off from their $13 an hour jobs at a franchise of a national fast food chain. Mark immediately took a $9.47 an hour job tossing pizzas in Renton, while Tim took 14 weeks of unemployment — until April 1 — until he could find another $13 an hour job in Seattle. By September 2, Tim’s year-to-date income would already surpass Mark’s, despite three full months of unemployment! Assuming full-time work, by the end of the year, patient Tim would have out-earned Mark by more than $2,400.

But the real payoff for Tim comes in 2017, when Seattle’s minimum wage climbs to $15, and the inflation-adjusted state minimum wage inches up to maybe $9.66, tops. Over the course of the year, Tim would earn more than $11,100 more than Mark for the same 2,040 hours of full-time work!

Or, let me put this in a way even one of our city’s well-paid tech workers might understand: If you suddenly lost your current job, would your rather take another one immediately at $96,000 or would you rather take a few extra months to find a comparable job that pays $150,000? If you choose the former, I’m guessing you can’t do the math well enough to command either.

The point is, the goal of our economic policies shouldn’t be to lower unemployment or increase GDP (or boost corporate profits, for God’s sake); the goal of our economic policies should be to broadly improve the lives of our people. And while we’d rather keep the unemployment rate low — and while there’s no empirical evidence suggesting that minimum wage hikes boost unemployment — we’re more than willing to accept a modest increase in unemployment in exchange for a substantial increase in wages, if that’s what’s best for our community.

The problem with focusing on metrics like the unemployment rate is that you end up prioritizing those things that are easiest to measure rather than those that best reflect outcomes. But in the end, as I’ve said before, whatever the statistics, only Seattleites get to decide whether $15 has succeeded or failed.

Seattle’s Booming Economy Is, Apparently, A Mirage

seattle minimum wage unemploymment

Seattle: A fever dream we’re all trapped in?

Hot takes! Get your hot takes! Forbes contributor Tim Worstall has one cooling on the windowsill and you’d better grab it while it’s steaming.

Actually, even if you don’t read it today, it’ll still steam because, like warm garbage on a summer day, his consistent beat regarding the economic calamity of a higher minimum wage is only getting more ripe as time goes on.

Today, Worstall has chosen to launch an attack (kind of?) on a new paper about a year-old study. But does he refute it with evidence? Or data? Or, dare I ask, economic reasoning?

Nope! He just disagrees with it.

First let’s read the initial article that Worstall has decided to launch in on. It’s a really solid, illuminating paper by Jeannette Wicks-Lim about a study she co-authored in January of last year about the minimum wage’s impacts on the economy, and how raising the minimum wage changes consumer and employer behavior.

The current state of research on this employment question, however, finds that minimum-wage increases do not produce significant job losses. This then raises an important policy question: Why haven’t there been significant job losses when minimum wages have increased?

First, the basic law of demand actually says something quite different and more specific than just “if the price of something goes up, the quantity demanded of that thing goes down.” It actually says that if the price of something goes up—and nothing else changes—the quantity demanded of that something goes down. In the real world, however, other things are changing all the time. Moreover, raising the minimum wage itself causes businesses to change how they operate (more on this below). As a result, the minimum wage’s actual impact on jobs depends on what other factors are changing at the same time.

Well now, that sounds like a reasonable understanding of the economy. And so nuanced! But of course, Tim Worstall does not deal in nuance—and he swiftly rejected this paper in its entirety. He writes:

That’s not in fact the current finding. Which is, rather, that modest minimum wage increases seem to have modest effects. Which isn’t all that surprising; most modest things do have modest effects. But we can indeed see the effects of past minimum wage increases. We see them in the unemployment rates of teens and other disadvantaged in the American economy.

It’s not? Are you sure? It’s hard to say, as Worstall doesn’t actually cite any “current findings,” but we know of a few. Like this one and this one and also the entire history of the United States or even Tim Worstall himself. But let’s not trouble ourselves with data or facts, because Wortstall doesn’t. Let’s look at his other compelling arguments.

When Wicks-Lim uses our favorite PSBJ piece of the last year—the one that quoted business owners in their own words—to demonstrate that Seattle businesses are doing fine, Worstall pulls out the big guns.

“Actually, no” he disagrees, “we don’t quite have the detailed information yet that we would like, but we do have something indicative.”

Something indicative like all the new businesses we’ve added? Or perhaps he’s referencing this recent study from the University of Washington which found that the data “show no significant impact” on price levels and thus, no increased economic hardship being passed on to workers?

No, it’s likely (we know from past experience) that Worstall will point to the flawed economic findings of AEI, wherein economist Mark Perry attempted to demonstrate that Seattle has seen slowed growth since the beginning of the city’s march to $15. Of course, there’s one huge problem with Perry and AEI’s assertions—they notably used the Seattle region (where minimum wage is still below $10), and not Seattle proper. The region’s population is about 3.6 million; only around 650,000 can expect to be paid a higher minimum wage due to the city ordinance.

Again, there’s no way to know, as Worstall provides no data aside from his opinion that this simply cannot be true. Meanwhile, here on the ground in Seattle, it seems that our increased minimum wage has failed to result in fire and brimstone and the collapse of the local economy. And yet, somehow, Worstall comes to the conclusion that “in each area that has that higher minimum wage, we are seeing slower restaurant wage growth than in areas without that higher minimum wage.”

Which means there’s only one real possibility here: All of us here in Seattle are simply dreaming. We have fabricated this mythical city wherein a moderate, gradual increase of the minimum wage does not, in fact, completely level the city and lead to a giant spike in unemployment. We are all imaging Seattle and only Tim Worstall and his omnipotent, data-resistant feelings about the situation can possibly indicate the truth.

A Property Tax Primer (or Why Prop 1 Opponents Don’t Know What They’re Saying When They Say Property Taxes Are Too High)

One of the most frustrating things about covering property tax measures like Seattle’s Proposition 1 is that most people don’t understand the way property taxes work.

From a budget writer’s perspective, the property tax is the best tax ever, because if done correctly, it almost always brings in exactly the amount of money projected. That’s because, unlike the stupid, stupid sales tax, budget writers don’t actually set a rate and just cross their fingers hoping that the money comes in; they request a specific dollar value—for example, about $95 million a year over nine years for Proposition 1’s “Let’s Move Seattle” transportation levy—and then the county assessor adjusts the property tax rate annually based on current assessed value (subject to statutory limits) in order to generate the requested revenue. If property values rise from year to year, the rate goes down; if property values fall as they did when the real estate bubble went pop, the rate goes up. But if passed, Prop 1 is almost guaranteed to generate that $95 million a year.

Over the long run, nominal property values will almost certainly rise. So while the voters guide projects a tax rate of $0.62 per $1,000 of assessed value in year one, even a relatively modest 5 percent average annual rise in home values would leave the rate at about $0.39 per $1,000 of assessed value by year nine.

But unfortunately for city budget writers, as reliable as the property tax is, it is subject to two very important limitations. The first is known as the “statutory dollar rate limit”: the City of Seattle’s property tax authority is limited to $3.60 per $1,000 of assessed value. That is the maximum theoretical rate the city can levy without voter approval. But thanks to the second limit, known as I-747’s “101 percent limit” (or more accurately: “Tim Eyman’s Revenge”), the city’s actual regular levy authority falls far short of the statutory dollar rate limit.

Under the growth limit factor first enacted in the 1970s, and then punitively reduced to 101 percent under Eyman’s I-747 (and later reinstated by a cowardly legislature after the state supreme court tossed out the initiative), the dollar value of property taxes collected may not exceed 101 percent of the taxes collected in the highest of the three most recent years, plus an allowance for net increased property value in the district resulting from new construction.

Seattle property tax rates

Don’t know about you, but my property taxes aren’t so bad.

I know—that’s very complicated. But suffice it to say that thanks to the 101 percent limit, revenues generated from Seattle’s regular levy generally don’t even keep pace with inflation, let alone rising property values. As a result, the actual maximum regular levy rate available to the city council has been steadily falling as I-747’s 101 percent limit has ratcheted down revenue growth.

Fortunately, state law does allow for “lid lifts,”* enabling the city to raise revenues in excess of the 101 percent limit, but within the $3.60 statutory cap, subject to voter approval. That’s what Prop 1 is—a lid lift—as was the expiring “Bridging the Gap” it replaces. When you add up Seattle’s regular levy together with its various lid lifts, Seattle is currently levying a combined rate of just over $2.62 per $1,000 of assessed value. Add on Prop 1’s proposed $0.62 per $1,000 and our combined rate would still come in below the $3.29 per $1,000 we paid as recently as 2013! And our current combined rate of $9.27—city, county, schools, state, everything—is our lowest combined rate in six years.

Compared to the rest of the nation, that’s pretty damn low, ranking Seattle’s effective rate at 38th out the 51 largest cities in each state and the District of Columbia. (Also, we don’t have an income tax. So I suppose yay for our low taxes, if you’re into that sort of thing.)

And it’s not just our property tax rate that’s held relatively flat. According to data compiled by the Seattle Times, the property tax bill on a median Seattle home climbed from $3,214 in 2005 to $4,022 last year—an increase of $808, or 25.1 percent. But inflation increased almost 22 percent over the same period, resulting in a negligible increase of only about a hundred bucks in real dollars.

How is this possible? How could Seattle’s property tax hold steady in both rate and real dollars even in the face of skyrocketing home values and a seemingly endless parade of voter-approved levies?

Well, one reason this sounds so counterintuitive is that while everybody makes a big deal every time we put a new levy on the ballot, nobody sends you as much as postcard when these levies ultimately expire—and voter-approved lid lifts (typically 6 to 9 years) are expiring all the time! For example, sure, “Let’s Move Seattle” would add an additional $275 a year to the property tax bill of the median Seattle homeowner, but only after “Bridging the Gap’s” $130 a year levy expires. That’s not nothing. But it’s not really a $275 increase.

Second—and this is a concept that many folks find difficult to wrap their minds around—your property tax bill doesn’t necessarily rise or fall with your home value. Rather, your property tax bill mostly rises or falls when your home value rises or falls relative to median value. Again, this is the way property taxes work: we levy a dollar amount, not a set rate. Prop 1 is asking for $95 million a year. If Seattle home prices rise 10 percent, Prop 1 still only raises $95 million—we’ll all still collectively pay the same amount, just at a lower rate. However, if your home’s value rises faster than median, while my home’s value rises slower, your share of that $95 million will go up while mine goes down.

Again, I know, it’s all very complicated. But the point is, if you oppose Prop 1’s $930 million “Let’s Move Seattle” transportation levy because you think it’s filled with pork (or filled with the wrong pork), well, I suppose there may be coherent arguments to make against the measure. But if you oppose Prop 1 because we’re “piling one pricey property tax levy on top of another,” then you’re not being honest either to yourself or to your readers.

 


* There is also the option of rarely-used voter-approved “excess levies,” which get around the statutory cap entirely, but since they are limited to 1 year, they’re not really practical for dealing with anything but an emergency.

Only Seattleites Get to Decide Whether Seattle’s $15 Minimum Wage Succeeds or Fails

Seattle

Construction cranes dot the skyline of Seattle, north of Skunkworks HQ

I recently took some time to preemptively fend off future attacks on Seattle’s $15 minimum wage ordinance, pointing out that our local economy is currently so outlandishly strong that there’s almost nowhere for unemployment to go but up. Seattle’s current 3.15% unemployment rate has never proven to be sustainable in the past, and is unlikely to prove sustainable into the future. So when we do eventually see a bump in unemployment—and we will (be it in absolute terms or just relative to the larger state economy)—it will on its own be evidence of absolutely nothing. As I explained last week:

The real measure of Seattle’s minimum wage experiment is not whether our jobs numbers tick up or down relative to some cherry-picked starting point or some arbitrary low-wage city comparison. The real measure of success is whether Seattle can sustain a reasonably healthy and robust economy while providing all our workers a livable wage.

And if that seems like an intentionally vague metric, well, that’s exactly the point: I reject the very notion that numbers alone can provide an objective measure of what is ultimately a subjective experience.

For example, let’s say through some sort of statistical magic you really could divine that Seattle’s unemployment rate would otherwise be a half point lower if not for the “disemployment effect” of our higher minimum wage. Would that prove our $15 minimum wage a failure? Or might Seattleites be perfectly willing to choose, say, a $15 minimum wage and 3.65% unemployment over a $10 minimum wage and 3.15% unemployment?

Of course, we make economic choices like this all the time. Charged with balancing inflation versus unemployment, the Federal Reserve has long tilted toward maintaining low inflation, routinely adjusting interest rates and money supply accordingly. The fed could choose to raise its inflation target above 2% in pursuit of a tighter labor market and higher wages. But despite decades of stagnant wages, it hasn’t.

Here in Seattle we have made a different choice. We have chosen to pursue a more livable wage for all our workers, and while we don’t believe that $15 will adversely affect our local economy, in the same way that the Fed is willing to accept modestly higher unemployment in exchange for lower inflation, Seattle is willing to accept the same consequences in exchange for higher wages. How much unemployment would be too much? I’m not exactly sure. But that’s for us to decide, not some free market propagandist at a DC think tank cherrypicking food service employment data.

Writing in The Stranger back in March 2014, Nick Hanauer and Eric Liu described our high-wage economic model as “Cascadian Capitalism:”

The fundamental law of capitalism is that when workers have more money, businesses have more customers. Raising the minimum wage shifts money in the economy to those with the highest propensity to spend, increasing sales for businesses, which in turn leads to hiring, and more sales.

… The danger we have to face is that economic inequality always begets political inequality, which always begets more economic inequality. Low-wage workers stuck on a path to poverty are not only weak customers, they’re also anemic taxpayers, absent citizens, and inattentive neighbors.

To put it in the affirmative, we have a chance now with $15 to make Seattle as civically robust as it already is economically. We have a chance to set off a virtuous cycle in which economic participation begets civic participation. True prosperity doesn’t trickle down from above, and neither does great citizenship. Both are middle-out phenomena.

Of course, if other cities—say $7.25-an-hour havens like Houston, Charlotte, and Atlanta—would prefer to pursue a low-wage trickle-down economy, that’s up to them. And if they’re happy with the result, that’s up to them too. But given the choice, I’m confident most Seattleites would choose Cascadian Capitalism over Confederate Capitalism any day of the week.