Publicola Makes the Best Argument Against Minimum Wage Hike

April 4, 2014

In a story on Seattle rent prices yesterday, the left-leaning Publicola asserts that the “most interesting” data point from an analysis of Seattle’s rental-market is that, “The law of supply and demand is, it turns out, an actual thing."  It seems the analysis shows that just as this most basic tenet of economics predicts, demand is inextricably linked to supply.  The higher the cost of something, the lower the demand, and vice versa.  

The fact Publicola finds this economic truism to be “the most interesting” take away from the rental-market analysis is telling.  Publicola’s surprise that the “law of supply and demand works,” offers an insight into the mental gymnastics behind the insistence by supporters of a higher minimum wage that increasing the wage businesses must pay their employees will not result in a reduction in the number of jobs created by those businesses.  In fact, turning the law of supply and demand on its head, minimum wage advocates argue the reverse; a higher minimum wage will actually stimulate the economy and create more jobs.

Of course, while Publicola might be surprised that the “law of supply and demand works,” business owners are not.  Businesses live or die by the law of supply and demand, and the vast majority do not believe a $15 minimum wage will help them grow their business or create jobs.

Business owners have been warning of the consequences of a $15 minimum wage in Seattle since the idea first took root.  Even those with solidly liberal resumes have said a 60% increase in the cost of labor is a job killer.  Calling a $15 wage “possibly fatal,” the owner of the beloved Elliot Bay Book Company in Seattle says he would have to lay-off five of his 28 employees just to stay profitable, or close his small businesses’ doors.

It’s simple supply and demand.  When the cost of something increases—in this case labor—the demand will decrease.  Employers will make do with fewer employees, or they will go out of business.  Notes one small business owner, “It isn’t fear-mongering; it’s just math.”

Unfortunately, many supporters of a $15 minimum wage do not accept the math.  They talk only of the benefits and refuse to acknowledge there is any cost or trade off for a $15 wage; the trade off being the benefit of higher wages for those who have a job at the cost of fewer job opportunities for others.  

In fact, many of these supporters are demonizing the small business owners who warn of the predictable consequences of a $15 wage.  The Seattle Times yesterday featured local small business owners who have been jeered and heckled during public debates on the issue.  And an earlier Times article featured a “liberal do gooder” Seattle restaurant owner who routinely feeds the homeless, volunteers at public schools and organizes fundraisers for environmental causes, complaining that the the wage movement has become “cultlike,” with dissenters, regardless of their liberal resume, being attacked for being “too rich” or “exploiting the working poor.”

Even the liberal blog The Slog has weighed in on the bullying tactics of the wage supporters, applauding the owner of Elliot Bay Book Company as “one of the few courageous enough to go on record publicly” on the issue:

“Most small-business owners aren't even speaking up yet, because speaking up has its own risks: Small-business owners are being pilloried right and left by righteous internet commenters for saying they don't know how to make a 60 percent jump in worker costs pencil out.”

Liberal business owners get it.  The Slog gets it. Let's hope the "righteous internet commentators" take note and follow Publicola's newly embraced understanding of the laws of supply and demand.


Not sure what this city

Not sure what this city expected when the elected Murray and Sawant. discussed Murray holding a one-day symposium that was loaded with leftists.
---The panel discussion even features an avowed socialist, Seattle City Councilor Kshama Sawant.

The Freedom Foundation, a free-market think tank based in Olympia, calculated that of the 18 scheduled speakers, only two haven’t publicly expressed an opinion on the issue and only one presenter is against raising the wage.

Max Nelsen, a senior labor analyst with the Freedom Foundation, slammed the mayor’s office for failing to provide some balance during the conference.

“Seattle had a great opportunity to use the symposium to have a real debate and dialogue about the pros and cons of a $15 minimum wage,” Nelsen told

“Instead, the city decided to have a completely one-sided echo chamber of pro-minimum wage speakers. The city’s decision-making process will certainly suffer by choosing to ignore the voices of the many economics, academics and policy experts who have grave concerns about dramatically increasing the minimum wage.”