Seattle’s $15 Minimum Wage Not in Effect, But Already Killing Jobs
It seems Seattle’s anti-business policies are taking their toll on the city’s small businesses. And while the city’s most controversial policy, a proposed $15 minimum wage, has not been passed yet, it is already having a chilling affect on jobs.
After decades in Seattle, Northwest Caster and Equipment recently made the difficult decision to move the business to unincorporated Lynnwood, according to a report by KOMO news. The owner of the family business blames Seattle’s increasingly difficult business climate for the move: “It just seems like increasingly the city’s become a more difficult place to do business.”
The city’s proposed $15 minimum wage was tops on the list of complaints. “If I’m going to bring someone in on an entry level, I’d prefer to start them out where I’d like to start them out, rather than having that dictated to me.”
A commercial property landlord echoes those concerns about the $15 minimum wage, noting several tenants have signaled they may not renew their leases if it becomes law: “It’s just too expensive to operate in the city.”
And in a story today, KUOW reports that small businesses throughout the city are panicking over the super high minimum wage. Multiple small business owners told KUOW they are holding off on opening new business or expanding their current business in Seattle, while others said they are delaying plans to hire new workers.
One of those business owners is a well-known and active supporter of “progressive” labor policies, including a higher minimum wage. Jody Hall, owner of Cupcake Royale, initially supported a $15 minimum wage. But now Hall admits the proposed policy is, “keeping me up at night like nothing ever has.”
While Hall has serious concerns with Mayor Ed Murray’s plan to phase in a $15 minimum wage over seven years with a temporary tip credit, her biggest fear is if voters approve the radical charter amendment sponsored by the group 15Now. The charter amendment would force all large employers to begin paying $15 in 2015, and would give small business owners just three years to acclimate to the high wage. And the 15Now proposal would not allow for any tip credit.
If the charter amendment passes, Hall says she would be forced to close half of her seven locations and lay off 50 of her 100 workers.
But beyond the differences between Mayor Murray’s proposal or the more aggressive 15Now proposal, Hall says she now has “serious second thoughts” about a $15 minimum wage in general, especially since Seattle would be “going it alone” with a wage that is significantly higher than any other minimum wage in the nation.
Hall’s second thoughts about a $15 minimum wage have led to second thoughts about expanding her business. She was set to open a new business in Seattle this year, but has tabled the plan until after voters have their say on the charter amendment in the November election. Hall says if she considers any new locations before then, they will be outside the city limits.
Earlier this year a study commissioned by Mayor Murray and the Seattle City Council determined a $15 minimum wage would help low wage workers and reduce poverty, but omitted any estimations on the impact on employment. A subsequent study by a Seattle economist predicted significant job loss.
It would seem the Seattle economist was spot on. The $15 wage is not yet in effect and already it is pushing businesses into neighboring cities and killing jobs as business owners put the brakes on growing their companies and hiring new workers.