The Seattle Times got it wrong this week in an appearance of that self-appointed arbiter of veritas, “Truth Needle,” by food writer Bethany Jean Clement, about our blog on the $15 minimum wage law and restaurant closings in Seattle. Here’s why.
Our blog accurately reported that Seattle Magazine said in a March 4th article, “Why are so many Seattle restaurants closing lately?”, that a “major factor” affecting restaurants in Seattle “is the impending minimum wage hike to $15 an hour.” The author, Sara Jones, described the new law as a “key consideration” for Seattle restaurants.
Our blog also accurately reported that Seattle Magazine mentioned supporting articles in The Seattle Times and Eater.com that have reported extensively on “restaurant owners’ many concerns about how to compensate for the extra funds that will now be required for labor...” under the $15 minimum wage law.
The Times’ food reporter did important work in contacting three Seattle restaurant owners and interviewing them about why they had recently closed or moved restaurants. However, she operated from the false assumption that she was “debunking a rumor” as the Times describes it, about the impact of the $15 minimum wage law. She said the three owners she talked to denied the $15 minimum wage law is the reason they closed or moved their restaurants.
She did not, however, ask them about whether rising wage costs were a “major factor” or a “key consideration” in their business decisions, as Seattle Magazine, reported and which Washington Policy Center reported accurately. And she did not contact Washington Policy Center for further information. As a result, her “Truth Needle” article is wrong, because the reporter was operating on a false assumption from the beginning.
Our blog accurately noted that restaurants close for many reasons and that in Seattle, as the new mandate goes into effect, the $15 minimum wage law had added a unique factor. There is simply no question Seattle’s $15 minimum wage law is a concern for local business owners, and is a factor in whether restaurants and other businesses remain viable, for several reasons.
First, labor cost is always a factor for businesses. Like other economic inputs, such as rent, taxes, utilities, materials and marketing, the cost of wages and benefits is a consideration in keeping a business profitable. Some types of business incur greater labor costs than others. Restaurants are at the high end, with labor reportedly making up 30 to 40 percent of the cost to remain open.
Restaurants operate on thin profit margins of only three to five percent and the sector is highly competitive, making rising labor costs an even more important consideration for this type of enterprise.
Second, Seattle’s $15 minimum wage law is a factor for business owners because many of them say it is. Business owners have been expressing their concern over a $15 minimum wage law since the idea was first proposed. Here are some examples, as reported by Eater.com.
“I wish they would’ve done a little more research on how it would affect small business.”
“I don’t think it’s a bad thing but for smaller businesses only the super strong will survive.”
“This is a game changer. 15Now folks missed the target by about 3,000 miles. But we sit in the crossfire.”
“We operate on a very thin margin as it is.?? “Servers will be working harder for less money with less support.”
“If labor comprises significantly more than 30 percent, the restaurant won’t be in business for very long.”
Respected restaurateur Tom Douglas noted, “Maybe there are too many restaurants and this [$15 minimum wage] will be a natural way to cull out the weakest among them.”
Third, NBC News reporter Cheryl Hurd recently described the real-world impact of the minimum wage law in the San Francisco area; “Chinatown businesses struggle over Oakland’s new minimum wage.”
She reports, “The new minimum wage forced owner of the Legendary Palace restaurant to close its doors on Feb. 26th. Officials said four restaurants and six grocery stores have closed since January.” A member of the Chinatown Chamber of Commerce said, “With this minimum wage kicking in, it’s the final nail to the coffin.”
Such clear statements about damage caused by a local minimum wage law are rare, because business owners are understandably reluctant to speak out.
In Seattle, 15Now threatens employers with walk-outs, pickets and boycotts if they draw unwanted attention. 15Now is not exactly kind, courteous and understanding toward people with different views, so why make yourself a target?
A final point. While the Time’s food reporter did important work in interviewing three business owners, it is odd the editor choose “Truth Needle”, a format usually reserved for political campaigns, to pronounce judgment on a blog by a policy research organization, especially when the policy organization had accurately reported its sources.
It would have been more appropriate for The Seattle Times to present its findings as a straight news story, one adding to the public’s understanding of this evolving issue.
With so many conflicting viewpoints, the more information available to the public the better – without one news organization taking on the role of summarily pronouncing “False” against information provided by others.