A Pizza Place Closes in Seattle . . .

Barry here: I know Invictus personally for more than a decade. I also know he works at a shop that does not allow its staff to publish economic and data analysis outside of their formal imprimatur. I would not allow his work to be published here if I was not confident about his respect for data, his integrity and his intelligence.

Read on:

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@TBPInvictus:

In two recent pieces (see here and here), I pushed back on the notion that Seattle’s new minimum wage had caused a “a rising trend in restaurant closures,” as that claim was wholly unsupported by data I found by contacting the City of Seattle’s Office of Economic and Financial Analysis (which, by the way, anyone could have done).

As an aside, I asked the Washington Policy Center – the nexus of the misinformation – to correct their mistaken assertion.

Instead of conceding they’d gotten it wrong, which they clearly had, they made it about me and my pseudonymity, as if those who use pseudonyms have no claim to facts:

“Someone who hides his identity is in no position to instruct others about integrity. We accurately cited our sources and stand (quite publically [sic]) behind our blog. If you disagree, you’re welcome to your opinion based on your view of your own sources. Engaging in public debate means having the courage to stand up for your views. I don’t have much respect for someone who wants to judge others and issue stately calls to “do the right thing” from behind a cloak of anonymity. You see the issue one way, based on data you find persuasive, and we see it another. You’re demanding some sort of correction, but that’s not going to happen because I don’t think it’s merited. We quoted our sources accurately. You are welcome to expound your views any way you like, and in any manner you like, but we are not required to agree.”

So, accurately citing poor, misinformed, and data-free sources is okay in some policy circles, so long as you do it by name. Got it.

But I digress.

In support of my argument, I produced, among other data, the following graph detailing – as the title states – the City of Seattle Food Business Count.

Beyond that, my contact in Seattle, Anthony Cacallori, whose job it is to monitor the local economy, and who’s in a position to have some insight into matters such as these, had this to say:

“As mentioned before, I think the biggest threat to restaurants in Seattle right now are rent prices. I’ve seen a few articles since we last spoke where the owners of closing restaurants themselves indicated this as the factor in their business decision. Things here are crazy! To put it into perspective, rent control seems to be the topic du jour in local media. That’s not something I ever thought I’d hear brought up in Seattle, but here we are.”

In the face of all the data indicating that the only trend in Seattle’s business environment thus far is currently for more businesses, not less, I must now concede defeat because AEI’s Mark Perry (@mark_j_perry) has discovered that a pizzeria is closing, and that the owner attributes said closure to the rise in the minimum wage. Not surprisingly, Mark makes no mention of this January article citing the planned 2015 openings of 29 – that’s twenty nine – new restaurants, 27 if we net out the two closures mentioned.

There’s also this, from Working Washington – a piece highlighting over a dozen pizzerias that are currently hiring in Seattle. Maybe the pizzeria that’s closing just didn’t serve good pizza? Just sayin’.

Herewith Professor Perry delivers the coup de grâce:

So, sadly, when I place the copious and thorough data I found refuting the claim of a “rising trend of restaurant closures” against the impending closure of one pizzeria on which Professor Perry is hanging his hat, I have no choice but to concede defeat. Your one pizzeria closure trumps the data – encompassing thousands of establishments – I found and presented, Mark. As an economist, certainly you’re aware of the fact that one data point trumps hundreds or thousands, right?

I’d be remiss if I didn’t note that Professor Perry was among those who spread the false information that originated at the Washington Policy Center. His piece at AEI was titled [emphasis mine]: Seattle’s new minimum wage law takes effect April 1 but is already leading to restaurant closings and job losses. In that piece, he wrote that [emphasis mine] “the “new math” of the minimum wage is already starting to “break the system” for Seattle’s restaurant owners.”

However, in the face of data to the contrary, Professor Perry responded to me as follows:

Now, the data I provided are not “from last year.” In fact, following on the work of Evan Soltas, I’ve been monitoring the NAICS codes for the food service industry in Seattle via up to date licensed business counts. That chart (capturing more of the 72 series businesses than the chart above) looks like this:

Second, and arguably more importantly, if Professor Perry wants to “check back in a year,” he should not have been so quick to jump on that misbegotten bandwagon and claim that the minimum wage was “already” having an adverse impact.

Lest I be misinterpreted or misunderstood, I will be crystal clear here:

1. It’s a shame when any business closes, for whatever reason.
2. I never said nor implied there might not be casualties from Seattle’s minimum wage move. I did say that “the Seattle experiment will bear watching as the city’s minimum wage gradually scales higher. At the moment, however, it certainly appears to be much ado about nothing.”

Finally, I should say a word about Sara Jones, the reporter of the piece that conservatives latched on to. I’ve corresponded with Ms. Jones, and came away with the impression that she was very surprised at the way her article had been hijacked. She closed one piece of correspondence with this:

All of that said, this has been a big learning experience for me and I would craft the article differently next time. I never intended to claim and do not claim now that restaurants are closing due to the minimum wage increase.

 So, there it is from the original source. Shame on those who hijacked, twisted, and contorted that story to fit their narrative.