@TBPInvictus here
It’s been a few months since the first increase in the Seattle minimum wage (see here for the schedule of bump ups).
Even before the initial April 1 rise, we were treated to a chorus of conservative voices claiming that the restaurant business in Seattle was doomed. The nexus for many of the claims was an outright fabrication by the Washington Policy Center’s Paul Guppy (emphasis mine):
As the implementation date for Seattle’s strict $15 per hour minimum wage law approaches, the city is experiencing a rising trend in restaurant closures. The tough new law goes into effect April 1st.
There are really two lies in there: First, Guppy implies the rate was set to go straight to $15, which it was not. But the bigger lie was the second — that the city was already undergoing a “rising trend in restaurant closures.”
That lie was picked up and disseminated through many conservative outlets, including the American Enterprise Institute, Forbes, Hot Air, mynorthwest.com, Shift Washington, and others:
Mark Perry’s AEI story: Seattle’s new minimum wage law takes effect April 1 but is already leading to restaurant closings and job losses
Forbes: Restaurants are closing at higher than normal rates.
Headline at Hot Air: Seattle eateries closing as $15 minimum wage approaches
Dori Monson at mynorthwest.com: Seattle restaurants are closing because of the coming of $15 an hour.
Headline at ShiftWA: More Seattle restaurants close doors as $15 minimum wage approaches
Anyone who’s been following the data — either here or via my Twitter feed — knows that the Seattle restaurant business continues to grow briskly. Forget the alt.narrative, we have been looking at restaurant openings and closings, as well as new restaurant permit applications. When we track the various restaurant-related NAICS categories for Seattle: Limited-service restaurants, full-service restaurants, mobile food services, drinking places (alcoholic beverages), and snack and non-alcoholic beverage bars, we see the actual numbers, the hard data. This is the world of reality — not ideological driven narrative or wishful thinking.
As the new minimum wage has failed to kill the Seattle restaurant business, it’s apparently time to move the goalposts, as I saw recently via these Twitter exchanges:
@TBPInvictus @mark_dow I understand but let’s reserve judgement on the health of the industry when it hits 15..
— Anthony Grisanti (@AnthonyGriz) June 28, 2015
@mark_dow @TBPInvictus ok at 11..places haven’t closed ..let’s see what another 4 dollars will do ..that’s all I’m saying .. — Anthony Grisanti (@AnthonyGriz) June 28, 2015
So, now that devastation and despair have not been visited upon the fair city of Seattle, well, we’ll just have to wait and see now, won’t we?
Eventually, for a variety of reasons, the growth of the Seattle restaurant business will slow, and at some point might well contract. However, as I’ve also repeatedly pointed out, my in-the-know contacts in Seattle suggest that it will be rent before minimum wage that causes such a shift.
Now, to be fair, I’d not known about Mr. Grisanti or his position prior to my recent interactions with him on Twitter. Maybe he sincerely believes that $11 is okay but, perhaps, $12.38 would be too much. I don’t know. What I do know is that the vast majority of conservative commentators called for disaster before the fact, have shot themselves in the foot, and have offered no explanations or apologies for having done so.
For the record, I reached out to Mr. Guppy some time ago and pointed out the error in his piece that was subsequently seized upon by other conservative outlets. After a vigorous debate about whether or not I possessed any integrity as a pseudonymous blogger (“Someone who hides his identity is in no position to instruct others about integrity.”), Mr. Guppy explained that no correction would be forthcoming because the Washington Policy Center had accurately cited another source – Seattle Magazine – that had recently written a piece on some Seattle restaurants that had closed:
Regarding the substance, we’re not going to agree on this. 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.
Yes, I saw the issue one way – based on that actual data – and Mr. Guppy saw it another, based on his ability to accurately quote a source, take some of that source’s content out of context, and twist it into what he wanted it to be to fit his ideological agenda.
In the interest of quoting sources accurately, I’ll share this excerpt from that very same piece (emphasis mine):
Though none of our local departing/transitioning restaurateurs who announced their plans last month have mentioned this as an issue*, another major factor affecting restaurant futures in our city is the impending minimum wage hike to $15 per hour.
So “none” – not one – of the departing restaurateurs cited the impending minimum wage, yet the Washington Policy Center and others claimed it was already having an adverse effect. The article’s author made a grievous error, in my opinion, by speculating about what might or might not happen based on the impending hike (which was not, of course, directly to $15).
I will close again – you may be feeling some déjà vu here – with a note about the Seattle Magazine piece: I corresponded with Ms. Jones, that piece’s author, 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 me thus:
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.
The beauty (if one can call it that) of being a movement conservative, particularly these days, is the complete absence of shame as long as you remain ideologically pure: Error is defined by degree of deviation, not by degree of verisimilitude.
Amazing how the $15 minimum wage issue is completely ignoring automation and robotics. What could possibly be a greater gift than a massive margin expansion for business owners to help open the door for the adoption of robots to their workplace?
Capital costs? Robots aren’t magic and the food produced by machines would have the same delectable qualities as airplane food, or MREs, frozen tv dinners, or Campbell’s soup. No style, no taste, no feedback to the producer to improve flavor profiles, no art.
Fast food already has a robot version called a convenience store. The robot puts the frozen burrito or hot pocket into the microwave, pushes a button, removes the item, pays, eats. No labor cost and you get to be the robot.
Early 2007 fed min wage underperformed Malthus. Between 1968 and early 2007, US population grew 50% but the fed min dropped off more than one-third to almost half. Luckily subsequent raises caught up with Malthus — if not with almost doubled productivity …
… suggesting that the US restaurant business serves low income patrons and therefore must rely on lowest paid labor — at least that’s what it suggests to Republicans — who see the whole country in Bangladesh terms: forever cutting back on health care and education, etc., to save impoverished us from bankruptcy.
Excellent – keep it coming. If their ideology is in conflict with facts, it is obviously the facts that are wrong. No wonder economic policy under these right wing clowns always turns out to be a disaster. Either we lack growth, explode the deficits or explode the economy leaving behind an extended period of below trend growth.
The more outlandish the statements, the more attention they get. The more errors they make, the more attention they get from those demanding corrections. The angrier they make people, the happier it makes right wing ideologues.
Rents may indeed be a bigger force but there’s no denying that higher labor costs are an additional net economic drag, not a net economic benefit. Yes, we’ll have to wait and see and the effects will take years to accumulate so any judgment now is premature.
Every time there is an increase in the minimum wage anywhere, a lot of (conservative) people raise the cry about drag on the economy and predict disaster. And each and every time since the minimum wage was first enacted and with every increase, they’ve been wrong.
Business can do a lot to decrease expenses and make up for paying employees enough to be able to live. They can start by taking slightly less profit and (in the case of large corps, not mom-n-pops) paying the folks in the executive suite a little less money.