Surprise! $15 an hour minimum wage backfires

Thomas Lifson
It turns out that leftists can’t repeal the law of supply and demand. In the Seattle suburb of Seatac, adjacent to the airport and full of parking lots, hotels, and restaurants with many low wage employees, the minimum wage was hiked to $15 an hour, and the results of this social experiment are coming in. United Liberty reports:

February report from the Seattle Times revealed:

At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might soon be replaced by a less-labor-intensive cafe…

Other businesses have adjusted in ways that run the gamut from putting more work in the hands of managers, to instituting a small “living-wage surcharge” for a daily parking space near the airport.

That’s not all. According to Assunta Ng, publisher of the Northwest Asian Weekly, some employees are feeling the pinch as employers cut benefits. She recalls a conversation she had with two hotel employees who have been affected by the wage hike:

“Are you happy with the $15 wage?” I asked the full-time cleaning lady.

“It sounds good, but it’s not good,” the woman said.

“Why?” I asked.

“I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added.

The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.

What else? I asked.

“I have to pay for parking,” she said.

I then asked the part-time waitress, who was part of the catering staff.

“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.

In my hometown of Berkeley, “activists” are pushing for a referendum to raise the minimum wage to $15. I assume it will pass. And then we will see restaurants raising their prices and some closing. The McDonald’s outlet in downtown Berkeley frequently hosts “members of the homeless community” (I think that’s the preferred nomenclature these days, but I could be behind the times). If it raises prices, people with cars can drive over to Oakland or other burgs to get their Big Macs more cheaply, but the homeless can’t afford bus fare, or a ticket on the BART train. Oh, the unfairness of it all. And if all the cheap restaurants close or raise prices, they will have no place to spend their panhandling income.

It turns out that leftists can’t repeal the law of supply and demand. In the Seattle suburb of Seatac, adjacent to the airport and full of parking lots, hotels, and restaurants with many low wage employees, the minimum wage was hiked to $15 an hour, and the results of this social experiment are coming in. United Liberty reports:

February report from the Seattle Times revealed:

At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might soon be replaced by a less-labor-intensive cafe…

Other businesses have adjusted in ways that run the gamut from putting more work in the hands of managers, to instituting a small “living-wage surcharge” for a daily parking space near the airport.

That’s not all. According to Assunta Ng, publisher of the Northwest Asian Weekly, some employees are feeling the pinch as employers cut benefits. She recalls a conversation she had with two hotel employees who have been affected by the wage hike:

“Are you happy with the $15 wage?” I asked the full-time cleaning lady.

“It sounds good, but it’s not good,” the woman said.

“Why?” I asked.

“I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added.

The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.

What else? I asked.

“I have to pay for parking,” she said.

I then asked the part-time waitress, who was part of the catering staff.

“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.

In my hometown of Berkeley, “activists” are pushing for a referendum to raise the minimum wage to $15. I assume it will pass. And then we will see restaurants raising their prices and some closing. The McDonald’s outlet in downtown Berkeley frequently hosts “members of the homeless community” (I think that’s the preferred nomenclature these days, but I could be behind the times). If it raises prices, people with cars can drive over to Oakland or other burgs to get their Big Macs more cheaply, but the homeless can’t afford bus fare, or a ticket on the BART train. Oh, the unfairness of it all. And if all the cheap restaurants close or raise prices, they will have no place to spend their panhandling income.