Sawant Proposes Three-Year Minimum Wage Phase-In for Small Businesses, Starting at $11/Hour in 2015

Comments

1
What about the UW?
2
$15 Eventually!
3
Well, now time for a counterproposal.
4
It won't flood cash to the McDonald's employees right away - most of them would be exempt as small business operated by local owners. And the same would go for most franchised restaurants like Subway and Taco Bell. Plus, you can bet those owners will cut back on all benefits, so goodbye vacation, insurance, and everything else you get now.
5

The issue is what Sawant and her followers call a "big business" is actually a small business. If a restaurant owner in Seattle has two restaurants that employs 80 people in total, the Red Shirts will call that a "big business" and still hit them with a 61% increase in labor costs. No dice.
6
I think this kind of tiered system would probably get overturned in the courts (or have loopholes so big that you could drive a truck through them).
7
"... It provides independent businesses who give the city its character a competitive edge over the giant sucking sound of multinational corporations. ..."

Well put. But that also includes the predatory sound of sucking the best workers away from the independents - an additional burden the independents don't need while trying to re-tool their financial models for this new reality. If I were a multinational or company of scale, and have to pay the higher rate anyway, I'd certainly use the "transition" to upgrade my work force before the field is level again.
8
Ksellout Sawellout? Or did she have no choice about joining the world of real politics?
9
I think Sawant is doing this to call the bluff of Meinert and Keck and the chamber of commerce. They were never serious about raising the minimum wage, and now that she has told them to put their money where their mouth is, they're going to Seattle Process this like a motherfucker, and kill it. Everyone will see they are not acting in good faith.

Workers know this. But we had to play along because they kept calling us inflexible ideologues. And belittled us as children, like the old, white patriarchs they are.

But now? Now we'll see who is really stonewalling. It's business, big and small business.

And that sets us up to put a solid $15/hr to a vote and win, and every time they whine about process, we can point to their rejection of Sawant's offer.

None of this is some new genius politics that Sawant has invented. Labor has been batting away these disingenuous offers from business for years. It's how the wage negotiation game is played. Sawant comes from where they know how to win this game. Seattle's clever rich class is way behind the learning curve.

Think that's funny? Ask yourself why no business group will release any poll results about $15/hr. You think they haven't polled the voters to see where they stand? They've seen the numbers and they won't release them because it shows the writing on the wall.

See you in November, guys. See you in November.
10
nice post 9
11
And @1 UW should DEFINITELY be paying $15 an hour to all the poor people doing the shit work around campus. Everyone making more than 6 figures there should bear a fat chunk of the cost.

This, of course, won't happen because bark as it might about being a progressive institution, UW is wildly elitist in how it distributes funds. Every cut that came down during the financial crisis nearly totally protected the fat (including high wage way left libs, rad. fems., and POC profs) and went straight at the lean.
12
@5

I remember when you were using the phase in as a reason to attack Sawant. So go fuck yourself.

And everyone else, including Dominque Holdeen, who said, "derpa derr, Sawant don't want no phase in"?

Go fuck yourselves.
13
@4 - "Plus, you can bet those [franchised restaurants] owners will cut back on all benefits, so goodbye vacation, insurance, and everything else you get now."

Since when do McDonalds' et al provide vacation and insurance? The only 'benefit' they provide is a free meal, which is really just a low-cost tool to keep workers on-site and deny them a true break during their shift.
14
Clara T., I know. I work there. I'm just wondering how they're going to play it as a state institution that has some students working for $9.32/hr, when swaths of the staff haven't received raises in five years, etc., etc. The disparity in pay between above the line and below the line there is just...it leaves me sputtering.

But it is a wonderfully complex place - state funding, grant funding, contracts, as an entity it predates federal nonprofit code, an enormous economic driver, unions, stakeholders every which way.

Should be a glorious mess with extra whinging on top.
15
Wait, Sawant has already compromised when no one else has put a proposal out?

She must have looked at that small, sad bunch of morons out marching with her yesterday and realized her goose was cooked.
16
So, this is how tipping ends.

Deducting that $15 an hour from how much I tip will result in a couple dollars, at the most, and only at restaurants. Everywhere else, likely zero tip.

I would expect the menu prices to go up to cover the wage increase.

This is rearranging of the deck chairs as long as the tax structure favors people that make money from having money, and not actual effort.
17
@1, some of those are folks are state employees. Good luck forcing wage requirements on the state (or Port).
18
@17, most, not some. And that's part of what's so interesting. Mostly I'm just wondering if they're going to take the craven or the not-craven route.
19
why is your labor at one subway worth less than your labor at a subway that is owned by a guy who has five of them? why is your work mopping floors at Elliot bay books deemed worth less than your work mopping floors at schuck's auto supply? small biz includes....every doctor...every lawyer, or most of them...dentists..finance advisors in Madison park earning $700K gross with little cost for home office and one employee. why would we exempt THAT kind of business?
why do any attributes of the employer like size, or revenues or quirkiness (assuming that's the standard which of course it couldn't be) determine your pay under a MW law?
this proposal divides workers unfairly. sure, she's trying to forestall small biz opposition. but hello! the proposal will have a surfeit of oppo anyway, no mater what it says. doesn't seem right to throw many workers under the bus.

btw, how many? 30% of all MW workers? 50%? does anyone know? why even one?
20
@5

As I show here, that "61% labor cost hike" you keep trotting out is deeply dishonest.

A typical restaurant in Seattle today would be looking at around 43% increase in hourly labor costs, resulting in turn in about an 11% bump in operating cost for the business as a whole.

Pass on a bit more than that to customers (to account for slightly lower traffic), and the price hike on the menu would amount to...

15%

You seem to think that can't possibly work, but it sure looks feasible to me.
21
@20, exactly, and I think that's the end of tipping 15%.
22
@9..you asked if we thought that was funny. I'm laughing...
23
I gladly will end tipping. why should all that income be off the books? not being used to calculate social security -- that hurts those workers. and us. not being used for income tax. not being used for b and o tax.

why is any revenue off the books?
24
@21

Could be, who knows? From what I understand, tipping is a facet of culture that doesn't tell you much, one way or the other, about the economic health of a society or its level of inequality. And those things seem quite a bit more important to me than tipping, per se.
25
@22

You guys bluster and bluff but you never pull out any facts. It's always the laughter, the name calling, the appeals to authority.

How come you never cite actual instances of jobs lost due to the minimum wage? How come you never cite actual decreases in businesses? Why do you never cite actual economic harm? Even after I-518, you never point to any harmful impact. How come? Australia's minimum wage -- nationwide -- is over $15. Why don't you cite evidence that Australia is going to become "another Detroit"? And do you know what the actual minimum wage is in Detroit?

Also, how come none of you guys have opened your books? We heard faint promises that some local businesses were going to open their books to prove that they can't afford $15. But then... no books. How come?

You guys say the poll showing $15/hr. has 68% support in Seattle is biased. So where's your poll? Doesn't the Chamber of Grown Ups care enough about this terrible wage increase to commission a poll? Or could it be your unbiased poll didn't give you the answer you wanted?

Go on with the bluster. Go on laughing. What it tells me is that you've got nothing.
26
@23

Most restaurant tipping these days is on the books-- customers pay with a credit or debit card, and add the tip. The restaurant pays that tip back out to the worker, but they report that payout, and deduct taxes on it. I think you'd be pretty hard pressed these days to find even a dive bartender pulling down enough unreported cash tips to constitute a meaningful tax break.
27
"most"?? meaning what, 30% is off the books and 70% is on the books? okay, why is 30% off the books then?
why is any tipping allowed? and if you're right, which I simply do not know, the restaurant pays it out to the worker, deducting taxes, counting it for labor and industries, unemployment insurance, FICA, SSN, and medicare, that's great news. and counting it as revenue thus part of the employer income for its own tax return, also great news!
but then it is already on the books and already certainly counted as a labor so then it's already wages and you don't need a special tip credit.
right?
28
@27

It's a peculiarity of west coast laws (WA, OR, CA, AK, and, uh, MT, NV, MN), that no tip income counts toward the state minimum wage. The laws were constructed that way to prevent wage theft, back in the days when it was very hard for an employee to prove that customers hadn't left a given amount of cash on the table. This form of theft, where employers over-report tip income to avoid paying employees, is still a problem in states with tip-credit minimum wage laws (though it's been mitigated by the decline in cash).

Failure to report cash tip income to the IRS is a crime. The fact that it's easy to do and commonplace doesn't make it legal to keep cash tips "off the books," as you put it.

Oh, and credit card tips, while they may count as employer revenue, do not count as employer income. There's no impact on the employer's tax return from this.
29
@20, you have half the story. 15% cost increase for restaurants if all else is equal. but a significant raise for thousands of seattle workers will create more demand. restaurants could very likely make up the difference by increasing sales rather than prices. i know my family would eat out more if we got a raise...
30
@28 thanks for the info, but I didn't say off the books was legal. It's not. Distraction! it now appears you agree with me in that it's not counted as employer income or revenue thus -- the funds funded by b and o tax are underpaid by this sector. meaning, we make it up. if some of it is cash, even if just five percent and or isn 't counted for social security, medicare, etc., unemployment premiums, labor and industries, calculating child support WHATEVER then someone is losing somewhere. So the reason we'd need a tip credit is then this sector wants to chear the rest of us out of something, by underpaying some fund somewhere?
Why should we cry for restaurants if they are relying on underpaying something normal business pays?

Why? they're so socially valuable, like a church, or a hospital?
31
I lived on $11/hour (adjusting for inflation) from ages 22-26.
32
@ 25 you are not listening. I told you Tom Douglas opened his financial statements. Others on this thread have described there business statements. You just keep spouting the same rhetoric. So you don't believe them even as they "open their books". Google restaurant profits and success rates. Do they all lie? You obviously are not in the business of creating jobs and employing people. You would rather complain and only ask others to give to you. Research and be smart before you complain about your life..
33
@30

If you didn't see the distinction between tips and cash tips that I was making, you're not trying very hard to understand what I'm saying.

Credit-card tips, which are the majority of restaurant tips these days, are reported by the employer, and tax is collected by the employer on those tips.

Most employees also report their cash tips; the tax on them is tiny, and not worth the risk of investigation some day-- thanks to modern POS systems, there are now detailed records of how much each employee rings up in sales, from which average cash tips can be readily estimated, if anyone doing an audit were so inclined.
34
@32

Do you have a link to the financial report Tom Douglas provided? I'd like to check it against the estimates I've been using from average budget numbers for the industry.

If you know of any local restauranteurs that have actually opened their books, and not just provided summary reports without underlying data, I'd of course be interested in that as well.
35
@31

Yes, most people used to earn around that much at that age; I sure did. If you were living in Seattle at the time and you're over ~45 now, then you also enjoyed a noticeably lower relative cost of living at the time.

I don't think most people 22-26 would mind spending a few years living 3 to a 2-bed apartment on $11 an hour, just like the good old days, but the poverty-level-wage jobs are now filled by older people, and unemployment for those in their early 20s is still ~12%.

Maybe the kids these days are just a buncha lazy, entitled goodfernothin's, eh?
36
@33: amigo:
1. significant amounts of tips are not reported. the cash ones. you say this isn't most and resolutely never say how much it is. sure, each transaction is tiny, but many small things add up. you got no aggregate numbers. Telling.
2. you admitted the reported tips on the credit card slips are NOT revenue to the biz, so you admit taxes aren't being collected on that. b and o tax. it adds up. in my business the city b and o alone is like 2% of all revenues. it's a lot in the aggregate.
3. " Most" servers report. Sez you. The ones I knew and represented said it was like half. Only half. they, too know that to the IRS it is "not worth the risk of investigation some day" despite POS data.

in the end the solution is fairly EZ -- put it in the menu price so it's all treated on all the books, then you don't NEED a tip credit. that the food and booze bixness fights for the tip credit soooo much, instead of readily agreeing to end tipping totally, tells me they got a financial reason and that reason means they're getting something the rest of us don't get by way of tax avoidance. otherwise, no reason to not include tips as normal wages and cost of goods sold and revenue -- right? I mean why not do that? You're kind of waffling since you claim it's not a lot. Well it's enough for the industry to fight attempts to normalize this as a normal wage, isn't it? must be some payoff for that.
37
@36

Yeah, I suspected you weren't arguing in good faith. Now I know it.

Reminder to anyone else following along: revenue is neither "income" nor profit.
38
@12
Phasing in is a step in the right direction I guess, but only as much as a phasing in ending the first amendment is...why did I type that? I'll give Sawant and her cult more ideas.

The government shouldn't set the price on ANYTHING, including labor. I would be happiest with no minimum wage laws and allowing private unions to negotiate wages with private businesses and no government involvement.

And I'll probably end up moving to Texas in a year or two, so fuck you. Sawant is welcome to try to stop me, at which point we can have conversation about the Second Amendment.

Try to bring 15/hour to Texas and see how that flies...
39
no tipping anywhere anytime.

now, figure out how much your business makes and how much you pay your employees.

adjust menu prices accordingly and we're done.

also fuck tim keck and the waffly stranger editors who once supported 15now & sawant, then dismissed 15now & sawant, now might support 15now & sawant and so on. . . viva Goldy!
40
I think the real news here is that a socialist was willing to compromise. Most of her far left supporters don't know the meaning of that word.
41
"I lived on $11/hour (adjusting for inflation) from ages 22-26."

Impossible, that's not a living wage. You should be dead.
42
@38 why wait a year or two? I suspect most of Seattle would be more than happy to show you the door today. Please encourage the rest of your Ron Paul cultists to join you there so we can seal off the border and then you guys can have fun as you're eventually annexed by Mexico.
43
237-- robotslavemind -- aha, now that I reveal your insidious motive attacks on faith come out. Fine. Let's rehash here.
1. You admit some part of tips are not reported for any purposes. You claim it's tiny and provide no data. I, not liking any degree of free riding, or harm to state funds of divers kinds, oppose tipping since some isn't reported at all and I don't care if it's just 1% or 40% or the 50% my server friend told me. When asked for data you provide none. Tell me this, we all need to support education, roads and such, why does this sector get any subsidy this way? No attempt at answering.
2. You admit when it's on the credit slip and reported -- thus part of employee's social security and what not, good -- it's still not revenue to the employer. thus it's not subject to the b and o tax. thus it's revenue really but not taxed like all other businesses are taxed. again why this subsidy? no answer given. I know it's not income as even if counted as revenue there's offsetting cost, but still -- it's not counted as revenue.
3. you admit it's "not worth the risk of investigation some day" which proves my point -- folks have no incentive really to report cash tips.
4. then to simplify I ask you "so if this sector isn't getting something, why not agree to just count it as revenue and pay all taxes and impositions on it? doesn't the fact you all defend tipping indicate a financial motive here?" and you got no answer.
QED you want "credit" for all tip revenue, call it revenue, pay b and o on it, stop seeking indirect subsidies from other sectors, and you can have your credit. your real motive is to keep some income to the employee untaxed at all, and some revenue to the bizness untaxed. why else are you arguing?
44
hysterical Seattle times editorial today claiming sawant has no exceptions and no phase in. They are accusing her of stomping feet. It's a good old Seattle style "nice" form of semi passive aggressive pleas for consensus masking ;underlying red baiting and outright lying. they knew she was unveiling her proposal Saturday but wrote an editorial condemning it that was printed Friday before hearing it!

45
@robotslave: the poverty-level-wage jobs are now filled by older people

That's certainly the party line. Based on what I see in my neighborhood, however, many of them are 20-somethings. The city council is actually doing a study on who is working for minimum wage in this city, so I hope you don't mind if I ignore the sloganeering and wait for some actual data on the subject.

Also, just to put things in perspective, $11/hour full time is about $22,000 per year, which is roughly twice the $11,490 poverty threshold for a single person, and still above $19,530 poverty threshold for a household of 3 people.

Certainly, no one is living high off the hog at $11/hour, and anyone who is actually stuck trying to raise a family on a single income at that level should be receiving aid - in particular, free healthcare, childcare, job skills training, and treatment for any mental health issue or substance abuse problem that might have landed them in that spot. But unless the city council finds that everyone working for minimum wage is supporting 3 dependents, it wouldn't be accurate to describe $11/hour as a "poverty-level-wage".
46
@32

Yeah, I'd like to see it too. Where are these financial statements? Who has seen them?

I have heard of these elusive statements, true. But where are they?
47
@46 Can we see the expenses of all those claiming $10/hr isn't 'livable' age? How much they spend on the X Box, rims, sound systems and smart phones? How much they don't spend on condoms?
48
“It provides independent businesses who give the city its character a competitive edge over the giant sucking sound of multinational corporations.”

LOL… Like Seattle’s “character” is not influenced (positively) by the likes of Costco, Nordstrom, Boeing, Starbucks, Amazon and Microsoft. Without them, this place would look a lot like Spokane or Tacoma.
49
@45: "Certainly, no one is living high off the hog at $11/hour, and anyone who is actually stuck trying to raise a family on a single income at that level should be receiving aid - in particular, free healthcare, childcare, job skills training, and treatment for any mental health issue or substance abuse problem that might have landed them in that spot."

Why exactly should society support capitalist businesses by allowing them to pay a wage that requires welfare, free healthcare..etc? The benefits of requiring employers to pay a living wage - less social spending required, lower crime, better neighborhoods..etc..etc are so high that they far outweigh any costs to the consumer (and businesses) that might be had from the increase in wage.
50
@47

That shit right there is why we will win an initiative vote and we don't need to give any concessions. You guys have nothing but stale rhetoric warmed over from Ronald Reagan's day.
51
too much, too fast. It took at least 30 years (arguably longer) to generate the massive imbalance between wages, cost of living, and productivity. We can't undo 30 years of damage in 4 years. Peg today's $15 to inflation+ (something better than CPI, which is too inaccurate). Meet that number by 2022. 7 year phase in, with jump to $11 in 2015. Annual increases to meet the $15/hr number (with inflation adjustments) and semi-annual adjustments chained to CPI+ from there forward.
52
I am a little uneasy about a small business phase in, but because of the time limits, there is a limit to how much harm companies can do gaming the system. At best they can delay the inevitable for a couple of years.

It's better to eventually make real progress, than be too pure and fail. Without a phase in, I could see how a high dollar PR campaign could erode the overwhelming public support by concern trolling it to death. I see real problems with a permanent two tiered minimum wage. A little disappointing in the short term, but smart strategy to win in the long term. So far 15 has made all the right moves, so it still looks like they got it.
53
@38

"And I'll probably end up moving to Texas in a year or two, so fuck you. Sawant is welcome to try to stop me, at which point we can have conversation about the Second Amendment."

Oh look, a narcissistic libertarian with delusions of grandeur.
54
@50

maybe if you actually worked harder and smarter, rather than posting shit on the internet all day, you could get a raise to $15 all on your own hotshot.
55
@ 45, where is your neighborhood? Is it a hip neighborhood, or a place like Bitter Lake?
56
@21, only tight wads tip a meager 15% now.
57
@54

And this shit helps you how? Is this part of your campaign to keep the minimum wage from going up? You're going to lose because you have nothing to say. No facts, and no arguments.

Expressing how angry you are isn't going to win you any votes.