Friday, June 6, 2014

Be careful what you wish for...

Following $15 Minimum Wage in SeaTac, Local Businesses are Adding an 8.25% ‘Living Wage Surcharge’

Economic Policy Journal

Erin Shannon, Director of the Center for Small Business writes on The Washington Policy Center blog that “In SeaTac, Everyone Pays for the $15 Minimum Wage“:

Last week I blogged about SeaTac employers who have responded to the new $15 minimum wage law by reducing or eliminating the benefits workers receive. Employees earning the new wage say they have lost benefits such as 401k, paid holidays, paid vacation, free food, free parking and overtime hours. As one SeaTac worker put it, “It sounds good, but it’s not good.”

But workers aren’t the only ones paying for the high wage. Consumers are also picking up the tab, in the form of increased prices. Many SeaTac businesses have tacked on an additional fee to mitigate the increased cost of labor. On the receipt pictured above, a $6.93 “living wage surchage” was added to a $84.00 parking charge. That is the equivalent of a 8.25% tax.

Contrary to what supporters claim, increasing the minimum wage does not create jobs and stimulate the economy. The higher wages are not free money. The increased cost must either be absorbed by the employer, which is impossible for many who already operate on shoe-string profit margins, or it must be passed on to workers, in the form of reduced hours and benefits, and consumers, in the form of higher prices. Either way, someone pays.


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