Seattle sees fallout from $15 minimum wage, as other cities follow suit

[didymus]

Fox News:

Seattle sees fallout from $15 minimum wage, as other cities follow suit

Seattle’s $15 minimum wage law is supposed to lift workers out of poverty and move them off public assistance. But there may be a hitch in the plan. Evidence is surfacing that some workers are asking their bosses for fewer hours as their wages rise – in a bid to keep overall income down so they don’t lose public subsidies for things like food, child care and rent.
Full Life Care, a home nursing nonprofit, told KIRO-TV in Seattle that several workers want to work less.

“If they cut down their hours to stay on those subsidies because the $15 per hour minimum wage didn’t actually help get them out of poverty, all you’ve done is put a burden on the business and given false hope to a lot of people,” said Jason Rantz, host of the Jason Rantz show on 97.3 KIRO-FM.
The twist is just one apparent side effect of the controversial – yet trendsetting – minimum wage law in Seattle, which is being copied in several other cities despite concerns over prices rising and businesses struggling to keep up.

The notion that employees are intentionally working less to preserve their welfare has been a hot topic on talk radio. While the claims are difficult to track, state stats indeed suggest few are moving off welfare programs under the new wage.
Despite a booming economy throughout western Washington, the state’s welfare caseload has dropped very little since the higher wage phase began in Seattle in April. In March 130,851 people were enrolled in the Basic Food program. In April, the caseload dropped to 130,376.

At the same time, prices appear to be going up on just about everything.
Some restaurants have tacked on a 15 percent surcharge to cover the higher wages. And some managers are no longer encouraging customers to tip, leading to a redistribution of income. Workers in the back of the kitchen, such as dishwashers and cooks, are getting paid more, but servers who rely on tips are seeing a pay cut.

 

[Elizium23]

Schadenfreude face.

 

[powerofk]

See, here’s the thing - I know, from personal experience, how hard it is for people who are just above the threshold for assistance.

 

[Darryl1958]

The journalist need to stop asking if it is happening, and instead focus on if it is a rational thing for people to do.

If it is rational, then people as a general rule know how to preserve the bottom line when it comes to their own lives. That is the power of the market

.

 

[powerofk]

The journalist need to stop asking if it is happening, and instead focus on if it is a rational thing for people to do.

If it is rational, then people as a general rule know how to preserve the bottom line when it comes to their own lives. That is the power of the market

.

Oddly enough, for some, it is. If one was not receiving benefits (for a single person or married couple without children at home, full-time at minimum wage pays more money than the cut-off for benefits), then he/she probably would not want hours cut. More money is more money, and it could be his/her ticket for independence. However, for larger families, $15/hour full time could be just above the cut-off for receiving benefits. In this case, it is more profitable to receive benefits than to get the extra money (due to the benefit cliff). It’s similar to a person refusing a slight raise because it would put him/her into a higher tax bracket - and thus netting less money (even though he/she is grossing more).

 

[Thomas_White]

The journalist need to stop asking if it is happening, and instead focus on if it is a rational thing for people to do.

If it is rational, then people as a general rule know how to preserve the bottom line when it comes to their own lives. That is the power of the market.

The power of the market wouldn’t even provide minimum wage. It must be mandated by law. Beyond that, the notion that markets are rational resulted in the financial and economic disaster of 2008, a thing even Greenspan acknowledged.

 

[Theo520]

The power of the market wouldn’t even provide minimum wage. It must be mandated by law. Beyond that, the notion that markets are rational resulted in the financial and economic disaster of 2008, a thing even Greenspan acknowledged.

The power of the market exceeds minimum wage for most jobs.

 

[stinkcat_14]

The power of the market exceeds minimum wage for most jobs.

We don’t seem to believe that for jobs in law and medicine where we seem quite content to use government policy to artificially increase wages.

 

[Darryl1958]

The power of the market wouldn’t even provide minimum wage. It must be mandated by law. Beyond that, the notion that markets are rational resulted in the financial and economic disaster of 2008, a thing even Greenspan acknowledged.

What I am saying is that if there is a buck to be made for people to ask for lower hours, then that is a rational decision for them to do just that. They are the market in that instance.

In this case, the experts deem that a higher minimum wage is better for them. But those who make the decisions for their own lives can only benefit from that higher minimum wage if they work less hours. So if that is the case, the market- that is the people making the economic decision to work shorter hours- are making the rational choice, and the experts who raised the minimum wage have miscalculated and their policy is having the opposite effect intended.

 

[Inquiringperson]

What I am saying is that if there is a buck to be made for people to ask for lower hours, then that is a rational decision for them to do just that. They are the market in that instance.

In this case, the experts deem that a higher minimum wage is better for them. But those who make the decisions for their own lives can only benefit from that higher minimum wage if they work less hours. So if that is the case, the market- that is the people making the economic decision to work shorter hours- are making the rational choice, and** the experts who raised the minimum wage have miscalculated and their policy is having the opposite effect intended.**

So if Bernie Sanders does come through as president with his 15 dollar minimum wage plan…, would we be seeing this fallout on the national level?

 

[exnihilo]

The power of the market wouldn’t even provide minimum wage. It must be mandated by law. Beyond that, the notion that markets are rational resulted in the financial and economic disaster of 2008, a thing even Greenspan acknowledged.

If minimum wages are good why stop at $15? Why not make it $30? Why not $100? Of course it is obvious that you can’t just mandate everyone be paid $100 an hour. That is just as much true for $15.

The markets that collapsed in 2008 were not free markets. They were highly regulated i.e. government controlled. No one claims that free markets don’t have ups and downs and even collapses. What is claimed is that markets allocate resources most efficiently. The only ones claiming they can prevent a collapse are statists. And time and time again they are proven to be wrong.

 

[Darryl1958]

So if Bernie Sanders does come through as president with his 15 dollar minimum wage plan…, would we be seeing this fallout on the national level?

If the benefits that the state give rise above what people can make at 15 dollars, then people will likely go for the higher ‘wage’, which would be State benefits.

I suppose if the there is some kind of graduated scale of benefits tapering off for the working poor as the earn more money, rather than disappearing completely, then there would be profit in working. But that would work at any minimum wage.

It would be very difficult for a federal government to control such things in a system where states differ significantly in the kinds of programs and economic opportunities that they have to offer. I am not sure why this would be mandated at a federal level, except for its populist appeal.

 

[Ridgerunner]

One irony of this is that it seems government is subsidizing low wages. Do people accept lower wage levels because they get benefits if they don’t do better in earning?

So, perhaps raising the minimum wage was thought to shift the cost back to the employer. But if people work shorter hours in order to continue getting benefits, it didn’t work.

One wonders whether perhaps the core of the problem is not employer greed or market forces, but government interventions that encourage low wages, both on the part of employers and workers. If so, the system is truly perverse.

 

[exnihilo]

One wonders whether perhaps the core of the problem is not employer greed or market forces, but government interventions that encourage low wages, both on the part of employers and workers. If so, the system is truly perverse.

Or high prices. Government subsidizes many products which necessarily results in higher prices. Those who support market interference seem to be perpetually shocked that even after their actions people still are free agents who respond to the new conditions rationally.

 

[mikekle]

This should have been expected, of course these people receiving Govt money are going to resist loosing that ‘free money’, it takes a little while for them to realize if they can earn enough on their own, they wont need that free money anymore, but that a tough thing, after receiving free money for a certain time, they get pretty lazy, after all they are getting money for NOT working, have to allow time for their mindsets to change, eventually they will recognize this.

Regarding the rise in prices on certain things, Id be fine with that if it meant people were making enough to live on, and I MOST certainly would still tip when going out to eat, thats absurd to instruct people to NOT tip, If I were a patron, I would lodge a complaint with the main corporate office if a manager told me this.

 

[stinkcat_14]

Or high prices. Government subsidizes many products which necessarily results in higher prices. Those who support market interference seem to be perpetually shocked that even after their actions people still are free agents who respond to the new conditions rationally.

If we really wanted to help poor people we would get rid of most government regulation. Poor people can’t afford housing because of zoning regulations, they can’t afford healthcare because of occupational licensing regulations, they often have a hard time starting some types of businesses because of regulations.

 

[Peebo]

First off I would be wary if it comes out of Fox News…that’s like believing MSNBC…they both have their own biased political right wing/left wing agendas…

 

[Elizium23]

This should have been expected, of course these people receiving Govt money are going to resist loosing that ‘free money’, it takes a little while for them to realize if they can earn enough on their own, they wont need that free money anymore, but that a tough thing, after receiving free money for a certain time, they get pretty lazy, after all they are getting money for NOT working, have to allow time for their mindsets to change, eventually they will recognize this.

Is it really lazy if someone realizes that a few extra dollars means the difference between health care he can afford vs. going out on the market and finding health care that will kill him in premiums and co-pays and deductibles?

 

[St_Francis]

This should have been expected, of course these people receiving Govt money are going to resist loosing that ‘free money’, it takes a little while for them to realize if they can earn enough on their own, they wont need that free money anymore, but that a tough thing, after receiving free money for a certain time, they get pretty lazy, after all they are getting money for NOT working, have to allow time for their mindsets to change, eventually they will recognize this.

The problem is not that they get lazy; the problem is that at certain points, they lose more in government aid than they gain in wages.

If they lose their housing aid as the result of wages which have increased, bit not enough to cover their rent, then the wage hike harms them and their family.

These “cliffs” do act as perverse incentives as Ridgerunner mentioned.

 

[vz71]

If we really wanted to help poor people we would get rid of most government regulation. Poor people can’t afford housing because of zoning regulations, they can’t afford healthcare because of occupational licensing regulations, they often have a hard time starting some types of businesses because of regulations.

I am in agreement here.
I have believed for a long time that most could afford to build their own home if not for the regulations.