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Owners Say Many WA Small Businesses Would be Hurt by $15 Minimum Wage

Seattle city government pushing $15 minimum wage
(Photo by Rick Diamond/Getty Images for IEBA)

Recent comments from a number of small business owners reinforce what most Americans realized years ago.

The Washington Policy Center, a conservative think tank who’s been very influential in pro-business policy in our state,  recently spoke with a number of Seattle-area business leaders.

In a recent column, the WPC data confirmed what critics have said about raising the minimum wage to $15 an hour:  it will hurt many small operators.

Dicks Drive-In in a very successful business in Seattle, and the company was recently profiled in Seattle media for the way they treat their workers.  DIck’s has chosen to pay it’s 180 workers at least $10 an hour, merit raises,  employer-paid insurance, and various child-care and college tuition assistance programs.  While this isn’t a model for all small businesses,  owner Dick Spady believes workers are his best resource,  if they are successful and happy, his business will grow.

The key point of this policy, though, is that the owner CHOOSES to do so.  He is not being FORCED by government to pay higher wages, or better benefits.   Not every small business can afford to adopt such policies.

However, his son, Jim, who is VP of the company also told the Seattle Times:

 forcing businesses to pay a high minimum wage, such as the proposed $15 per hour, will hurt small businesses, especially new ones. These businesses rely on less experienced or low-skill workers and do not have the profit margin to withstand a massive forced wage increase.

…what these high minimum wage laws do is they help a few people get better wages, but a lot of current people will lose their jobs.”

Several other business leaders echoed Spady’s thoughts. Paying $15 an hour might make people feel good, but it could force many out of business, reduce hours for current employees, and cut new jobs.

Spady echoed what Newstalk870 reported recently covering the minimum wage issue.   Most of the businesses targeted for the minimum wage increase are not designed as permanent jobs:

many minimum or low-wage companies, like Dick’s, are “transitional employers,” where the vast majority of workers start with no experience, develop valuable work skills and end up moving on to somewhere else. “The way to improve the wages of the poorest people is to encourage them to upgrade their skills, not to pass a law that requires we pay X dollars an hour… So if you force law abiding businesses to pay more, they will — or they will automate their processes so they use way less labor…

You have to wonder why groups pushing for the minimum wage don’t need the decades-old economic facts that if it’s raised to an unreasonably high level, the long term effect will be detrimental?

 

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