As Minneapolis Considers Raising the Minimum Wage to $15, the Same Tired Opposition Kicks In

logo210Eric Roper at the Minneapolis Star-Tribune says a new study commissioned by the Minneapolis City Council found that raising the minimum wage to $15 “would boost pay for many workers without much impact on businesses.” Roper continues:

The study revealed to City Council members Wednesday spanned more than 200 pages and noted that about 71,000 workers in Minneapolis would benefit from a $15 an hour minimum wage. About half those beneficiaries would be nonwhite (including Hispanics), and just under half are also residents of the city.

Of course, some people immediately questioned the study:

“I was really hoping we could to get a study back that kind of shows us what the cost-benefit was, how it would affect businesses,” [Minneapolis Councilmember Lisa] Goodman said. “But when I see a report that basically says, ‘There’s no negative to businesses at all,’ it’s hard for me to consider the report completely unbiased.”

I want to address that point about bias at the end of Councilmember Goodman’s quote. As I’ve said, everyone is biased. I am naturally biased toward the minimum wage, because I believe that when more people have more money, everybody does better. Others are biased against the minimum wage. This is how it works. Not one report ever produced in the history of the world has ever been absolutely free from human bias. Generally, I find when someone considers a study or news report to be “unbiased,” they mean that it aligns with their perspective and worldview.

So if everyone is biased, what can we do? Well, what matters are results. And the fact is, Seattle’s minimum wage study has found that since we raised the minimum wage in Seattle employment is up, workers are working more hours, and more businesses opened in Seattle. Those restaurant owners who predicted gloom and doom were wrong, and if there is a significant negative to Seattle-area businesses, I haven’t heard about it yet. So based on Seattle’s results, I don’t find the Minneapolis report to be too much of a stretch at all. Why would their results be any different than ours?

Naturally, business leaders immediately complained about the report—including Matt Perry, head of the Southwest Business Association, who told the Star Tribune that “When I read this report and it says there will be minimal or no cost to the business, that just doesn’t jibe with what we’re hearing back from business owners.” Which, okay.

But the business owners aren’t able to predict the future. That’s not their job. They’re most likely putting the increased wages up against their current expenses and sales, which isn’t the right way to go about it. Minimum wages have phase-in periods to allow businesses to adjust, and when minimum-wage employees are paid more, they spend more in the local economy. The business owners don’t account for these changes because they can’t. That’s why we commission studies from experts who can analyze the data and make predictions based on that analysis. (But isn’t this a circular argument? you ask. After all, you just said that every study is biased. And yes, that’s true. This is why you want to hire the best, smartest people possible and take their inherent human bias into account when they get back to you. Simply hiring a human being to do the work of investigating the numbers for you doesn’t absolve you of all responsibility; you have to vet their work.)

So when we get right down to it, the response to this 200-page study is about what you’d expect: people who support the minimum wage think it’s great, people who are on the fence are likely going to take it into account as they make up their minds, and people who are against the minimum-wage increase think the report is biased. The lines have been drawn, and they follow the usual patterns.

The sides of the minimum wage argument are obvious because raising the minimum wage is like any other wage negotiation, but on a much larger scale. Say you’re in your boss’s office for your annual review and you know your business has had a great year, so you’re asking for a raise. Your boss, meanwhile, argues that she thinks business might be down for the year to come. It’s a negotiation; you want the highest outcome, your boss wants to pay the least possible amount.

The minimum wage debate is nothing more than a negotiation tactic for the lowest-paid Americans. Bosses will use intimidation to try to scare workers into arguing against their own interests. Because this report offers good news for workers that might undermine the anti-minimum-wage argument, businesses (and politicians who are in business’s corner) will try to float it as a biased or flawed study.

The comments section of the Star Tribune story is full of people making the argument for business using all kinds of threats and intimidation tactics. Many people argue that residents of Minneapolis will take their business outside the city to deal with the increase in costs that a minimum wage might bring. (Seattle has seen little or no cost increase after raising the minimum wage, and on a more basic level the argument that someone is going to travel thirty minutes to an hour out of their way every time they want to eat a meal is ridiculous.) Someone else argues that “Wait staff will see their tips plummet if $15/hr.” (That hasn’t been the case with Seattle, though a few upscale restaurant owners have experimented with going tip-free and adding service charges.)

This argument is basically the classic “we’ll-cut-jobs” argument dressed up with a few numbers that don’t amount to much:

One of my relatives runs 2 fast food locations here. According to him- his labor costs are 30% of his sales and av. pay is 10$ an hr. A move to 15$ essentially moves the labor percentage from 30% to 45% and he loses money. He has to move his prices +12% to get the labor back to 30%. However, when you raise your prices 12% your going to get fewer customers. His solution is to close one restaurant and enjoy extra sales from the one that remains as some customers from closed restaurant change locations. Thus he has less sales and less profit but the one that remains is now doing higher volume and better margins.

These are the perils of trying to predict the future based on your current numbers that I was talking about earlier. Again, Seattle has not seen a 12 percent increase in costs. This is because when minimum-wage employees get a raise, they tend to spend it, and they spend it in their local community. We’re all doing better because we’re all doing better. Plenty of restaurant owners threatened to close businesses in Seattle if we raised the minimum wage. It hasn’t happened; in fact, many who threatened a restaurant apocalypse have opened even more restaurants since the wage has gone up.

But here’s the comment that really made me mad:

Just where do they think the money for  doubling of the minium wage will come from.   Seattle tried this. The facts are in. After just one year, Seattle is the ONLY city in the state that had jobs lost, hours cut, and benefits cut.   Unemployment went up 1% in the city, while it dropped everywhere else in the state and in the nation.    But lefties never let facts get in the way of their disasterous decisions.

This is just flat out not true. It is, in fact, a lie. Since the wage increased here, Seattle’s wages are up, low-wage employment is up, the number of hours worked are up, and more businesses opened. The University of Washington study backs me up. I can understand when people try to manipulate reality to fit their worldview; that’s human nature. But when you flat-out spread disinformation—and easily disprovable disinformation at that—you’re crossing a line. You’re a liar.

While all this other stuff—the complaining, the distortions, the confirmation bias—is all a normal part of the political process, the fact that liars are trying to manipulate outcomes indicates to me that the opposition is getting desperate. They can’t stand the reality of Seattle’s minimum wage experiment, and so they’re forced to create a false reality that confirms their beliefs. That kind of gaslighting simply won’t stand; Seattle’s successes are too many—and too public—for these weasels to get away with their dirty tricks.

Don’t fall for these lies, Minneapolis. Seattle is proof that you’ll all do better when everyone gets a raise.



Paul Constant

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