Seattle’s Jobless Rate Drops Below Four Percent in September

October 19, 2016 Paul Constant

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Mike Rosenberg at the Seattle Times writes : For the first time in more than eight years, the Seattle-area unemployment rate has dipped below 4 percent, a milestone in the region’s continued economic resurgence, according to new figures released Wednesday. September’s 3.9 percent unemployment rate for the Seattle-Bellevue-Everett area is down from 4.1 percent a month prior, and 4.6 percent a year ago. It is vitally important to note that we didn’t raise the minimum wage in Seattle so we could drive unemployment numbers down to nothing. Unemployment rises and falls in a dynamic economy, and Seattle’s unemployment rate will undoubtedly rise with the next recession. We raised the minimum wage because Seattle believes in inclusivity. The minimum wage was way too low, which was removing people from the economy. When everyone prospers, we all prosper more and the economy is strengthened in a positive feedback loop. But this latest dip in unemployment is important because it refutes, yet again, the position that if we were to raise the minimum wage, restaurants would close in Seattle and automation would take all our jobs away and nobody would ever open a new business here. The sky has not fallen. (And now that some time has passed, people who were on the wrong side of the minimum wage fight will try to move the goalposts, claiming that nobody threatened those sorts of things. We can’t allow them to do that. They most certainly did claim they’d never open new restaurants. Some argued that we’d lose a quarter of all restaurants downtown if the wage went up.) We do not live in a restaurant-free hellhole. We are not scavenging for scraps in the empty husk of the downtown McDonald’s. The city is doing just fine, thanks. At some point, you have to apply Occam’s Razor to those threats and consider the source: maybe the restaurant owners who threaten apocalypse with every minimum wage hike are simply
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Governor of Maine Claims an Increased Minimum Wage Will Kill Senior Citizens, Somehow

October 17, 2016 Paul Constant

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Minimum Wage, Paul LePage

And here I thought we’d heard it all before. Every time a community considers raising the minimum wage, business owners and conservative politicians love to toss out threats. They’ll never open new restaurants again . They’ll have to close their existing restaurants . No new businesses will want to move in . When the minimum wage is adopted, of course, those threats prove to be empty. Businesses keep opening and existing businesses keep hiring. As Civic Ventures co-founder Nick Hanauer notes , a National Employment Law Project study found that when you measure all of “the nearly two dozen federal minimum wage hikes since 1938, total year-over-year employment actually increased 68 percent of the time.” The few times when employment stayed flat or decreased? They generally unfolded during recessions, when employment always decreases or stays flat. The American people have finally figured out that these threats are baseless. Minimum wage increases are polling incredibly well around the country, because people understand that raising the minimum wage doesn’t kill business — in fact, when more people make more money, businesses have more customers. So I’ve figured for a while that conservative minimum-wage opponents were going to try to figure out a new tack; after all, they need to figure out a way that will allow their base—the top one percent—to keep their money. I just didn’t figure that new tack would be quite this crazy : [Maine] Gov. Paul LePage affirmed his statement Friday that two advocates of a state ballot question to increase the minimum wage should be jailed, saying they are guilty of the “attempted murder” of senior citizens because of the alleged impact of a wage increase. So raising the minimum wage is killing people now? LePage’s rationale is that an increased minimum wage is “attempted murder in my mind because it is pushing people to the brink of survival.” He says it will increase costs, which means senior citizens on a fixed income won’t be able to afford goods
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Before the New Overtime Rule Kicks In, Walmart Gives Managers a Raise

October 12, 2016 Paul Constant

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Minimum Wage, Overtime, Walmart

Daniel Wiessner and Nandita Bose report for Reuters : Wal-Mart Stores Inc has raised salaries for entry-level managers before a rule change that extends mandatory overtime pay to more than 4 million U.S. workers, in an attempt to shield itself from unpredictable additional costs for salaried employees. The raise was pretty significant—$45,000 per year to $48,500. And as Wiessner and Bose note, this decision wasn’t made out of the kindness of Walmart’s heart. (For those of you who flunked out of anatomy in college, here’s a tip: Walmart doesn’t have a heart because it’s not a living organism.) Walmart was simply ensuring that their managers were paid above the $47,500 threshold adopted by President Obama’s Department of Labor. That $3,500 raise might sound like a lot, but it’s probably peanuts compared to the overtime Walmart would have to pay its workers under the revised overtime threshold. And that’s exactly how the overtime rule is supposed to work. The old threshold—an embarrassing $23,660 per year—was so pitifully low that a whole generation of Americans grew up thinking that overtime only existed for unionized employees and government workers. We need an overtime rule that ensures low-wage employers (and yes, even though Walmart pays more than the minimum wage now, I’d still count them as a low-wage employers) pay a living wage to their employees. Note, too, that once Walmart raises their employees wages above the threshold, they can expect those employees to work over 40 hours a week without additional pay. That’s how it’s supposed to happen. The government isn’t taking away an employers’ ability to expect more work out of their employers, it’s simply asking employers to pay their employees fairly for the time they work. But before we go crazy high-fiving Walmart for the good things they’ve done for their employees (fact check: Walmart is
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Anti-Minimum Wage Blogger Accidentally Makes the Case for Economic Inclusion

October 11, 2016 Paul Constant

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Minimum Wage, Tim Worstall, Worstall

This morning, Tim Worstall wrote a post about Civic Ventures founder Nick Hanauer. It’s not much of a post, really: Worstall just attacks Hanauer’s most recent article for PBS Newshour by block-quoting it and then block-quoting a column Worstall himself wrote back in May. (As we all know, there’s nothing in all of blogdom that’s more thrilling than a battle of the block quotes.) Anyway, to summarize Worstall’s many paragraphs of quoted text: he’s arguing that a National Employment Law Project (NELP) study Hanauer quoted in his article only looks at the total number of Americans employed, not at the granular levels of unemployment among smaller portions of the population. If you’ll permit me a single block quote from Worstall’s post, I think this gets to the crux of his argument: A place that more than doubles its population is going to have more jobs at the end of the process than at the beginning. This proves absolutely nothing at all about the minimum wage. Hmmmmm. Okay. I’d argue that what the NELP article does most effectively is it disproves the claims that the apocalypse will unfold if the minimum wage is raised—the restaurant owners who say they’ll never open another restaurant in their “beloved Seattle” if the minimum wage goes up, say, or the newspaper editorial boards that promise nobody will ever open another hotel near an airport if a higher minimum wage is adopted there. Never—not once since the adoption of the federal minimum wage—has that kind of apocalyptic scenario happened in America. The NELP report is a call for reasonable discourse when it comes to the minimum wage—a plea for business owners to stop threatening their employees with rampant layoffs if the wage goes up, and a demand that newspaper editorial boards address the topic with a more level head. The minimum wage does not cause an outsize drop in employment numbers. Doesn’t happen. The polling successes of wage increases indicates that the American people agree: we need a more rational discussion
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As Minneapolis Considers Raising the Minimum Wage to $15, the Same Tired Opposition Kicks In

October 6, 2016 Paul Constant

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Minimum Wage

Eric 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
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Yes, Tonight’s VP Debate Matters. Let Me Tell You Why

October 4, 2016 Paul Constant

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2016

I listen to a lot of political podcasts, and almost all of the major ones have made variations on the same joke in the past few days: when discussing the vice presidential debate, the hosts will crack wise about falling asleep because both Democratic VP candidate Tim Kaine and Republican VP candidate Mike Pence are so deadly dull. And then they’ll participate in a conversation about whether or not the vice presidential debates will “matter,” because vice presidential debates have traditionally never affected the polls. This is bad, dumb thinking, on several levels. First of all: of course a vice presidential debate matters. These candidates are second in line for the most powerful job in the world. And Dick Cheney has proven that vice presidents can demonstrate an outsize effect on foreign and domestic policy even if the president stays in good health for all eight years of a presidency. Plus, vice presidential candidates traditionally take on the role of attack dogs, articulating the policies and arguments of the presidential candidates in rawer, more honest language. If you want to hear a less-polished discussion of what really matters to America, the vice presidential debate has traditionally been the event to watch. Of course, we are living in a very different year for presidential politics, one where the rules don’t seem to apply. And that’s true for this vice presidential debate, too. While it’s true that the presidential candidates—both of whom are plagued by bad favorability numbers and scandals—chose their VP candidates at least in part because they were relatively boring and straightforward politicians, tonight’s debate is potentially going to be even more important than a usual vice presidential debate. For one thing, at the top of the ticket we have the two oldest presidential candidates in history, which makes the vice
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Seattle Shouldn’t Be in the Wells Fargo Business

September 30, 2016 Paul Constant

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News, Overtime

Jonathan Tasini at CNN does the impossible: he succinctly sums up the recent controversy over Wells Fargo’s specious business practices in a single sentence: Wells Fargo engineered a widespread scam on its customers, opening up as many as 1.5 million bank accounts and hundreds of thousands of credit card accounts that their customers never authorized, partly to inflate the perceived value of the company. Of course, once you stare at the scam a little more closely, you pick up all sorts of terrible little details. Just today we’ve learned that Wells Fargo has repossessed hundreds of cars owned by US service members, for instance. I bet we haven’t learned the last of the bank’s various acts of malfeasance. In response to this news, Wells Fargo fired over five thousand ground-level employees. But the bank’s executives are still cashing in: the company’s head of community banking, Carrie Tolstedt, might be walking away from Wells Fargo with 77 million dollars . And as a thank you for overseeing all this, Wells Fargo CEO John Stumpf—yes, his real name—could receive a $134.1 million payout . This is, frankly, disgusting. It’s parasitic behavior. Normal Americans have suffered thanks to the bank’s callous exploitation of trust, and middle-class employees of the bank are the only ones who have been penalized to date. If every bank in America followed Wells Fargo’s nihilistic business model, the economy would collapse. Barring a few trolls and high-paid banking executives, nobody in America thinks Wells Fargo should get away with this kind of scheme. So why, then, are we rewarding Wells Fargo’s behavior? Why would you keep an account at Wells Fargo, knowing that not only does the company screw over its workers in pursuit of a ballooning profit for a few high-level executives, but that they actively scammed their customers? I understand that inertia is a hell of a drug, and that it’s easier to believe your account is safe from these practices now that
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The Free Market Knows How to Save Lives from Distracted Drivers. It Just Chooses Not to Act.

September 29, 2016 Paul Constant

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Economics, Policy

I want to make sure you didn’t miss Matt Richtel’s stunning New York Times story in the media juggernaut’s run-up to the debate. It’s about texting and distracted driving, and the first paragraph is horrifying: The court filings paint a grisly picture: As Ashley Kubiak sped down a Texas highway in her Dodge Ram truck, she checked her iPhone for messages. Distracted, she crashed into a sport utility vehicle, killing its driver and a passenger and leaving a child paralyzed. Richtel continues, “With driving fatalities rising at levels not seen in 50 years, the growing incidence of distracted driving is getting part of the blame.” In his report, AT&T admits that texting while driving “has addictive qualities, meaning drivers cannot help themselves.” As any pedestrian commuter in a major American city can tell you, the driving-while-distracted epidemic is out of hand. Spend more than five minutes a day on city sidewalks and you’ll soon have a story about nearly being killed in a crosswalk by a driver who was senselessly taking a corner while staring at his iPhone. This is a problem that is not going away, and the free market will not solve it. In fact, the free market has already devised a solution. Richtel explains that Apple has already patented software which would identify when a phone user is driving and disable text messaging and other apps that ping drivers, who often can’t bring themselves to resist an alert sound. They’ve had this software for years. But they haven’t released it to the public. Why? Well, as road safety consultant David Teater says: “If you’re at Apple or you’re at Samsung, do you want to be the first to block texting and driving?” he said. “A customer might say, ‘If Apple does it, then my next phone is a Samsung.’” This is the free market at work. But
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Why An “Objective” Economist Attacked Me On Twitter

September 22, 2016 Paul Constant

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Economics, Minimum Wage

Yesterday, Daniel Beekman at the Seattle Times reported that city councilmember Kshama Sawant sent a sternly worded letter taking issue with aspects of a recent University of Washington study of Seattle’s minimum wage. Sawant had two main areas of contention: first, she questioned some of the methodology of the study, including its approach of frankensteining together a hypothetical “Synthetic Seattle” where the minimum wage didn’t go up. In the real world, Seattle saw lots of good news—higher pay, more jobs, more hours worked—but this imaginary “Synthetic Seattle,” which was compiled together out of lower-wage parts of Washington State, did even better. But Councilmember Sawant also had a problem with the “anti-minimum wage editorializing” by UW Professor Jacob Vigdor. In a letter signed by all the UW researchers, Vigdor and the other professors responded: With regards to Dr. Vigdor’s public commentary, we are very aware that the value of this study rests entirely on the perception that it is an objective, nonpartisan effort. We are also aware, however, that our work product is a public document, subject to partisan interpretation. As you know, selected findings from this study have been used to promote both a positive view of the minimum wage (as in the Bernstein piece) and a negative view (as in the Monson piece). Dr. Vigdor and other team members have conducted interviews across the media and political spectrum, with full knowledge that anything said can be edited or taken out of context. This is a risk that we can only avoid by refusing contact with the media. As the most misleading representations of the report have been authored by individuals who did not contact any member of our study team, we do not feel that a withdrawal from public commentary on our own work would enhance public understanding. Hmmm. Who could they be talking about
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The Seattle Times Editorial Board Gets Everything Wrong on Secure Scheduling

September 16, 2016 Paul Constant

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Economics, Policy, Scheduling

On Monday at 2 pm, the City Council will finally vote on secure scheduling . A majority of the council has already voted the bill out of committee, so the legislation is expected to become law. This is great news for workers in Seattle, who will finally enjoy predictable scheduling, allowing them to balance their work and personal lives. It will enable them to plan doctor’s appointments, family time, school schedules, and all the other everyday activities that so many Seattle office workers take for granted. Secure scheduling makes sense from a business perspective, too: this law will allow these workers to reinvest themselves in their communities as consumers who can plan their finances more than five days in advance. We’ve already agreed in Seattle that when restaurant workers have more money, that’s good for restaurants. Secure scheduling is a continuation of that idea; it ensures that restaurant workers have the time (and the sense of financial stability) to spend their money in restaurants. It’s just good sense. So, naturally, the Seattle Times Editorial Board fucking hates it. They published an editorial this morning titled “Seattle’s scheduling rule is counter to our innovative business culture,” and it’s so packed with bullshit that I have no recourse but to fisk the thing—go through line by line to unspool all the lies and misdirections stuffed inside. Ready? Here we go, from the very beginning: Mayor Ed Murray and the Seattle City Council are moving at breakneck speed, for them, on new legislation this month. This push for legislation started back in February , so it’s not exactly the 2 Fast 2 Furious frenetic road race that the Times is disingenuously depicting here. There have been plenty of committee meetings where citizens on both sides of the issue have spoken out, there have been community events, there have been many opportunities for everyone to comment. Not to
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Civic Ventures

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