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## Seattle Approves \$15 Per Hour Minimum Wage1040

An anonymous reader writes "The Seattle City Council announced on Monday that it has unanimously approved a \$15 per hour minimum wage mandate. The new rate will go into effect starting April 1, 2015 in a tiered, gradual manner that depends on employer size. In the first year of implementation, hourly minimum wage will be raised to either \$10 or \$11 according to the employer size category. By 2021, hourly minimum wage across the board should be at or above \$15. Seattle is the first city to implement a living wage for its lowest earners."
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## Seattle Approves \$15 Per Hour Minimum Wage

• #### Re:Behind the curve (Score:5, Informative)

on Tuesday June 03, 2014 @05:30AM (#47153135)

It's indexed to inflation. The value is \$15 in 2017 dollars. For the sake of making this readable, I will represent the value of \$15 in 2017 as \$X, and the value of \$15 in the year it is earned as \$Y. Thus, in 2017, X = Y. After 2017, X > Y. Before 2017, X Y. X and Y might still be hard to read but I promise this was worse before I edited it, since I kept saying "\$15 in 2017 dollars" for X and "\$15 in contemporary dollars" for Y :).

If you look at the graph, it only converges on \$X wage for all businesses by 2025.

The 2021 figure is when the last business category ( 500 employees) hits a \$Y minimum wage, and minimum \$X of total compensation. Eg. in 2021 those companies can count healthcare against the \$X, while only actually paying \$Y. But by 2025, and they still have to be ready to pay the full \$X by 2025.

• #### First city? (Score:5, Informative)

on Tuesday June 03, 2014 @05:35AM (#47153155) Homepage

In the first year of implementation, hourly minimum wage will be raised to either \$10 or \$11 according to the employer size category. By 2021, hourly minimum wage across the board should be at or above \$15. Seattle is the first city to implement a living wage for its lowest earners

Santa Fe has had a living wage since 2003, presently at \$10.66. San Francisco implemented a living wage shortly thereafter, presently at \$10.74. I'm sure there are others at this point.

• #### Wealth Inequality in America (Score:4, Informative)

on Tuesday June 03, 2014 @06:00AM (#47153225)

I'll just leave this here:

• #### Re:Hello automation! (Score:4, Informative)

on Tuesday June 03, 2014 @06:19AM (#47153305) Homepage

There are, suprisingly, a lot of adult fast food workers.

http://eatocracy.cnn.com/2014/... [cnn.com]

• #### Re:Behind the curve (Score:2, Informative)

on Tuesday June 03, 2014 @06:21AM (#47153319)
Because wages are generally only a fraction of the cost of goods sold, raising wages doesn't result in anywhere near as much of an increase in prices. Raising Walmart's minimum by ~50% would result in 1.1% price increases [businessinsider.com].

My guess would be that a large chunk of the workforce having significantly more spending money would help most companies sell *more* product, even with a minor price increase. Why doesn't Walmart just up it's wages, if it's such an obviously good idea? It still has to compete with others who probably won't follow suit. The only way to ensure a level playing field is to set a general minimum wage that applies to everyone - and set it high enough that full-time employees can actually afford the goods and services needed to survive (and maybe even participate in the economy a bit beyond that). The Walmart CEO himself asked Congress to do this in 2006.
• #### Re:Sweden (Score:5, Informative)

on Tuesday June 03, 2014 @06:29AM (#47153343)

"Oh, hang on. Sorry, he was writing about socialism, wasn't he?"

Orwell, is a democratic socialist. He was criticizing stalin's russia

"... for the past ten years I have been convinced that the destruction of the Soviet myth was essential if we wanted a revival of the socialist movement."

http://en.wikipedia.org/wiki/A... [wikipedia.org]

AKA he wanted to revive the socialist movement. He stayed a socialist.

• #### Re:Hello automation! (Score:2, Informative)

on Tuesday June 03, 2014 @06:29AM (#47153345) Homepage

Teenagers can do actual work like mowing lawns, etc...
I pay a local teen \$20 every 2 weeks to mow my lawn, he has 30 houses he mows in the neighborhood, so he is bringing home \$600 tax free every 2 weeks. Pretty damn good money for a kid.

and he is undercutting the lawn services by 50% making it easy to get clients.

• #### Re:Behind the curve (Score:5, Informative)

by Anonymous Coward on Tuesday June 03, 2014 @06:39AM (#47153383)

The story was later corrected... the math is off and is incredibly misleading.

• #### Re:Minimum wages create unemployment (Score:3, Informative)

on Tuesday June 03, 2014 @06:45AM (#47153401)
And then the unemployed are forced to do voluntary work as one of the requirements to receive government payments. This is the way it works in Australia. Converting low-paid work to slave labour.
• #### Re:Behind the curve (Score:4, Informative)

on Tuesday June 03, 2014 @07:44AM (#47153685)

You realise costco pays employees so well wallstreet analysts accuse them of "excessive benevolence" right?

• #### Re:I can never wrap my head around this. (Score:3, Informative)

on Tuesday June 03, 2014 @07:50AM (#47153701) Homepage

So how in the word is it possible that in the US 15/hour is barely a living wage? How wasteful a life are you living there seriously?

These are my monthly bills.

Mortgage \$500

Electric \$120

Car payment \$300

Internet \$70

Water & Trash \$50

Phone \$50

Student loan \$300

Car Insurance \$120

Medicine \$250

Retirement \$100

Gas & Groceries \$550

Savings \$100

Life Insurance \$60

That's a total of \$2570

If I take out savings, life insurance and retirement savings, that would be \$2310. Let's say my car and student loan is paid off. That would be \$1710. My take home pay after taxes is \$1100 a month. I am fortunate enough to be married to someone who makes more than me and we can pay our bills and save for retirement.

If you make \$15 an hour in my town, you might be able to cover that \$1710, depending on how much your health insurance costs. I have a friend that makes \$15.17 an hour and brings home just under \$1800 a month. This was before the Affordable Care Act went into place and everyone had to have some kind of insurance.

Let's say I'm a healthy person who doesn't need medication. Subtracting that \$250, you get \$1460. My salary would still not be enough to cover the bills. My friend may be able to cover the bills, but that depends on how much she is paying for health insurances as well. At \$15 an hour, if there's nothing wrong with you, you would probably be okay, providing nothing ever goes wrong. This is also in my rural area of the country. I'm thinking a large city like Seattle, NY, LA, Miami, etc., \$15 will still force you to find a second job.

For \$15 an hour, where I live, you're just scraping by. You're not going to get any vacation pay, not that you need it because you couldn't afford to go anywhere anyway. Most people in my town make \$10-12 an hour and have a second job.

I don't live an extravagant life. My life is mostly work and home with an occasional night out with friends. If I was on my own, with my salary, I'd never be able to eat out, travel, or do much other than work just to cover my bills.

• #### Re:Even higher! (Score:3, Informative)

on Tuesday June 03, 2014 @08:04AM (#47153773) Homepage

That's actually a flat out lie. All studies refute what you just said. Actually common knowledge refutes what you just said. When a business needs one additional hire they don't hire two people just because labor is cheap and they can afford it. They still hire just ONE. Low wages DO NOT CREATE JOBS. I'm so sick of hearing this lie repeated...

LOW WAGES DO NOT CREATE JOBS. GIVING WEALTHY PEOPLE MORE MONEY DOES NOT CREATE JOBS. HAVING MORE PEOPLE THAT CAN AFFORD A SECOND PAIR OF SHOES CREATES JOBS.

• #### Re:Behind the curve (Score:1, Informative)

by Anonymous Coward on Tuesday June 03, 2014 @08:16AM (#47153865)

No - a 5% increase in wages also incurs the following costs paid by the business:

Increased employer payroll taxes
Increased costs for employer provided life insurance
Increased costs for Short Term Disability insurance
Increased 401K matching contributions

So ... a 5% increase in wages can easily be a 20% increase in business cost.

• #### Total nonsense (Score:4, Informative)

on Tuesday June 03, 2014 @08:39AM (#47154001)

Raising Walmart's minimum by ~50% would result in 1.1% price increases

Which is complete bullshit if you actually understand accounting. (Disclosure - I am a cost accountant in my day job) You'll note that the article you linked to has no actual analysis attached. If you actually look at Walmart's financial statements and information about their financials you would find that Walmart has around 2.2 million employees with an average unburdened [wikipedia.org] wage of \$12.83. That means they pay around \$55 Billion in wages each year which amounts to around 15% of their costs. That means that if you increase wages by 50% you would be adding \$27.5 Billion in cost to the company each year which is significantly greater than the 2014 Net profit. Increasing wages by 50% would make Walmart instantly unprofitable.

I'm not even counting the cost of lost sales from the increased prices or the increased burden (overhead) costs that come with paying higher wages. So no, the effect would be FAR greater than 1.1%. You might want to actually check your sources instead of just accepting uninformed (or disingenuous) assertions at face value. I don't have any problem with increasing the minimum wage but don't be stupid about what the impact might be.

• #### Effect of wage increases (Score:4, Informative)

on Tuesday June 03, 2014 @08:45AM (#47154045)

A 5% increase in the minimum wage could easily be 20% increase in costs.

I'm an accountant and that is pretty much nonsense. A 5% increase in wages cannot result in a >5% increase in costs. In the real world this is true even factoring in overhead because wages typically are significantly less than 100% of total cost. It would be correct to say that a 5% increase in wages could result in a 20% (or more) decrease in profit - that is certainly possible, particularly in a low margin business.

• #### Re:Sweden (Score:5, Informative)

on Tuesday June 03, 2014 @09:23AM (#47154365)

You're confusing the term "socialist" with "greedy opportunist." The latter exists in just about every political/economic system.

"Never judge a philosophy by its abuse."
-- Saint Augustine

• #### Re:Behind the curve (Score:4, Informative)

on Tuesday June 03, 2014 @09:32AM (#47154425) Journal

Care to place a wager?

Seattle currently has a 16.6% unemployment rate for youth age 16-24 (based on this data [census.gov].

I'd be glad to wager that by 2020, the unemployment rate for youth age 16-24 in Seattle will be higher than 16.6%, with \$50 going to a charity of your choice.

• #### Re:Even higher! (Score:5, Informative)

on Tuesday June 03, 2014 @09:37AM (#47154469)

Even at the median rent level, a worker that earns \$8/hour

All of your numbers seem to magically assume a full-time job. Hint: many people who work at or near minimum wage don't have full-time jobs. They thus often don't get benefits, which means they don't get time off for illness or anything, which means you need to factor in lost wages when they can't make it to work.

When the GP says they have to cobble together 2-3 jobs, it's often 2-3 independent part-time jobs, which together often don't add up to 1 full-time job in terms of total wages. And to keep said jobs, you often have to work whenever you're demanded to, which might mean working two full shifts in one day some days, and nothing other days. Unless at least one boss is willing to be flexible, it will be difficult to hold onto more than one job, too.

If some of the jobs are seasonal or dependent on the weather or a service job where you only get called in when things are busy, expect to go through significant periods where you're making a lot less than full-time on that minimum wage.

will still have \$450/month left over for food, clothing, etc.

The median rent level shouldn't be taken as a cost of living for any particular area in the U.S. -- obviously in most big cities, the median rent for the city will likely be higher than the U.S. overall. Also, unless you have dependents, you're probably going to pay at least some income tax with that sort of income -- not a lot, but it could still decrease your monthly discretionary spending by maybe \$30-50/month (maybe more), which is a significant percentage of \$450.

However, let's assume your numbers for the moment. Have you ever had to live on something close to minimum wage in a big city? There are a LOT of things that have to fit into that "\$450/month left over for food, clothing, etc." It's not just "etc."

Do you need a car to get to your job? Insurance alone in a big city for a young person (most likely to be working at minimum wage) might cost you \$100-200/month, not to mention fuel, maintenance, and a car payment. It's pretty difficult to imagine a situation where you could own a car for less than \$100/month in a city. And if you don't have a car, you might have less flexibility about where and when you can work, or whether you'd be able to get between jobs efficiently. So you end up with a commuter pass for public transport instead of a car, which might also cost ~\$100/month. (If you don't have a car, though, you might occasionally need to pay for transportation to get to somewhere unusual that you can't get to by public transport.) So, let's say at least \$100/month for transport, probably at least \$200/month if you really need a car.

Next let's talk about utilities. It helps to have a phone, if you want to actually be able to get calls to come in for a job. Even if you go with the cheapest landline, combine it with heat and electricity, it seems doubtful you're going to get away with less than \$100/month total for utilities. Don't think there's going to be much left over for a cell phone or cable tv/internet.

Now you have to budget for miscellaneous expenses, like doctor and dental bills. If you're healthy, great. I know Obamacare is supposed to give poor people health insurance, but so far I get the impression it's mostly catastrophic health insurance unless you pay a higher premium (too high for your budget). Let's suppose you get a magic subsidy that gives you minimal coverage without any premium (most people this would also add a signfiicant expense to your budget as well, potentially thousands of dollars per year). If you just get sick, or have a toothache, be prepared to pay at least something out of pocket. On the low end, you might be able to get away with budgeting only \$10-20/month for this, but if you have any health problems, you might need to budget a lot more.

What about other miscellaneous expenses? Need a haircut? Get your

• #### Re:Behind the curve (Score:3, Informative)

<dadinportland AT yahoo DOT com> on Tuesday June 03, 2014 @10:36AM (#47155075) Homepage Journal

"Minimum wage is not supposed yo be a living wage."
Stop with that nonsense.
It's not true.
"No business which depends for existence on paying less than living wages to its workers has any right to continue in this country." FDR

in 1964, the min wage was 1:15. You could actually live off that with a one income family.
Min wage has not kept up with the real cost of basic needs. like housing, transportation, entertainment, food, cloths.

1964 Avg. Rent 115; avg gas 30 cents; avg bread 21 cents;

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