Yesterday Seattle city council unanimously voted for a $15 an hour minimum wage, for all businesses, regardless of size (one to whatever) phased in over several years. Then it is indexed to inflation, so the issue does not have to be repeated. (Now, are any of these ever indexed to deflation as well, so when an economy is recovering, wages drop?)
Businessweek shares how they did it: they formed a 24 person commission headed on one side a house union leader and on the other a developer representing business.
Now, if you grew up in Seattle, and watched the changes, and visit Seattle today, it is very clear what is going on. The welfare housing is being concentrated in the Rainier Valley, and gentrification everywhere else. In the central core and South Lake Union, there is relentless building and infrastructure being laid down for businesses like Amazon, Google, Fred Hutch (biotech) and many other unknowns, who earn big money and whose employees are well paid. Cities adore a tax base, and all of those small businesses, who've been around for decades and the buildings are owned by proprietors, are in the way of the developers and tax-seekers. Those small restaurants, convenience stores, tailors, countless small businesses have to go.
To have the head of the public employee's union on one side and Howard Wright on the other side is to have a hyena and a fox decide the fate of the cow. Big business/big government has won again, and all of the people who voted unanimously have an eye on bigger things.
Although the Howard Wright involved, whose money comes from the construction company, is now running an event planner company, he still has an interest in seeing the construction company thrive, plus his business is fed by contracts from those very big businesses who hire such services as his.
The most obvious challenge is to restaurant owners. They have adjusted before to minimum wage hikes, by introducing staging, in which chefs will work for free. That helps, but when dishwashers have to be paid $15 an hour, then it is a matter of income redistribution within the business. A good waiter helps make a restaurant, and if confronted with no compensation for excellence in waitering, good waiters will go where they are appreciated.
One city councilman said:
This post was going to be on architecture and small business revival, but when the $15 an hour was pushed through by the scion of a high-rise construction firm, well, that fit in nicely.
So Seattle will change. The mix of business and retail will change, more automation, and perhaps more sole proprietors, but where will they open shop? Innovators, critical to any economy, will simply start-up elsewhere. Seattle will get more Amazons, whose business model is yet to turn a profit. But with banks lending credit, there is no rational limit, only a bust which will occur at some point for not foreseeable reason.
Perhaps outlying districts will benefit. Hard to say. But the Amazon, google, biotech model is false economy, and the tax base is illusory. Severe budgeting problems ahead for Seattle, but all of today's actors will have moved on. And for those getting the raise, some 30% of it will go to government, which will hire people who will better inform you on how to think and feel.
And instead of the small building architecture necessary for small business start-up, we will have non-conducive high rises, like a Detroit. We'll see what the next decade brings.
Feel free to forward this by email to three of your friends.
Businessweek shares how they did it: they formed a 24 person commission headed on one side a house union leader and on the other a developer representing business.
Now, if you grew up in Seattle, and watched the changes, and visit Seattle today, it is very clear what is going on. The welfare housing is being concentrated in the Rainier Valley, and gentrification everywhere else. In the central core and South Lake Union, there is relentless building and infrastructure being laid down for businesses like Amazon, Google, Fred Hutch (biotech) and many other unknowns, who earn big money and whose employees are well paid. Cities adore a tax base, and all of those small businesses, who've been around for decades and the buildings are owned by proprietors, are in the way of the developers and tax-seekers. Those small restaurants, convenience stores, tailors, countless small businesses have to go.
To have the head of the public employee's union on one side and Howard Wright on the other side is to have a hyena and a fox decide the fate of the cow. Big business/big government has won again, and all of the people who voted unanimously have an eye on bigger things.
Although the Howard Wright involved, whose money comes from the construction company, is now running an event planner company, he still has an interest in seeing the construction company thrive, plus his business is fed by contracts from those very big businesses who hire such services as his.
The most obvious challenge is to restaurant owners. They have adjusted before to minimum wage hikes, by introducing staging, in which chefs will work for free. That helps, but when dishwashers have to be paid $15 an hour, then it is a matter of income redistribution within the business. A good waiter helps make a restaurant, and if confronted with no compensation for excellence in waitering, good waiters will go where they are appreciated.
One city councilman said:
Kshama Sawant, a socialist elected to the council on her own $15 pledge, calls those suggestions “fear mongering” and says people who cling to tips miss the point. “We don’t want any worker to be beholden to the mood of the customer on any given day,” she says.Hmmm.. I thought tipping was to assure that customers were not beholden to the mood of the waiter on any given day. And groundbreaking for a city council member to legislate to address moods people may or may not have at any given time. Progressivism is economic fascism, and the socialist contribution is to bring fascism to bear on what you think of feel.
This post was going to be on architecture and small business revival, but when the $15 an hour was pushed through by the scion of a high-rise construction firm, well, that fit in nicely.
So Seattle will change. The mix of business and retail will change, more automation, and perhaps more sole proprietors, but where will they open shop? Innovators, critical to any economy, will simply start-up elsewhere. Seattle will get more Amazons, whose business model is yet to turn a profit. But with banks lending credit, there is no rational limit, only a bust which will occur at some point for not foreseeable reason.
Perhaps outlying districts will benefit. Hard to say. But the Amazon, google, biotech model is false economy, and the tax base is illusory. Severe budgeting problems ahead for Seattle, but all of today's actors will have moved on. And for those getting the raise, some 30% of it will go to government, which will hire people who will better inform you on how to think and feel.
And instead of the small building architecture necessary for small business start-up, we will have non-conducive high rises, like a Detroit. We'll see what the next decade brings.
Feel free to forward this by email to three of your friends.
1 comments:
I saw this this morning and thought you might post on this John. Great insight. The City of San Francisco has been talking about this for a while and will probably visit it in November election time. I'm sure it will pass now that Seattle has set the precedent. Gentrification has been going on throughout the city for years but it is in full swing now. Not sure what to think of it in terms of my wife's business or middle class families like ours, but I'm not optimistic to say the least.
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