A ‘Wage’ War on the Poor
$15 minimum hurts workers as Seattle previews NY’s pain
THE Fight for $15 has a history in New York — in 2012, hundreds of minimum-wage workers launched the movement by walking off their jobs to protest and demand a higher minimum wage. But if you want a glimpse of the future for the city, look at Seattle.
A new study published by University of Washington economists found that, as conservatives long argued and as basic economics would seem to have predetermined, Seattle’s unprecedented minimum-wage hike actually hurt the very workers it sought to help.
Specifically, the economists found, as businesses were forced to devote more of their revenue to payroll, they scaled back workers’ hours by nearly 10 percent.
So even though the minimum wage had ticked up from $11 to $13 — on its way to $15 in 2021 — Seattle’s low-income workers ended up bringing home $125 less each month in 2016.
It’s worth noting that these find- ings are preliminary, not yet subjected to the scrutiny of peer review. But as dramatic as the study is, its lesson rings true here in New York City, where we’re already seeing early indications of the same Seattle phenomenon.
Last year, New York passed legislation that will raise the minimum wage to $15 by 2018 for almost all businesses in the Big Apple. Schnipper’s Quality Kitchen, a New York burger chain, is already making tough cuts to compensate for this added expense, as The Post reported last week.
As Schnipper’s labor costs increase, the burger joint has reduced its workforce by 10 percent. It’s also cut hours for its existing staff and increased prices on the menu.
And Schnipper’s isn’t alone. Between 2010 and 2015, the fast-food sector saw 7 percent growth in employment — in other words, a quickly increasing number of job opportunities for low-wage workers. But this year, the minimum wage rose to $12 in New York City for fast-food workers. Since then, job growth has been a sleepy 2 percent, the Employment Policies Institute reported this month.
The Fight for $15’s advocates promised our poorest workers a living wage. But early evidence suggests that, however well-intentioned, the movement has actually resulted in lower wages and less opportunity.
The Fight for $15 operates on the faulty assumption that businesses will simply buck up and swallow the cost of rising labor expenses — that they can, essentially, already afford to pay more but simply choose not to.
In reality, businesses have to make tough choices and cut back, so it’s often low-income workers who pay the price for this progressive policy.
The elitist politicians pushing through radical minimum-wage hikes surely understand the financial jig they’re asking businesses to dance. When it comes to the budget in their own offices, they apparently can’t make the finances work.
Right now, 18 of New York’s Democratic members of Congress have co-sponsored the federal Raise the Wage Act, which would raise the minimum wage nationwide to $15 by 2024. These congressional supporters include Sen. Kirsten Gillibrand, who re- cently tweeted that “no person who works 40 hours a week should still live below the poverty line.”
Yet not a single one of New York’s 18 senators and representatives co-sponsoring the Raise the Wage Act pays a $15 minimum wage to all his or her staffers — in fact, they don’t pay their interns at all, according to an analysis by the Employment Policies Institute.
Then again, perhaps New Yorkers should envy politicians who stop at mere minimum-wage hypocrisy.
Mayor de Blasio announced last year that he was raising the minimum wage to $15 for city employees by 2018. Unlike the private sector, which has those pesky balance sheets to worry about, de Blasio apparently isn’t worried about increased public spending on payroll. So as New York City’s labor costs rise, taxpayers will foot an extra $202 million by 2020.
Like so many get-rich(er)-quick schemes, the Fight for $15 deserves some skepticism. Vulnerable lowincome workers have the most to lose from progressive panaceas gone awry. And New York City is getting a depressing visit from the future as that skepticism is rewarded in Seattle.