In NZ the minimum wage has gone from $7.50 to $20 since I moved here and it has not made a scrap of difference to the poverty levels.
What it has done is closed down many small businesses.
that's exactly what is happening in sf and sillycon valley. more small business closures and job losses for those at the bottom of the heap. those in high tech earning high incums don't work for small businesses.
https://www.forbes.com/sites/edrens...lose-and-employees-are-laid-off/#42b6e1cd30f0
Thanks To The Fight For $15 Minimum Wage, Small Businesses Close And Employees Are Laid Off
Just in time for the next round of nationwide fast food protests, new Labor department disclosures reveal just how much the Service Employees International Union has spent on its Fight for $15 campaign.
According to
an analysis of the disclosures by the Center for Union Facts, the SEIU has spent at least $90 million on the Fight for $15 effort over the past five years. This major investment has yielded the SEIU no significant boost in membership; its membership today is lower than it was in 2011, before the campaign began.
In an attempt to increase their impact, the Fight for $15 has partnered with the activist group Black Lives Matter for tomorrow’s protests. This is just the latest in a string of publicity stunts, organized by the high-priced PR firm Berlin Rosen, to try to keep the public interested in yet another round of “strikes.”
All of this isn’t to say that the Fight for $15 hasn’t had an impact. As I have revealed in
previous columns, extreme wage hikes have encouraged widespread automation, layoffs and business closures – eliminating job opportunities for those who need them most.
However, I haven’t shared the human element of these wage hikes – the faces of the $15 minimum wage. Revealing this emotional side is a more powerful way to get my point across than just tallying up the job losses.
These
stories include:
- Kelley Ulmer, owner of Almost Perfect Books in Roseville CA, had to close her bookstore after 25 years in July 2016 due to "the ever increasing minimum wage." As one employee said, the store “was like a second home to people.” The majority of the employees had worked there since the store had opened.
- Houman Salem, founder of ArgyleHAUS of Apparel in San Fernando, CA, is moving his operations to Las Vegas because of California’s $15 minimum wage. “At a time in which the demand is at its highest it’s probably ever been,” says Salem, “California has put the going out of business sign up.”
- Nat Cutler, owner the Abbot's Cellar in San Francisco, was forced to close his doors in January 2015 largely due the city's rising minimum wage. When you force small businesses with little-to-no margins as it is to increase their wages by over 25 percent in a very short timeframe, says Cutler, how are they supposed to survive?
- Larry Georgeton, co-owner of the Del Rio Diner in Brooklyn, NY, closed in July 2016 because of New York's rising minimum wage. “When I told them two weeks ago that we were closing the store,” said Georgeton, “a lot of tears were shed.”
- Muriel Sterling, owner of Sterling's Family Childcare in Oakland, CA had to lay off one of her employees who had been with her for years go and release some families because of Oakland’s minimum wage increase. She’s also had to end a free rides service for her low-income community. "This wage increase has not only hurt the employees,” says Sterling, “it has hurt the families and the children."
Many more similar stories can be found on
Facesof15.com.
Now for the good news. Policymakers are increasingly recognizing these consequences and pushing back against the fight for $15's destructive agenda.
Last month, Baltimore’s Mayor Catherine Pugh vetoed a proposed $15 minimum wage after highlighting the impact it would have on the city’s budget and small businesses including her own. (The costs associated would have caused her to close her consignment shop an extra day each week.)
Also last month, the city council in Flagstaff significantly lowered a planned minimum wage hike after city small businesses like
Country Host restaurant and
Cultured Yogurt dessert shop were forced to close because of it. A local nonprofit, Hozhoni Foundation, has also announced plans to close this summer and lay off its 150 employees because of the wage hike.
In the Chicago suburbs where I live, numerous cities are
opting out of Cook County’s $13 starter wage. Barrington, Oak Forest, Rosemont and Tinley Park have said no thanks, and Elk Grove is considering its own minimum wage plan.
As tomorrow’s protests show, the SEIU won’t take these losses sitting down. But they have recently
cut their budget by nearly a third – perhaps in recognition that they haven’t seen a return on their investment.
That’s exciting news for small business owners and employees across the country looking to realize a return on theirs.
https://freebeacon.com/issues/san-francisco-bookstore-closing-due-to-minimum-wage-increase/
San Francisco Bookstore Closing Due to Minimum Wage Increase
San Francisco's Borderlands Books will be forced to close as the city increases its minimum wage, and its owner Alan Beatts is tired of being criticized for talking about it.
"Most critics say ‘how dare you blame the minimum wage increase for you closing,'" he told the
Washington Free Beacon. "It's bullshit."
"They're either calling me a liar or chastising me for telling the truth."
Borderlands is a specialty bookstore that has been able to carve out a niche in San Francisco for the past 18 years. It has been able to support a staff of five, most of whom have been working together for more than a decade.
Beatts said he made a mere $28,000 in gross salary last year.
With the added labor costs the city's new minimum wage will eventually impose on the business, and the fact that books come pre-priced leaving no room for price increases, Mr. Beatts sees no way it can survive.
"At this point the business is doing fine but I look down the road and the business is losing $25,000 a year," he said. "It's going to put me out of work."
He is more concerned about how the store's closing will affect his employees though. "We're all friends," he said. "In some ways this is harder on the employees than me."
"For some of them book selling is the only thing they've ever done."
Mr. Beatts isn't just fed up with those who've attacked him for speaking out. He's also upset with the city for raising the minimum wage in the way it did and with the media for oversimplifying the issue. He doesn't see it as about whether there should or should not be a minimum wage, but about how the minimum wage is applied.
He blames the city for implementing a one-size-fits-all approach to the minimum wage hike without attempting to offset the damage it would do to small businesses. "They could've tried reducing our taxes or maybe implementing a separate minimum wage for small businesses," he said. "I'm not an economist, I'm just a guy who sells books."
"But I know that nothing was done," he said. "It was applied in a thoughtless manner."
https://www.sfexaminer.com/opinion/san-franciscos-15-minimum-backfires-on-small-business/
San Francisco’s $15 minimum backfires on small business
On Nov. 5, San Francisco celebrated its Election Day decision to raise the city's minimum wage to $15 an hour by 2018. Three months later, the hangover has arrived.
On Feb. 2, Borderlands Books on Valencia Street announced that it would be closing its doors by March 31, citing the recently approved minimum-wage increase as a driving factor. One day earlier and one block up the street, a restaurant called The Abbot's Cellar served its last customers, fingering the $15 minimum wage as a factor in its decision to close shop.
These aren't marginal businesses that had lost the support of their customers. The Gawker Media-owned website io9 praised the book outpost as an “oasis” for science fiction lovers, and said it was “simply unthinkable” that it would close its doors. The Abbot's Cellar was twice declared by the San Francisco Chronicle to be one of The City's top 100 restaurants.
The neighborhood hasn't changed much since November, but the economics of operating a business there have. In a blog post on its website, Borderlands explained that the minimum-wage hike would increase payroll costs by 39 percent. Competition from Amazon means that price increases aren't an option to cover that cost, so a 20 percent jump in sales was the minimum amount required to keep the doors open. Management concluded that this wasn't “a realistic possibility for a bookstore in San Francisco at this time.”
At The Abbot's Cellar, the economics were similarly stark. In an interview with Inside Scoop SF, partner Nat Cutler explained: “Restaurants have one way to cover their costs, and it's the price of their items. And especially for higher end places, all of a sudden those numbers start getting really high.” In a subsequent phone conversation, Cutler told me that a series of factors (including The City's sky-high rent) were to blame for those rising costs, but that the cost of the minimum wage increase is what put him over the edge.
Neither business is easily typecast as an anti-government ideologue. Borderlands' management says it supports “the concept of a living wage in principle,” and the restaurateur Cutler told me that he's also a proponent of a higher minimum wage — as long as it's a smart minimum wage.
For instance, Cutler sees the speed of the increases and the lack of a tip credit as two major missteps. The quick phase-in doesn't allow employers adequate time to adjust to a drastically different economic model, he said. And the omission of tip income from the wage calculation prevents the increase (particularly in the restaurant industry) from reaching those it's intended to: Employees who don't receive tips.
Cutler told me that businesses like his are faced with three choices: Increase sales volume, increase prices or find a way to absorb the costs. Like many small businesses in The City, the restaurant had no room for absorbing costs, and a miraculous increase in customer traffic wasn't forthcoming, either. Price increases were his only choice — and even that option was more than customers could handle.
It's not unusual for a minimum-wage increase to cause unintended consequences for businesses and their employees. Decades of empirical research have connected a higher minimum wage and lost jobs. Similarly, the nonpartisan Congressional Budget Office estimates that a half-million jobs would be lost nationwide if the federal minimum wage is increased by 40 percent, as President Barack Obama supports.
But these past increases that economists have studied weren't anywhere near the $15-an-hour figure that was passed in San Francisco. So it's not surprising that an unusually large wage hike is leading to unusually large consequences, including business closures.
The City's organized business community was mostly silent on the proposal, and the San Francisco Citizens Initiative for Technology and Innovation — aka sf.citi, described by the Chronicle as The City's “largest tech advocacy arm” — even endorsed the ballot measure. Of course, technology is making it possible for service industry businesses to replace newly-expensive employees with self-service alternatives where possible.
Call it another example of the law of unintended consequences.
