Democrats, not Republicans, Killed $15 in Cleveland

Earlier this year, the SEIU attempted to ram through a proposal in Cleveland to raise that city’s minimum wage by 85 percent to $15. The Cleveland City Council, consisting of 16 Democrats and 1 Green Party member, overwhelmingly rejected the idea, and even some union leaders opined that it would hurt the city’s progress.

Not satisfied with the democratic outcome, the SEIU threatened to take the issue to the ballot, where they could spend thousands of dollars to paint a misleading picture of the proposal’s impact. To prevent this, Cleveland city officials–led by Democratic City Council Kevin Kelly–asked state lawmakers to pass legislation that would block harmful initiatives like this one. The legislature granted the request, and this week Gov. John Kasich sign the bill.
It’s a simple story, but it’s an unflattering one for unions. That’s why it wasn’t surprising to see union-sympathetic reporters this week write headlines like this:

Ohio’s Kasich blocks local control over minimum wage

 

Cleveland’s minimum wage hike just failed — thanks to lobbyists and Gov. John Kasich

 

The Policy.Mic story bizarrely blames the American Legislative Exchange Council for the preemption legislation, arguing that it (and Kasich) refused to let “democracy play out in cities like Cleveland…” Of course, democracy did play out in the city–the Council just didn’t vote the way that unions would have hoped.

The post on Rachel Maddow’s blog was equally misleading, suggesting that the state’s preemption law violates “the wishes of…local officials.” Of course, it’s those same local official in Cleveland who asked for the wage preemption, so it’s unlikely that their wishes were violated here.

The Democratic City Council in Cleveland took a stand for economic common sense. The only thing shocking for the SEIU is that it didn’t get its way, which is why it’s now trying to spin a story that didn’t happen.

As The Ball Drops, The Minimum Wage Rises In 42 States and Municipalities

 

With January 1, 2017 around the corner, 42 states and municipalities are poised to ring in the New Year with extreme minimum wage increases. 
Nineteen states are raising their starter wages on New Year’s Day and some of the numbers are shocking. Arizona (24 percent increase), Maine (20 percent), and Washington state (16 percent) will see the largest increases. Meanwhile, twenty-three localities, including 12 cities in California, are also ringing in the New Year with starter wage increases. See the full table of New Year’s minimum wage increases below.
 
However, New York State and California provide employers with a dizzying maze of minimum wage increases. 
 
In New York State, where starter wage increases are dependent on business size, location, and type; small businesses and their employees are facing 14 different government dictated wage rates taking effect on December 31st.  View a full table of New York State’s patchwork of wage increases, published by the New York State Restaurant Association, here.
 
In California, 12 different cities are increasing their minimum wage on New Year’s Day in addition to the state-level hike. Cupertino, Los Altos, and San Mateo, which are all raising their starter wages by 20 percent to $12 an hour. Mountain View and Sunnyvale are both raising their starter wages by 18 percent to $13 an hour.
Labor unions and their activist allies may be popping the champagne on New Year’s to celebrate minimum wage increases, but businesses and their employees are the ones that will feel the hangover effects of business closures, lost jobs, and reduced hours.

New Year’s Minimum Wage Increases

State

Current MW

 2017 MW

Percent Increase

Alaska

$               9.75

 $            9.80

1%

Arizona

$               8.05

 $          10.00

24%

Arkansas

$               8.00

 $            8.50

6%

California¹

$             10.00

 $          10.50

5%

Colorado

$               8.31

 $            9.30

12%

Connecticut

$               9.60

 $          10.10

5%

Florida

$               8.05

 $            8.10

1%

Hawaii

$               8.50

 $            9.25

9%

Maine

$               7.50

 $            9.00

20%

Massachusetts

$             10.00

 $          11.00

10%

Michigan

$               8.50

 $            8.90

5%

Missouri

$               7.65

 $            7.70

1%

Montana

$               8.05

 $            8.15

1%

New Jersey

$               8.38

 $            8.44

1%

Ohio

$               8.10

 $            8.15

1%

South Dakota

$               8.55

 $            8.65

1%

Vermont

$               9.60

 $          10.00

4%

Washington

$               9.47

 $          11.00

16%

New York² (12/31)

$               9.00

 $          9.85

9%

Cities/Counties

Current MW

 2017 MW

Percent Increase

Albuquerque, New Mexico

$               8.75

 $            8.80

1%

Bernalillo, New Mexico

$               8.65

 $            8.70

1%

Cupertino, California

$             10.00

 $          12.00

20%

El Cerrito, California

$             11.60

 $          12.25

6%

Johnson County, Iowa

$               9.15

 $          10.10

10%

Las Cruces, New Mexico

$               8.40

 $            9.20

10%

Linn County, Iowa

$               7.25

 $            8.25

14%

Los Altos, California

$             10.00

 $          12.00

20%

Mountain View, California

$             11.00

 $          13.00

18%

New York City, NY³

$               9.00

 $          10.75

19%

Oakland, California

$             12.55

 $          12.86

2%

Palo Alto, California

$             11.00

 $          12.00

9%

Portland, Maine

$             10.10

 $          10.68

6%

Richmond, California

$             11.52

 $          12.30

7%

San Diego, California

$             10.50

 $          11.50

10%

San Mateo, California

$             10.00

 $          12.00

20%

San Jose, California

$             10.30

 $          10.50

2%

Santa Clara, California

$             11.00

 $          11.10

1%

Seattle, Washington

$             13.00

 $          15.00

15%

SeaTac, Washington

$             15.24

 $          15.35

1%

Sunnyvale, California

$             11.00

 $          13.00

18%

Tacoma, Washington

$             10.35

 $          11.15

8%

Wapello County, Iowa

$               7.25

 $            8.20

13%

¹ 25 or fewer employees, remains at $10
² Different tiers, $9.85 is avg. of two non-NYC rates
³ $10.50 for small businesses, $11 for large, $12 for fast food
⁴ $11 to $15 depending on size/type of employer

 

Discredited Berkeley Team Again Praises Wage Hikes

Earlier this year, the Albany Times-Union explored the cozy relationship between labor unions and a research outfit at the University of California-Berkeley. The Berkeley team–which is partially funded by and works closely with organized labor–is often called upon when a favorable report is needed on the impacts of a rising minimum wage.

They don’t disappoint: Asked by the Times-Union if their research had ever delivered anything other than a favorable report, the Berkeley team couldn’t name one example.

The latest entry in their rose-colored repertoire was released on November 29th, conveniently timed to the same day as the SEIU’s latest fast food strike. The press release predictably proclaims that “minimum wage increases are a real boost for restaurant workers and don’t hurt business.” In San Jose specifically, the professors claim that the city’s 25 percent increase in the minimum wage only caused a minimal increase in restaurant prices without reducing jobs.

But the authors conclusions about the labor market impact are only based on overall restaurant employment in San Jose. This is woefully incomplete: For starters, it completely ignores the impact on younger and less-skilled job seekers, who are greatest risk of being displaced.

Their approach also masks restaurant-specific changes–say, to staffing levels or hours– that have a negative effect on employees: Our survey of 163 restaurants after the increase took effect found that 45 percent had cut employee hours and 42 percent had reduced staffing.

The stories back up the statistics: The city’s oldest restaurant, Original Joe’s, had to cut back on staff and employee hours. Co-owner Matt Rocca told USA Today that the hike cost his restaurant $90,000 a year, forcing him to lay off five of his 67 employees and shift closing time up to 11 p.m. They also had to increase prices 10 percentseveral times higher than reported by the Berkeley team.

At the present moment, the rest of California is full of stories of otherwise healthy businesses that have closed or left the state as a consequence of aggressive minimum wage hike. Just last week, a call center in San Diego reported that it was moving 75 jobs to Texas because of the change in the minimum wage. Bookstores near Sacramento have even closed because of $15. (Dozens of stories are available at FacesOf15.com.)

When considering a minimum wage increase, the rest of the country should consider California’s example and answer, “No way, San Jose.”