Low wage workers in Seattle who spent months agitating for a city-wide $15-per-hour minimum wage were quite successful in their quest. But many have suddenly found that the new rate has had unexpected consequences.
Some workers across the city are left telling bosses to give them fewer hours at the higher wage because a full week’s earnings now puts them past the threshold for some welfare payments such as food stamps and assistance with rent.
Of course, one of the things that supporters of the higher wage said was that they wanted to help lift min. wage workers out of poverty and welfare.
Only last week, for instance, Los Angeles Mayor Eric Garcetti claimed that a $15 min. wage in his city would lift 600,000 out of poverty. Self-avowed socialist Bernie Sanders, a VT Senator and a candidate for the Democrat nomination in 2016, also recently claimed that a $15 min. wage would “lift millions” of Americans out of poverty, off welfare, and into the buying public.
But now some workers in Seattle are finding that the higher wage is forcing them off the welfare programs they would rather stay enrolled in and, instead of celebrating their higher income, they are imposing fewer work hours on themselves in order to stay on assistance.
Seattle’s KIRO-TV recently spoke to a nursing nonprofit that admitted that some workers are trying to cut hours and earn less to avoid losing assistance. In another case, a local radio station has been talking about the story.
“If they cut down their hours to stay on those subsidies because the $15 per hour minimum wage didn’t actually help get them out of poverty, all you’ve done is put a burden on the business and given false hope to a lot of people,” said KIRO-FM’s Jason Rantz said this week.
There have been other unforeseen consequences to the higher wage. Some restaurants are tacking on a 15 percent surcharge onto customer’s bills in order to avoid firing workers.
Other stores, restaurants, and small businesses are simply closing down because they can’t afford the wage hike. By March of this year, for instance, restaurant closings increased at a much higher than average rate in Seattle.
Many restaurants noted that the new wage put labor costs at nearly 50 percent of operating costs, and that made profit margins disappear.
Follow Warner Todd Huston on Twitter @warnerthuston or email the author at email@example.com