Seattle Officially Begins Destroying Its Economy

I posted just over a month ago that Seattle was considering  inflicting a $15 per hour minimum wage law. Now they have done it. As the Daily Caller reported yesterday:

In a 9-0 vote, the Seattle City Council approved a minimum wage hike from the state’s current $9.32 per hour to $15 per hour, KIRO 7 reports. Washington state already has the highest minimum wage in the country.

Pushed through by Democratic Seattle Mayor Ed Murray and Socialist City Council member Kshama Sawant, the hike is bringing heavy criticism from both Democrats and Republicans.

The phase-in period starts on April 1, 2015. Big businesses such as Starbucks will be required to implement the new wage over three to five years. Smaller business have four to seven years. Many franchise owners have deep concerns about the new minimum wage.

Also, tips will only be counted as part of wages temporarily. Eventually, even people who get tips will also have to be paid $15 an hour.

I can’t say I’m totally unhappy about this law. While I hate to see Seattle damage itself, the prospect of liberals who own businesses going bankrupt because they were finally force to live by the “progressive” principles they espouse has an appeal.

I’d like to be happy that we are all about to get a public warning about what happens when you raise the minimum wage. Sadly, I’m sure that everyone will claim that it only failed because the rest of the nation did not also raise their wages.

I’m sure all the thriving businesses that will prosper just over the city limit will make that argument seem plausible.

How can I be so sure that this minimum wage law is going to hurt Seattle’s economy? Mostly due to economic law but partly because just the possibility of the minimum wage law was hurting the Seattle economy.  KUOW.org published an article that showed one business owner or entrepreneur after another who had postponed or cancelled plans for development because of the prospect of a higher minimum wage.

A typical example:

Last year, Roos began planning to open a second business, closer to her home in Seattle. As the mother of three young kids, she thought there would be a market for a specialty toy store in her section of town. 

She created a business plan, was preapproved for a loan and had started looking for a location. She had hoped to open by this summer. “Now I see how fortuitous that was that I didn’t,” Roos said.

While she was busy searching for locations, Roos said she was not paying attention to what was happening politically in the city. It wasn’t until earlier this year she realized the city’s elected officials were serious about raising the minimum wage in Seattle to $15 an hour. “I did remember panic coming over me. I’m like, what are people talking about?” she said.

Roos’ business plan called for hiring two to three employees who would be making close to the current minimum wage. As a retailer, she expected margins would be extremely tight, since her main competition would be the online market.

An increase to $15 an hour “is not viable for a lot of small businesses. It just isn’t,” she said.

So Roos stopped scouting for locations, and she shelved her business plan. Even though she plans to take it up again next year, she “probably would not move forward with it. It’s just too risky,” she said.

Tell me again how the minimum wage is not a job killer.