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Seattle’s Minimum Wage: Bad Hygiene and Lower Wages

California’s minimum wage is set to gradually increase to $15 by 2022, following in the footsteps of minimum wage pioneer city Seattle.

Unfortunately, the unintended consequences of Seattle’s minimum wage experiment are starting to show, both in deteriorating restaurant quality and in decreasing wages for low-income workers.

According to the latest study, Seattle’s 2016 minimum wage hike approved by the Seattle City Council appears to have pushed restaurants to deal with rising labor costs by cutting corners in hygiene. Researchers at Ball State University in Indiana concluded that overall restaurant health code violations increased by 6.4% and less severe violations increased by 15.3% with each dollar increase of the minimum wage.

Bad hygiene is gross, but it isn’t the only serious consequence of Seattle’s minimum wage increases. Researchers from the University of Washington published in June their finding that Seattle’s increase from $11 to $13 coincided with a decrease in actual wages for low income workers – the exact opposite of the policy’s intended result.

According to the study, the 2016 increase to $13 led to a 9% decrease in hours worked at low-income jobs, while hourly wages rose by 3%. This means that on average people in low-wage jobs earned around $125 less per month than they earned before. Instead of helping people in low wage jobs, significantly raising the minimum wage in Seattle has actually hurt their earning ability!

How Government Unions Are Destroying America

Not one presidential candidate, apart from Gov. Walker’s last-ditch rhetoric prior to dropping out, has discussed the problems with unionized government as a major issue. That’s too bad, because these problems are bigger than even most critics acknowledge.

When people discuss the need to reform, if not eliminate, public sector unions, the only reason typically cited is that their demands are bankrupting our cities and states. And reformers also usually fail to communicate the fundamental differences between government unions and private sector unions, or emphasize the bipartisan urgency of public sector union reform. Government unions don’t merely drive our cities and counties into service insolvency if not bankruptcy, they are distorting policy decisions of fundamental importance to the future of America.

With a focus on California, and in no particular order, here is an attempt to summarize how this is occurring:

(1) The Economy

California has the highest taxes and fees in the U.S., and is consistently ranked as the worst state in America to do business. California also has the highest paid public employees in the United States, and with state and local debt and unfunded retirement obligations now hovering around $1.0 trillion – nearly half of the state’s entire GDP – virtually all new state and local taxes and fees are to pay for services that have already been performed. The uncontrollable political power of state and local government unions, combined with their insatiable appetite for more pay, more benefits, and more members, has – across all areas of policy – shifted political priorities from the public interest to the interests of public employees. The primary reason for excessive taxes and fees, as well as fewer services and less infrastructure investment, is because California’s unionized state and local government workers receive pay and benefits that are twice what the average private citizen earns.

(2) Cronyism and Financial Special Interests

When government unions control the government, big business either gets out of the way or gets on board. The idea that government unions protect the public interest against big corporate interests is absurd. Government union backed policies create deficits that bond issuers earn billions underwriting. Excessive pension benefits create additional hundreds of billions in pension fund assets invested on Wall Street. Excessive regulations are enforced by additional unionized government employees, to which only the biggest corporations can afford to comply. Government unions enable and enrich the largest corporate and financial interests at the expense of small independent businesses and emerging competitors.

(3) Environment

When it comes to cronyism, the “clean-tech” sector has risen to the top of the list. Government unions are partnering with “green” venture capitalists to carve up the proceeds of California’s carbon emission auction proceeds, a tax by any other name that will eventually extract tens of billions each year from California’s consumers to fund investments that wouldn’t make it in a normal market. From high speed rail to side loading washers that tear up fabric, strain backs, and require expensive maintenance, “green” projects and products are being forced on Californians in order to enrich investors and corporations. But it doesn’t end there. A bad fire season isn’t because of normal drought recurrence, no, the cause is “man made climate-change,” so fire crews have a claim on CO2 emissions auction proceeds. A heat wave isn’t a heat wave, it’s global warming – and since crime is statistically known to increase during hot weather, police agencies also have a claim on CO2 emissions auction proceeds. Code inspectors and planners? Climate change mitigation via enforcing “additional” energy efficiency mandates and higher housing density. Transit workers whose conveyances replace cars? Ditto. Teachers who insert climate change indoctrination into curricula? Ditto.

An entire article, or book for that matter, could be written on the synergistic symbiosis between environmental extremists, big business/finance, and government unions. What about the artificial scarcity environmentalism creates by restricting development of land, energy, water, and other natural resources? When this happens, the wealthiest corporations and developers make higher profits while their smaller competitors go out of business. Utilities, whose margins are fixed, raise revenues which increases their absolute profits. Union controlled government pension funds, whose entire solvency depends on asset bubbles, ride investments in these artificially scarce commodities to new heights. Property tax revenues rise because home prices are artificially inflated.

(4) Infrastructure

California’s deferred maintenance on existing infrastructure – roads, bridges, rail, port facilities, utility grid, dams and aqueducts – has been assessed in the hundreds of billions. New infrastructure to solve, for example, water scarcity, would include toilet-to-tap sewage reuse, desalination, enhanced runoff capture, and – dare we say it – a few new dams. But none of these projects get off the ground, not only because environmentalists oppose them based on mostly misguided principles, but because artificial scarcity enriches established special interests, and because all the public funds that can possibly be found are instead perpetually needed to pay unionized government workers. More pay. More benefits. More government workers. Infrastructure? It’s environmentally harmful.

(5) Immigration

No matter where one stands on this sensitive and complex issue, they must recognize that government unions win when immigrants fail to prosper or assimilate. While American culture retains a vitality that is almost irresistible to newcomers and may overcome all attempts to undermine and fragment it, if government unions had their way, that’s exactly what would happen. Because the more difficulties new immigrants encounter, the more government workers are required. If immigrants fail to find jobs, if they become alienated and traumatized, if they turn to crime or even terrorism, then we need more welfare and social workers, we need more multilingual teachers and bureaucrats, we need more police, and we need more prisons. The unpleasant truth is this: If we import millions of destitute immigrants into America – people with marginal skills from cultures that are hostile to American values – it is a meal ticket worth billions of dollars for government unions, and for every crony business who services the programs they administer.

(6) Authoritarianism

By over-regulating all activity that so much as scratches the earth, whether it’s to develop land, water, energy, minerals; to farm, transport, build, manufacture; to enforce these rules, more government powers are required. Similarly, by upending the cultural fabric that’s nurtured a social contract in America so strong that volumes of law never had to be written, but were instead the stuff of mutually understood courtesies and customs, we invite strife. To manage this, more rules and referees are necessary, enforced by more government. As society loses its cohesion, and as ordinary honest citizens rebel against excessive taxes and regulations, government unions benefit from training their members to mistrust the fractious and rebellious public. After all, unionized government workers are now a special class. As society fragments, they become more cohesive. As the middle class dissolves, they retain their economic privileges. Perhaps more than any other factor, government unions impel the growth of a police state.

(7) Education

To consider education is to save the most important for last. Because everything that is wrong with where our culture is headed can either be magnified or mitigated by how we educate our young students, regardless of their income or gender or culture or faith. As it is, in California’s public schools, students are taught that open space is sacred, that energy development will destroy the planet, that capitalism is innately flawed if not irredeemable, and that the legacy of Western European culture is a primary cause for most problems in the world. Instead of teaching children to develop functional skills in reading and math, they are being indoctrinated to believe that any failure or disappointment they ever encounter is the result of discrimination. Given the demographics of California’s youth, the union fostered educational environment currently imposed on them is nothing short of a catastrophe.

The reader may not agree with all seven of these assessments, but regardless of the scope of anyone’s reform advocacy, they must confront government unions. Because reform in all of these areas is stopped by government unions. Do you want to unleash California’s economic potential? Do you want to reduce the power of the financial special interests and crony capitalists? Do you want to restore balance to environmental policies, and build revenue producing infrastructure that eliminates scarcity and lowers the cost of living for ordinary people? Do you want to stop importing welfare recipients and instead admit highly skilled and highly educated workers who will enliven our economy and our culture with spectacular success? Do you want to avoid living in a police state? Do you want California’s children to be taught lessons that build their character and give them useful skills?

Reformers must recognize that government unions have a natural interest in preventing any of these reforms from ever happening. Addressing any of these issues without also taking on the government unions is futile. Conscientious members of government unions can play a vital role in reforms, by the way, if they are willing to make their personal interests secondary to their duties as a public servant. If California can be rescued from the grip of government unions, eventually everyone will benefit. And as goes California, so goes the nation.

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Ed Ring is the executive director of the California Policy Center.