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News & Politics News & Politics

Businesses brace for 'serious cuts' as city enacts highest-in-nation $15 minimum wage

Posted by on Dec. 31, 2013 at 10:25 AM
  • 55 Replies
Businesses brace for 'serious cuts' as city enacts highest-in-nation $15 minimum wage


As talk builds on Capitol Hill over hiking the federal minimum wage, one city in Washington state is poised to set the highest rate in the nation.


On Jan. 1, an estimated 1,600 hotel and transportation workers in SeaTac, Wash., will see their pay jump to $15 an hour, a 60 percent increase from the state's $9.32 minimum wage.

While many workers look forward to the higher pay, employers are looking for ways to absorb the big increase in labor costs. Some plan on eliminating jobs.

"We're going to be looking at making some serious cuts," said Cedarbrook Lodge General Manager Scott Ostrander. "We're going to be looking at reducing employee hours, reducing benefits and eliminating some positions."

That's in the short term. Eventually, those jobs and more are expected to return as the Cedarbrook Lodge looks to build an addition to the hotel. The plan is to increase revenue to offset the higher labor costs.

But not every employer is being so ambitious. One has told a trade group it is going to close one of its two restaurants, eliminating 200 jobs.

The plan has also caused Han Kim -- who runs Hotel Concepts, a company that owns and manages 11 hotels in Washington state -- to shelve plans to build a hotel in SeaTac. The company already has three hotels in SeaTac, and Kim and a business partner were looking to build a fourth on land they own.

"Uncertainty is bad for business, and right now we're right in that area so we're just putting everything on hold," Kim said.

Opponents of the $15 minimum wage did score a legal victory late last week when a King County, Wash., judge ruled that it does not apply to any of the workers at the SeaTac airport. Superior Court Judge Andrea Darvas ruled only the Port of Seattle can set wage and other work rules at the airport. That eliminates 4,700 workers from the successful ballot initiative.

Backers of the $15 minimum wage vow to appeal the ruling up the state Supreme Court. One of the biggest supporters is Kshama Sawant, a socialist who also won her election to the Seattle City Council. She plans on making Seattle the next city to have a $15 minimum wage.

"There may be a few jobs lost here and there, but the fact is, if we don't fight for this, then the race to the bottom will continue," Sawant said.

Sawant is skeptical that the higher minimum wage will lead to mass layoffs. But the American Car Rental Association estimates 5 percent of low-wage jobs will be cut; and another 5-10 percent of those workers will be replaced by more experienced workers.

The owner of Dollar Rental Cars told Fox News she'll outsource some functions, change schedules and cut some staff in response to the new policy.


http://www.foxnews.com/politics/2013/12/30/highest-in-nation-15-minimum-wage-stirs-concern-from-local-businesses/
by on Dec. 31, 2013 at 10:25 AM
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Replies (1-10):
kcangel63
by Amanda on Dec. 31, 2013 at 10:27 AM
As I said in another post...

I disagree with raising min wage. Instead of raising the min wage, why not just give all others a pay cut by the amount they would raise min wage? It's essentially the same thing.

Those making $10, those who worked hard at lower paying jobs and earned their raises. Those are the people hurt by raising min wage. They won't get a pay increase. They will have gone from making ok (not great, but decent) pay, to min wage. Their pay will not go up by the same amount those working fast food and entry level jobs did.

The cost of living, of food, of products will go up to compensate for the increase in wages. The companies aren't going to eat the loss. They will compensate by making prices higher and cutting jobs.
Kate_Momof3
by Platinum Member on Dec. 31, 2013 at 12:22 PM
3 moms liked this

 Did you see the first part of the article where the successful, innovative business owner is going to expand his business to create revenue that will pay for the wage increase?

Those are the businesses that should thrive.

The ones who are clearly incapable of restructuring their business models to adhere to the new standards are either bad business people or jerks who just don't want to pay because they have a grudge against the new policy.

We really need to stop lowering our expectations for pay. There is no reason whatsoever companies can't figure out how to offer their employees a LIVABLE wage. Doing that, however, means they have to redistribute the company's earnings. The most successful businesses I've seen have been great corporate neighbors who uplift communities with well-paying jobs, excellent benefits, and continued domestic manufacturing despite what the competition does.

Believe me, the guys on the top are multi-millionaires who live very nice lives (alongside happy employees who stay with them for decades).

Billiejeens
by Ruby Member on Dec. 31, 2013 at 12:30 PM
2 moms liked this

It is bad when really stupid people get together in mass quantities.

kcangel63
by Amanda on Dec. 31, 2013 at 12:31 PM
What about small businesses and family run businesses? What about those just starting up?

Dh and I run our own businesses. We were talking about starting up a restaurant, but there is no way we could start up and pay servers $15 an hour.

Thankfully, the ones we run are just dh, myself, and a couple of my girls working. Thankfully the state isn't trying to run our business into the ground. Not yet.

What this is doing is killing the 'mom and pop' businesses. It will help the big guys like Walmart. You know, the ones that have a majority of the money anyway.


Quoting Kate_Momof3:

 Did you see the first part of the article where the successful, innovative business owner is going to expand his business to create revenue that will pay for the wage increase?


Those are the businesses that should thrive.


The ones who are clearly incapable of restructuring their business models to adhere to the new standards are either bad business people or jerks who just don't want to pay because they have a grudge against the new policy.


We really need to stop lowering our expectations for pay. There is no reason whatsoever companies can't figure out how to offer their employees a LIVABLE wage. Doing that, however, means they have to redistribute the company's earnings. The most successful businesses I've seen have been great corporate neighbors who uplift communities with well-paying jobs, excellent benefits, and continued domestic manufacturing despite what the competition does.


Believe me, the guys on the top are multi-millionaires who live very nice lives (alongside happy employees who stay with them for decades).

kcangel63
by Amanda on Dec. 31, 2013 at 12:32 PM
1 mom liked this
It's getting worse lately.

Quoting Billiejeens:

It is bad when really stupid people get together in mass quantities.

Billiejeens
by Ruby Member on Dec. 31, 2013 at 12:33 PM

 Didn't understand how that made any sense before when I read it, still don't.

Quoting kcangel63: As I said in another post...

I disagree with raising min wage. Instead of raising the min wage, why not just give all others a pay cut by the amount they would raise min wage? It's essentially the same thing.

Those making $10, those who worked hard at lower paying jobs and earned their raises. Those are the people hurt by raising min wage. They won't get a pay increase. They will have gone from making ok (not great, but decent) pay, to min wage. Their pay will not go up by the same amount those working fast food and entry level jobs did.

The cost of living, of food, of products will go up to compensate for the increase in wages. The companies aren't going to eat the loss. They will compensate by making prices higher and cutting jobs.

 

kcangel63
by Amanda on Dec. 31, 2013 at 12:36 PM
3 moms liked this
If you raise min wage from say $8 an hour to $15 an hour, all you're doing is giving those who make $15 an hour (before the min wage increase) a $7 an hour pay cut.

Those people who worked hard for their raises, or went to school and are starting off making $15 an hour are now punished. They are now equal to burger flippers.

Instead of trying to get people to strive to be better, and work their way up the ladder, they reward mediocracy.


Quoting Billiejeens:

 Didn't understand how that made any sense before when I read it, still don't.


Quoting kcangel63: As I said in another post...

I disagree with raising min wage. Instead of raising the min wage, why not just give all others a pay cut by the amount they would raise min wage? It's essentially the same thing.

Those making $10, those who worked hard at lower paying jobs and earned their raises. Those are the people hurt by raising min wage. They won't get a pay increase. They will have gone from making ok (not great, but decent) pay, to min wage. Their pay will not go up by the same amount those working fast food and entry level jobs did.

The cost of living, of food, of products will go up to compensate for the increase in wages. The companies aren't going to eat the loss. They will compensate by making prices higher and cutting jobs.

 

Billiejeens
by Ruby Member on Dec. 31, 2013 at 12:43 PM
1 mom liked this

No, employers won't be able to fill those jobs at $15 anymore so those will get raised up $6-$8 too.

Which will raise the price of everything, now the $15.00 an hour minimum wage person who was (lets say 5%) short of paying his bills is now 10% short - and there are fewer jobs.

Every job that can be outsourced to just outside the city limits, will be, the tax base will decline and the city will raise taxes.

Progressive ideas do not work.

The dirty little secret to the whole minmum wage deal is that most union wages are tied to the Minimum wage times some factor- so when the minimum wage goes up union wages go up automatically.

Quoting kcangel63: If you raise min wage from say $8 an hour to $15 an hour, all you're doing is giving those who make $15 an hour (before the min wage increase) a $7 an hour pay cut.

Those people who worked hard for their raises, or went to school and are starting off making $15 an hour are now punished. They are now equal to burger flippers.

Instead of trying to get people to strive to be better, and work their way up the ladder, they reward mediocracy.


Quoting Billiejeens:

 Didn't understand how that made any sense before when I read it, still don't.


Quoting kcangel63: As I said in another post...

I disagree with raising min wage. Instead of raising the min wage, why not just give all others a pay cut by the amount they would raise min wage? It's essentially the same thing.

Those making $10, those who worked hard at lower paying jobs and earned their raises. Those are the people hurt by raising min wage. They won't get a pay increase. They will have gone from making ok (not great, but decent) pay, to min wage. Their pay will not go up by the same amount those working fast food and entry level jobs did.

The cost of living, of food, of products will go up to compensate for the increase in wages. The companies aren't going to eat the loss. They will compensate by making prices higher and cutting jobs.

 

 

Analeigh2012
by Silver Member on Dec. 31, 2013 at 12:50 PM
3 moms liked this
DId you read that part of the article?
Said business is going to cut workers.
Then expand the business in order to bring those workers back.
That means there will be no new employees hired as a result of the expansion.
It results in loss of jobs, where the planned expansion should have meant job creation.

Companies are not responsible for paying employees enough to support their lifestyle. That is ridiculous. It is every person's responsibility to live their own lives however they choose. If that choice is to remain in a minimum wage job, never creating a career path, never getting more training or education to better their opportunity for higher pay - that is their choice.
Quoting Kate_Momof3:

 Did you see the first part of the article where the successful, innovative business owner is going to expand his business to create revenue that will pay for the wage increase?


Those are the businesses that should thrive.


The ones who are clearly incapable of restructuring their business models to adhere to the new standards are either bad business people or jerks who just don't want to pay because they have a grudge against the new policy.


We really need to stop lowering our expectations for pay. There is no reason whatsoever companies can't figure out how to offer their employees a LIVABLE wage. Doing that, however, means they have to redistribute the company's earnings. The most successful businesses I've seen have been great corporate neighbors who uplift communities with well-paying jobs, excellent benefits, and continued domestic manufacturing despite what the competition does.


Believe me, the guys on the top are multi-millionaires who live very nice lives (alongside happy employees who stay with them for decades).


Why must we continue to decrease expectation of employees while paying them more?
Posted on CafeMom Mobile
Kate_Momof3
by Platinum Member on Dec. 31, 2013 at 2:30 PM

I'm sorry to sound harsh, but if you are starting a business and can't afford the minimum wage, then you shouldn't be in business.

Free markets work like that.

A livable wage is what is going to strengthen the free market. More money in the pockets of workers, more money back into the community.

And don't for a minute believe that raising the minimum wage will benefit big corporations. They have been fighting tooth and nail to prevent this.

Quoting kcangel63: What about small businesses and family run businesses? What about those just starting up?

Dh and I run our own businesses. We were talking about starting up a restaurant, but there is no way we could start up and pay servers $15 an hour.

Thankfully, the ones we run are just dh, myself, and a couple of my girls working. Thankfully the state isn't trying to run our business into the ground. Not yet.

What this is doing is killing the 'mom and pop' businesses. It will help the big guys like Walmart. You know, the ones that have a majority of the money anyway.


Quoting Kate_Momof3:

 Did you see the first part of the article where the successful, innovative business owner is going to expand his business to create revenue that will pay for the wage increase?


Those are the businesses that should thrive.


The ones who are clearly incapable of restructuring their business models to adhere to the new standards are either bad business people or jerks who just don't want to pay because they have a grudge against the new policy.


We really need to stop lowering our expectations for pay. There is no reason whatsoever companies can't figure out how to offer their employees a LIVABLE wage. Doing that, however, means they have to redistribute the company's earnings. The most successful businesses I've seen have been great corporate neighbors who uplift communities with well-paying jobs, excellent benefits, and continued domestic manufacturing despite what the competition does.


Believe me, the guys on the top are multi-millionaires who live very nice lives (alongside happy employees who stay with them for decades).

 

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