My first job was at a family-run Chinese restaurant. I started as a hostess and made minimum wage, then was promoted to the wait staff and added tips to my compensation. And because I was a teenager living at home, I didn’t pay rent or have a family to provide for. To do either of those now while living in Seattle and earning the minimum wage would be challenging (an understatement). However, if that family needed to pay me almost 50-percent more overnight, they would go out of business, and I’d be out of a job.
The issue of minimum wage is about equality, not economics. And though I haven’t made up my mind as to what is the best way is to address the topic, I know that making the minimum wage $15/hour today (which 68-percent of Seattle voters support according to a poll compiled by Working Washington, UFCW 21, Nick Hanauer, SEIU Healthcare 1199NW, the Teamsters, and the MLK County Labor Council) isn’t a complete solution. Added to that, an overnight change would have negative repercussions on small business owners, the people who they employee, and the communities that they support.
Big corporations can afford a quick change, small business and non-profits often can’t. So, what should be done? Most agree that the minimum wage needs to increase, but there are differing views as to how and when that should happen. And while employees are vocal in supporting the 15Now campaign, many small businesses and non-profits worry that a fast transition will cause them to close.
When some members of the Broadway Business Association sent a letter to the mayor opposing a $15 minimum wage, those supporting the increase called them greedy. But wanting to survive and keep the employees of these companies, well, employed isn’t the same thing as aiming to profit from cheap labor. There needs to be a distinction between the two. On Broadway, the owners of Subway sandwiches and Cintli Latin Folklore aren’t making the same margin of profit.
Among small businesses and non-profits there are a lot of distinctions. The number of employees range from one to 500. Some have employees who earn tips, others don’t. When the minimum wage is raised, some will be able to raise the prices of their products to make up part of the cost, some vend fixed-price products. It’s Cupcake Royal. It’s Samadhi Yoga. It’s Paris Eastside. It’s Broadway Shoe Repair. It’s Blindfold Gallery. It’s Artist Trust. It’s Graham Baba Architects. It’s what makes Capitol Hill inviting and diverse.
And many of these small businesses and non-profits’ employees are already compensated above the minimum wage in the form of salary, tips, commission, health care, 401K, education, and so on. One of my friends works for a “small business” downtown, makes $15/hour, and her company also pays for her bus fare and gym membership. And to stay on par when the minimum wage is raised, those low-wage earners will also require more compensation.
To keep small businesses and non-profits in business without layoffs or inflation, when the minimum wage increases, there are a few things that the city can offer these companies, some okay, others good.
Phasing is one idea. Instead of demanding that the minimum wage increase to $15 right now, no exceptions, giving all companies or just small businesses and non-profits the option of moving in that direction over a number of years might help.
Another idea is that total compensation be considered when determining an employee’s pay. For example, a restaurant worker, barista, or bartender who is paid minimum wage but earn tips each shift makes a larger income than fast food employees who don’t.
What if these extra verifiable benefits were factored into an employee’s pay? I agree with Councilmember Kshama Sawant that a living wage should be guaranteed, so how about this: what if all employees are guaranteed a base wage of $15/hour, but that total compensation be part of that – not exactly a tip credit, but where the tip went towards $15/hour, and anything beyond that is kept as surplus; and if tips didn’t reach the $15/hour, than the employer would make up the difference. Just an idea.
15Now is rejects the idea, calling it “stealing tips.” But tips can’t be stolen. Besides, today, tipping is more often the result of cultural compulsion than good service. (I prefer to compensate workers with a living wage and benefits like health care, and eliminate America’s tipping system all together, but that’s not going to happen.)
Yet another idea would be offering small businesses and non-profits tax exemptions. Or, in a Tweet, Councilmember Sawant suggested that big businesses be taxed to support small businesses and non-profits. The Capitol Hill Chamber of Commerce asked her how that would play out, to which she replied that details could be discussed if they called her office.
In addition to discussions amongst Seattle City Councilmembers regarding the minimum wage, Mayor Ed Murray created a task force that is currently analyzing the issue, and will approach him with a recommendation by the end of April. Mayor Murray stated that he prefers the issue be resolved now instead of it going to an initiative on the fall ballot, which he thinks would be a waste of time and resources.
The fight for a fair minimum wage is portrayed as a battle between wealthy corporations like McDonalds and Walmart, and their employees. Ignoring the businesses, non-profits, and the employees in the middle isn’t in Seattle’s favor.