Goldy

What a bunch of fucking hypocrites:

RIGHT now the Washington state Legislature is cringing like a student who turns in homework and knows that it is incomplete. An impatient state Supreme Court demanded a fully fleshed-out plan for financing K-12 education, on its desk, by April 30.

Last week, lawmakers handed in a report that says they couldn’t reach agreement this year. It explains what the Legislature has done so far, reminds the court of the role of the judiciary, and makes a promise: We’ll take it from here.

What the court ought to do is to take lawmakers at their word, recognize that the Legislature plays a role as important as its own, and let it get down to business.

That’s right, the same editorial board that urges legislators to hold students and teachers accountable through rigorous standardized testing and inflexible graduation requirements, advises the Washington State Supreme Court to back off from holding legislators accountable for failing to meet a court order to which they are clearly in contempt.

Personally, I’m not confident that there is anything the legislature can do anymore to head off this looming constitutional crisis. But encouraging the court to do nothing pretty much assures that it will be ignored. And that’s bullshit.

Also, there’s this:

For too long, they have shorted education in all its forms, and they have spent the state’s money where the special interests were the noisiest.

… Now that Washington’s economy is recovering, the Legislature should earmark the majority of its rebounding tax revenue for education. That won’t sit well with public-employee unions and other interests that would prefer to see a tax increase.

First, that was Rob McKenna’s gubernatorial platform. And he lost. So fuck you.

Second, if the editors at the Seattle Times have any idea as to where in the state budget legislators can find an extra $3 billion to $7 billion in unnecessary spending, they have a fucking daily newspaper editorial board page in which to enlighten us. But of course, they’ve got no ideas other than UNIONS! and SPECIAL INTERESTS! and useless dog whistles like that. So fuck you.

We’re talking about our constitutional “paramount duty” here, for chrissake! We need billions a year in new tax revenue to meet McCleary. Nothing else can do it. It’s simple math. And any advocacy against raising this revenue is advocacy against both the interests of our children and against the preservation of the rule of law.

I’d been meaning to comment on this Jonathan Martin post for quite some time, but got distracted by my non-Seattle-Times-bashing pursuits. Writing on the paper’s editorial board blog, Martin echoes a trope that has grown quite popular with minimum wage concern-trolls these days: that a $15 minimum wage would ironically hurt poor people, by making it too expensive to provide vital human services!

As Martin correctly points out, human services are largely provided by low-wage workers—some of them college educated social workers who make only $12 to $13 an hour themselves. A $15 minimum wage would indeed cost Seattle’s not-for-profit human services agencies millions of dollars a year in additional labor costs. So Martin defends these “abysmal” low wages as “just the financial reality of holding together the human services safety net.”

Responding on Facebook, millionaire minimum wage advocate Nick Hanauer aptly describes Martin’s reasoning as “silly”:

Building an economy that generates huge human services needs by impoverishing most people by underpaying them, and then builds infrastructure to do damage control [on what] this poverty creates by employing people at poverty wages to do it, is economically inefficient, socially ineffective, and morally dubious.

If the argument made by Martin is correct, that raising the minimum wage is bad for the city because then we will be able to pay for less human services, then by definition he must also believe that if the minimum wage went down it would be good for the city because then we would be able to pay for more human services.

“So let me get this right,” Hanauer asks rhetorically, “You guys at the Seattle Times think that the answer to our problems is to impoverish more people, so that you can employ ever more people dispensing services to [the] poor?”

Well justified sarcasm aside, Hanauer’s larger point is that poverty is inextricably linked with the social ills these human services agencies are there to address. If we reduce poverty, argues Hanauer, we will also reduce demand for some of these human services.

It’s compelling logic. But Martin is having none of it. “That is, at best, utopian thinking,” scoffs Martin. “At worst, it’s a fantastical theory that will put a vise on already struggling human services.”

You know, because!

In his defense, Martin is a journalist, so he has an understandable self-interest in maintaining social services he may soon have a need to utilize. Also, the Seattle Times editorial board just does something awful to people. (Anybody else notice a hint of Sméagol finally peeking through her Gollum exterior the further Joni Balter distances herself from the Ring of Power?) But to simply dismiss as “fantastical” the suggestion that higher wages might reduce demand for services aimed at the poor—well, that’s just plain lazy.

The smarter retort would have been to argue that what cost savings might be realized from reduced demand cannot materialize fast enough to offset nonprofits’ short term rise in labor costs, whatever the length of the minimum wage phase-in. But that would bring Martin dangerously close to addressing the human service agencies’ real problem: We don’t spend enough on them! We just don’t.

If we really value the services these government-funded agencies provide, then we should instruct our government to spend the money necessary to pay our social workers, childcare workers, addiction counselors, and other human service providers a living wage! We don’t need to abandon a $15 minimum wage in order to protect human services—the City of Seattle just needs to spend more money. Simple as that. And if the money isn’t there, raise taxes. We can start by taxing millionaires like Hanauer.

One can only get to Martin’s dystopian vision if one starts from the position that raising tax revenue is not an option. But it is.

Seattle is a wealthy city. And we will only become wealthier still once a $15 minimum wage starts recirculating billions of dollars in additional wages through our local economy rather than having it extracted out-of-state in the form of higher profits to low-wage national chains. Even at $15 an hour, minimum wage workers will spend almost everything they earn—spending that will bump up local sales tax collections as well as the prospects of local businesses. So if spending an additional $10 million to $15 million a year in taxpayer dollars is the price we have to pay to help human service nonprofits transition to a $15 minimum wage, it will be well worth the investment over time.

Sometimes you can throw money at a problem. And that’s all it takes to address the human services trope that minimum wage opponents are cynically pushing.

In a 5-4 decision, the United States Supreme Court ruled today that the practice of offering predominantly Christian prayers before the start of government meetings does not violate the establishment clause of the First Amendment. The press is describing the split on the bench as one between “conservatives” and “liberals.” But notably, it is also largely a split between Christians and Jews, with five of the six Christian justices joining the majority, and all three Jewish justices signing on to the dissent.

No doubt judicial philosophy had something to do with the split, but I’m not sure that the Christian members of the court fully appreciate the depth and scope of our nation’s inherent religious bigotry toward non-Christians. Or if they do, they just don’t give a shit.

“No one can fairly read the prayers from Greece’s town meetings as anything other than explicitly Christian — constantly and exclusively so,” Kagan said. “The prayers betray no understanding that the American community is today, as it long has been, a rich mosaic of religious faiths.”

The legal tussle began in 2007, following eight years of nothing but Christian prayers in the town of nearly 100,000 people outside Rochester. Susan Galloway and Linda Stephens, a Jew and an atheist, took the board to federal court and won by contending that its prayers – often spiced with references to Jesus, Christ and the Holy Spirit — aligned the town with one religion.

Once the legal battle was joined, town officials canvassed widely for volunteer prayer-givers and added a Jewish layman, a Wiccan priestess and a member of the Baha’i faith to the mix. Stephens, meanwhile, awoke one morning to find her mailbox on top of her car, and part of a fire hydrant turned up in her swimming pool.

And no. No kid has ever had the shit beaten out of him for refusing to participate in a Christian prayer.

Perhaps if our court’s papist majority had a firmer grasp on the history of religious intolerance in America, they’d have greater appreciation for the often uncomfortable experience of our nation’s religious minorities.

Leviticus 24:16
And he that blasphemeth the name of the LORD, he shall surely be put to death, and all the congregation shall certainly stone him: as well the stranger, as he that is born in the land, when he blasphemeth the name of the Lord, shall be put to death.

Discuss, God damn it.

Thanks to a link yesterday from our good friend Atrios, HA experienced its first sustained peak traffic surge since switching servers about a month ago. Longtime regulars know that HA’s server had a ton of performance issues over the past couple years, coughing up 508 errors at even the slightest bump in traffic. But yesterday we handled hundreds of simultaneous users with hardly a hiccup.

What changed? After way too much procrastination I finally moved HA from the iffy shared hosting account it had called home since November, 2002 to a spiffy new “droplet” at cloud hosting company DigitalOcean.* In the process, I traded limited server resources and a $30/month bill for 1GB of RAM and a dedicated processor core at only $10/month, plus an additional $2/month for automated backups. Such a bargain!

So why didn’t I do this sooner? I had played with VPS hosting in the past for other projects, but I’m not a server administrator and didn’t want to develop the level of expertise necessary to run a secure and reliable site. DigitalOcean offers nifty one-click distros for setting up popular Linux packages, but is otherwise unmanaged. So I was leaning toward a much more expensive managed VPS solution.

And then I discovered ServerPilot, a remote automated server management, monitoring, and control panel service that configures your firewall and handles all software and security updates for you. Just spin up a DigitalOcean droplet with a basic Ubuntu installation, SSH in to copy over ServerPilot’s install program, follow a few clear instructions, and minutes later you’ll have a modern, secure, and very fast Nginx, Apache, PHP, and MySQL stack ready to go.

ServerPilot’s basic firewall and security update service is free, with real-time stats, log monitoring, email notifications, and more offered in monthly subscription packages ranging from $10 to $199 a month. As an unpaid blogger, I love free. (FYI, I also moved my horsesass.org mail domain to a free account on Zoho—setup is clunky, but once you get it working it works great.)

Together, this DigitalOcean/ServerPilot combo offers many of the advantages of a managed VPS at a fraction of the price. It’s not for newbies. But trust me, I’m no Linux command line jockey. If you understand this post you probably have enough expertise to spin up a fast and secure server in minutes.

* (Yes, this DigitalOcean link includes a referral code that nets me a $10 credit if you sign up. But I wouldn’t plug it if I wasn’t pleased with the service.)

 

It’s tough running a small business.

Your rent goes up, but what can you do? So you muddle on. Fuel costs go up, but you muddle on. The cost of supplies goes up—food, inventory, whatever—and you muddle on. The cost of borrowing goes up, and you muddle on. Health insurance premiums go up (oh man do they ever), and you muddle on.

But lawmakers talk about raising the minimum wage, and you throw up your arms and threaten to close your doors.

So what makes the cost of labor different from all those other fluctuating costs business owners must deal with every day? Labor is the only cost of business where you set the price.

And that’s where I think a lot of this emotional response to the minimum wage comes from. It’s about control. Both controlling one’s costs and controlling one’s employees. A government mandated minimum wage upsets the traditional power relationship between management and labor. And understand: for many small business owners, that’s the only power relationship in which they currently hold the advantage.

Like I said, it’s tough running a small business. I know. You put so much equity into your business—both sweat and monetary—and yet it feels like so much of what determines success or failure is beyond your control. The economy. The competition. Consumer tastes. Disruptive technologies. Taxes and regulations. Hell, even the weather. And now the City of Seattle is going to tell you how much to pay your workers? Folks who’ve never owned a business—who’ve never hired and fired—may not understand it, but the experience often comes with a profound sense of a lack of control.

I get it. And I’m not dismissing the very real financial challenge that a $15 minimum wage would pose to some businesses. But my advice to small business owners in general is to acknowledge that at least some of your negative response to this proposal is emotional, and to trust that like most of the other challenges you face on an everyday basis, you will ultimately find a way to muddle on. In fact, experience from previous substantial minimum wage hikes tells us that that’s what most small businesses manage to do. Because as much as it doesn’t feel like it, you actually have a lot more control over the success or failure of your business than simply the power to dictate wages.

Okay, so I’ve finally had a chance to wrap my mind around Mayor Ed Murray’s minimum wage proposal, and found it to be both a little bit better and a tiny bit worse than it first appeared. The good news is that it would indeed get all workers to a $15 minimum wage in 2017 dollars—that’s about 50 cents an hour less than the wage would have been had we bumped it up to $15 now on January 1, 2015. The bad news is that some workers won’t reach this real-dollar-equivalent wage until 2025—a ten year phase-in, not the seven-year phase-in that has been touted.

Also good news is that the employee count for “big” businesses—defined as greater than 500 FTEs—refers to the number of employees nationally, not locally, and lumps franchise employees together with those at other franchises throughout a national chain. That’s great news for fast food workers for example, most of whom receive no tips or benefits, and thus would be phased in under Schedule A: $11 an hour in 2015, $13 an hour in 2016, and $15 an hour in 2017, inflation indexed after that. “The people who had the courage to walk out on strike got a pretty good deal,” SEIU 775 president and committee co-chair David Rolf told me by phone, referring to last year’s fast food strikes.

And if everybody was getting that deal, I’d be thrilled. But they’re not.

Big business employees who receive health care benefits (Schedule B) wouldn’t reach an equivalent wage until 2019. Workers at “small” businesses (defined as 500 or fewer FTEs) who receive no health care benefits or tips (Schedule C) wouldn’t reach an equivalent wage until 2021. And small business employees who receive tips and/or health benefits (Schedule D) would not reach that inflation-adjusted 2017-era $15 minimum wage until 2025, a full decade after the proposed ordinance first goes into effect.

The mayor’s office has provided a nifty table detailing the full 10-year phase-in for all four schedules. But it’s kind of misleading. The way it works is that the straight-up hourly wage to which all four schedules eventually merge is based on Schedule A’s $15 an hour wage in 2017, adjusted annually for inflation. But the annual increases under Schedule A all presume a 2.4 percent annual inflation rate—substantially higher than most experts are predicting. Inflation has held steady at about 1.5 percent these past couple years, while the Federal Reserve Bank of Cleveland just two weeks ago forecast a 10-year average CPI of 1.87 percent. The proposal’s 2.4 percent estimate may be closer to the historical average but it is totally divorced from our current economic reality.

I’m not a gambling man, but I’d wager that this proposal would bring Seattle’s minimum wage closer to $17 in 2025 than it would to $18.13. So don’t take the numbers between the highlighted rows too seriously. They’re just estimates. Overly optimistic estimates.

The important numbers are $15 in 2017 dollars (about $14.50 in 2015 dollars) and the year in which the figure in each column first matches that in Column A: 2017, 2019, 2021, and 2025 respectively. That is what is meaningful to workers in terms of their inflation-adjusted take-home pay.

As for the meaning of Schedules C and D, well, it depends on how you choose to look at it. Schedule D is the absolute minimum wage a small business may pay its workers (again, estimated from 2022 on) as the state currently defines wage. But Schedule C is the minimum total compensation a small business employee must receive, including wages, tips, and health benefits.

A charitable spin on minimum compensation uses Schedule D as the baseline, and views Schedule C as guaranteeing that small business workers receive total compensation a little above that guaranteed in the base minimum wage. A negative spin on minimum compensation uses Schedule C as the baseline, and views the difference between the two columns in any given year as an unwarranted deduction the employer gets to take against his minimum wage obligation. It’s like that classic optical illusion: Is it a vase or is it two faces?

So that’s what the mayor’s compromise proposal does. Many, many workers—those who earn no benefits working at big businesses—would reach $15 an hour by 2017, and receive cost-of-living increases thereafter. The remaining workers will be phased in to an inflation adjusted equivalent minimum wage by 2019, 2021, and 2025 respectively. Once this 10-year phase in is complete there would be no tip penalty and no benefit deductions.

Tomorrow I’ll consider the political ramifications, and whether they conspire to make this 10-year phase-in a good enough deal.

I haven’t seen the details but it sure sounds like the minimum wage proposal Mayor Ed Murray is sending to the Seattle City Council is much along the lines of the crappy one leaked late last week: $15 in three years for large businesses (more than 500 employees), four years for those that provide health care benefits. But small businesses don’t get to $15 for seven years, with some sort of five-year total compensation scheme on top! And the minimum wage isn’t indexed to inflation until $15 is reached.

To be clear: $15 seven years from now is actually only $13.25 in today’s dollars.

Is that a helluva lot better than today’s $9.32 an hour Washington State minimum wage? Sure. Is it $15 an hour? No. It’s just not. So if Ed and his cohorts want to celebrate getting us to a $13.25 minimum wage over seven years, have at it. But don’t call it $15. Because it’s not.

All that said, I’m just watching the Seattle Channel live stream. The proposal may appear better or worse, once I read the details. More later.

UPDATE: So, I’ve finally had a chance to take a look at the mayor’s press release (I couldn’t make it to the conference) with it’s complicated four-tier schedule, and something leapt out at me right a way. Take a look for yourself. Catch the anomaly?

An estimated 2.40 percent CPI? Really? That seems overly optimistic (depending on your view of inflation). I’ve been using a relatively conservative 1.75 percent CPI estimate in all my calculations, and even that overestimates inflation by today’s standards. The Federal Reserve has a 2 percent target, but we’ve been holding steady at about 1.5 percent inflation the past couple years. The Federal Reserve Bank of Cleveland recently forecast a 1.87 percent 10-year average CPI. So estimating 2.4 percent strikes me as an exercise in massaging the numbers in order to present a more worker-friendly 10-year outcome.

In case you’re wondering, Schedule A is for big businesses that don’t provide benefits, Schedule B is for big businesses that do provide benefits, while Schedules C & D are for small businesses (less than 500 employees). Haven’t quite wrapped my mind around how the total compensation works. More on that later.

But the gist is, to get to $18.13 in 2025, you have to estimate average annual inflation rates of 2.4 percent starting in 2018. That’s a huge assumption. At today’s 1.5 percent rate, we’d only get to $16.90 by 2025. That’s a big difference.

I’ll have a more thorough analysis later, from both a policy and political perspective. But at first glance, I can’t help but feel a tad disappointed.

Allegedly at 10:30 am. But then that’s what he said last time he called a press conference. So we’ll see.

Don’t expect I’ll be pleased.

UPDATE: Just a reminder: this is a P R O P O S A L. The council makes the final decision, which means the negotiating is not done. So don’t expect all parties to just abandon their bargaining positions, whatever they might ultimately accept from an ordinance.

Because they can:

A proposal to raise the federal minimum wage to $10.10, an underpinning of President Obama’s economic agenda and an issue that Democrats hope to leverage against Republicans in the midterm elections, failed in the Senate on Wednesday.

The vote was 54 to 42, with 60 votes needed to advance the measure.

All but one Republican voted to sustain a filibuster against the measure, saying that the increase would damage the fragile economy and force businesses to cut hundreds of thousands of jobs.

Democrats were mostly united behind the bill.

Think about that. Republicans bothered to filibuster a bill that would raise the federal minimum wage from $7.25 an hour to just $10.10 an hour—despite the fact that this bill was almost certainly never would have reached the floor in the Republican controlled House. That’s how much Republicans are opposed to raising the incomes of working people.

There is class warfare being waged in our nation, and Republicans are not on the side of the vast majority of Americans.

No doubt there are some actual Dems who are actually disappointed at the way Kirkland mayor Joan McBride was shoved aside in the 48th Legislative District state senate race in order to make room for incumbent Democratic state Representative Cyrus Habib. McBride had gotten into the race early against turncoat incumbent state Senator Rodney Tom, but once Tom dropped out, she and Habib quickly switched races. It’s a smart political move given that the seat could determine control of the senate, but I certainly empathize with McBride or her supporters if they feel like she got the short end of the stick.

That said, the concern-trolling coming from the Washington State Republican Party is hilarious!

Democrat Kirkland Mayor Joan McBride has been running for the State Senate in the 48th legislative district for months. However, Representative Cyrus Habib has now pounced on a perceived opportunity, seeking to throw yet another woman Democrat under the bus. Habib, taking the easy way out, avoided running against Rodney Tom, but now that Tom has announced he will not seek reelection Habib wants McBride to step aside so that a more high-profile candidate (such as himself) can seek the seat. He promised he would have “a number of conversations” with party leaders. The goal seems clear: push the woman Democrat to the curb and tell her to support a male Democrat who wants to advance his personal political career.

That’s a, um, hysterical line of attack coming from state GOP chair Susan Hutchison after she made such a big stink about her party paying her less than her male predecessor. “The pay cut defies the concept of equal pay for equal work, playing into the ‘war on women’ narrative against Republicans,” Hutchison lamented at the time. But this recent I’m-rubber-you’re-glue press release is more than just ironic; it’s also an entirely calculated response intended to blunt criticism of the GOP’s anti-women policies, by, you know, accusing Democrats of hating women too!

“You know, it confuses the voters so much when both sides are accusing each other,” Hutchison told fellow GOPers January 25 at the Mainstream Republicans annual Roanoke Conference, “that you just say ‘okay, it’s a wash.’ Both anti-women.”

Ha, ha! Voters are sooooo stoopid, says Hutchison! (Okay. Maybe. But I’m not a state party chair, so I can say it.)

But Hutchison’s war on the War on Women doesn’t end there. In addition to advising Republicans to accuse Democrats of hating women, Hutchison also has some advice specifically for male candidates: “Please don’t mention the word ‘rape’ in any way,” Hutchison sagely advises. “Also, let’s not talk about anything to do with women’s reproductive cycles or um, um, women’s sexuality,” continues Hutchison before state Representative Liz Pike (R-Camas) helpfully adds in: “Don’t talk about things in the bedroom or the doctor’s office.” Because letting women know that Republicans want to control their sexuality makes it harder to win women’s votes, I suppose.

Instead, if the topic comes up, just change the subject. “Talk about the Seahawks,” suggests Hutchison.

Really:

A moment later, just beyond the end of the audio above, Hutchison goes on to amazingly describe former Republican presidential candidate Mike Huckabee as “a victim of the war on women.”

That she even has to tell male candidates not mention the word “rape” tells you everything you need to know about a Republican Party whose policies are profoundly anti-woman. But it’s not just talk, it’s action. Hutchison’s party opposes choice—both when it comes to abortion and birth control. Republicans overwhelmingly opposed the Violence Against Women Act. They even opposed the Lilly Ledbetter Fair Pay Act, an irony apparently lost on Hutchison in her own struggle for equal pay.

The truth is, Democrats effectively brand Republicans as being anti-women because Republican policies are anti-women. The embarrassing “rape” talk only make it easier. So if Hutchison really wants to change that perception, perhaps she should advise the men in her party to change the party platform?

It is important to remember that none of this would have been necessary had Olympia not cowardly reimposed I-747 after Tim Eyman’s fiscally irresponsible tax-limiting initiative had been ruled unconstitutional:

Over the objections of some advocates, the Seattle City Council on Monday unanimously approved forwarding to the August ballot the creation of a Seattle Parks District to provide a new and permanent source of funding for the city’s parks and recreation programs.

Seriously. How is it that our local daily continues to cover this story without covering the context?

Also, you know how some of the establishment folk continue to roll their eyes at Kshama Sawant for being some sort of ridiculous one-and-done accidental council member, inflexibly incapable of pragmatic compromise?

City Councilmember Kshama Sawant said she agreed that additional property taxes placed a burden on middle-income residents when the “superwealthy and big business” should be paying a larger share.

But she said the city had limited taxing authority and that low-income residents and those on fixed-incomes are some of the heaviest users of parks and community centers.

“Sometimes, these are the only services they have access to. It’s important that we’re doing this as a council.”

That’s crazy talk! Amiright?

There is a lot to hate about the minimum wage proposals leaking out of the mayor’s Income Inequality Advisory Committee, not the least of which being that they are fundamentally dishonest. A $15 an hour minimum wage that takes up to seven years to phase in for some workers before annual cost of living adjustments (COLAs) kick in, is not $15 an hour—it’ll be about $13.25 in 2014 dollars. So let’s not pat ourselves on the backs for doing something we’re not doing.

But the compromise under discussion is also overly complicated, reportedly requiring four different phase-in schedules depending on the size of the business and whether or not the employee earns tips or health care benefits. That’s just crazy. It will be difficult to implement, difficult to comply with, and difficult to enforce. It creates an economic incentive for businesses at or near the full-time equivalent employee (FTE) threshold to reduce employment (or just plain lie about it) in order to qualify for a more favorable schedule. And imagine the regulatory complexity for dealing with businesses that straddle the FTE threshold (some months more, some months less) and that hire both part-time and full-time tipped and untipped workers!

Also, the math doesn’t work! If $15 is phased in over four different schedules before COLAs kick in—three, four, five, and seven years respectively—either we’ll end up with four different minimum wages, or those workers phased in after three years won’t get a raise for another five years: one year after workers on the seven-year schedule are phased in.

Fortunately, there is a simpler way to achieve similar results without all the mess: Math!

First, we phase in a $15 minimum wage over a single two- or three- year schedule—say, $11 in 2015, $13 in 2016, $15 in 2017—adjusted for inflation thereafter. That in itself would represent a huge concession, one which would have had me booed off the stage at Saturday’s $15 Now conference. But most minimum wage hikes are phased in over two years, and this one is bigger than most, so that is a rhetorical and political fight that I don’t want to get sidetracked by in this post.

Second we give employers a deduction against tips and the cost of providing health benefits, phased out over several  years, and inversely proportional to the employer’s current number of FTEs. This may sound complicated, but the math is actually quite straight forward:

Max_Deduction = (City_Min – State_Min) * (((Years + 1) – year) / Years) * ((FTE_Cap – FTEs) / FTE_Cap)

The starting point for the maximum deduction is always the difference between Seattle’s minimum wage and the effective minimum wage under state and federal law, currently the state minimum wage of $9.32 an hour, indexed to inflation: (City_Min – State_Min). Then we adjust for the deduction phase-out. For example, in the first year of a five-year phase out, 100 percent of this deduction would be available, in the second year 80 percent of the deduction, in the third year 60 percent, and so on: (((Years + 1) – year) / Years). Finally, the maximum deduction available to each employer is further reduced by the employer’s total number of FTEs as a percentage of a defined FTE cap. For example, if the ordinance defines the FTE cap at 1,000 (the number of FTEs at which companies no longer qualify to take any deduction), and a business employs 100 FTEs, then that business could claim up to 90 percent of that year’s available deduction: ((FTE_Cap – FTEs) / FTE_Cap).

How might this work in reality. Well, presuming the three-year $15 phase-in described above, a five-year tip and health benefit deduction phase-out, an FTE cap of 500, and a conservative 1.75 percent annual inflation rate, Seattle’s minimum wage for various sized businesses would phase in as follows:

Year	Base Min.	10 FTEs	100 FTEs	250 FTES
2015	$11.00	$9.51	$9.79	$10.24
2016	$13.00	$10.37	$10.86	$11.66
2017	$15.00	$11.95	$12.51	$13.45
2018	$15.26	$13.20	$13.58	$14.21
2019	$15.53	$14.48	$14.67	$14.99
2020	$15.80	$15.80	$15.80	$15.80

You can adjust the FTE cap or the length of the phase-out, or inflation-adjust the three-year phase-in, but a similar pattern emerges: smaller businesses essentially phase in to the full Seattle minimum wage a lot more gradually than large businesses.

It is important to note that all businesses at or above the FTE cap will pay the base Seattle minimum wage in column two. Likewise, non-tipped non-benefit employees will also receive the base Seattle minimum wage. Further, an employer’s deduction against his minimum wage obligation can never exceed the amount the employee receives in tips and health benefits. For example, if a 10 FTE employer only paid the equivalent of $2.00 an hour in health benefits during 2017, he must pay non-tipped employees an effective $13.00 minimum wage, not the lower $11.95 rate that would otherwise be available.

This formula-based phase-out has huge advantages over the fixed schedules the advisory committee is considering. First, it doesn’t attempt to address the needs of five-employee businesses and 500-employee businesses in one broad stroke—deductions are targeted along a finely calibrated continuum. Second it avoids an arbitrary definition of a “small” business that might incentivize employers to limit their number of FTEs in order to stay on one side of a threshold. And finally, it acknowledges that FTEs rise and fall over time due to seasonal and other reasons; during any pay period the employer need merely go to a city website and plug in his current number of FTEs in order to calculate his current maximum deduction. Easy.

As for not-for-profits, we might remove the FTE adjustment altogether, giving them the opportunity to take the maximum benefit deduction available in any given year.

I make this proposal reluctantly, as I do not accept the economic (or moral) necessity of constructing such a prolonged phase-in. But if this is the direction the committee and the council are going, an FTE-adjusted deduction phase-out is a much more rational, flexible, and targeted approach. City council members would do well to consider the regulatory nightmare a four-schedule minimum wage could create, and then steer well clear of it.

But mostly I offer this proposal in the interest of refining and focusing the debate. All sides agree that smaller businesses and not-for-profits need to phase-in more slowly than large businesses. Even the 15Now.org charter amendment embodies that principal. Achieving this objective through an FTE-adjusted phase-out allows us to focus on defining the variables in the formula—the number of years and the size of the FTE cap—rather than rehashing the same old political arguments. And by eliminating the necessity to define “small business” by an arbitrarily abrupt FTE threshold, we eliminate some of the political pressure to raise that all-or-nothing threshold in order to satisfy one or more special interests.

To be clear, I would never advise 15Now.org to put such a compromise on the ballot. But if the city council were to adopt a minimum wage along the lines of what I’ve described above, I could in good conscience advise them to drop their objections, and move on to the next item on their agenda.

Now, I’m not suggesting that all restaurateurs are crooks, anymore than I’m suggesting that all Republicans are. But, you know…

Representative Michael G. Grimm, a second-term congressman from Staten Island, was indicted Monday on federal fraud charges for underreporting the wages and payroll while running an Upper East Side restaurant, concealing the actual payroll in a separate set of computer records.

The charges, unsealed Monday, detail how Mr. Grimm concealed more than $1 million in gross receipts for the restaurant, and hundreds of thousands of dollars in employee wages, thus getting around federal and New York State law. He also lied under oath in January 2013, while he was a member of Congress, during a deposition, the indictment says.

The indictment charges Mr. Grimm with, among other things, perjury, wire fraud, mail fraud, obstruction of justice, employment of illegal immigrants, obstructing and impeding tax laws, and conspiracy to defraud the United States.

[…] The concealment, perjury and obstruction of justice charges come in connection with a January 2013 deposition given by Mr. Grimm as part of a lawsuit by two former Healthalicious employees who alleged that Mr. Grimm was not paying them minimum wage or overtime.

Grimm is more than just a congressman, actually. He’s also a former US Marine and FBI agent. So “Semper Fidelus” and “Fidelity, Bravery, Integrity,” and all that. (Not sure what the motto of the restaurant industry is, but I doubt it emphasizes fidelity in any language.)

The point is,* if we build a minimum wage law that not only facilitates wage and tip theft, but incentivizes it, then some businesses owners will surely exploit it to cheat their workers.

* (Also, given the prevalence of accounting shenanigans, I don’t trust restaurateurs pleas of poverty. I just don’t.)

Genesis 6:4
There were giants in the earth in those days; and also after that, when the sons of God came in unto the daughters of men, and they bare children to them, the same became mighty men which were of old, men of renown.

Discuss.