Goldy

At yesterday’s no-news conference, Mayor Ed Murray refused to release details on the minimum wage compromise on which he says his advisory committee has almost but not quite reached consensus. So in the absence of facts, I’m just going to have to go with some of the rumors leaking from committee members and their posses—the most disturbing of which is a proposed phase-in of as long as seven years for some businesses… not adjusted for inflation. (The inflation index wouldn’t kick in until after the seven-year phase-in was complete.)

So, let’s see, if you phase in a $15 minimum wage over seven years, starting in 2015, and conservatively presume an average annual inflation rate of 1.75 percent, that means that the 2022 Seattle minimum wage of $15 an hour is really only worth about $13.25 an hour in current dollars. Give or take.

Don’t get me wrong: $13.25 an hour is not nothing. It’s damn well better than today’s state minimum wage of $9.32 an hour. But $13.25 is not $15. By that math, we already have a $15 minimum wage—in 1993 dollars. So please don’t call it a $15 an hour minimum wage.

I don’t know where my friends at 15Now.org stand on this, but personally, I could accept a two or three year phase-in to the number 15, if not the actual value, depending on the totality of the package. But five to seven years, not inflation-adjusted, like I’m hearing, that’s just ridiculous.

So if that’s part of your proposal Ed, no patting yourself on the back for negotiating a compromise that gets us to a $15 minimum wage. Because you didn’t.

I’m not surprised that King County Metro’s Proposition 1 failed at the polls during a special election, but like most other observers I am surprised that it failed by such a wide margin. Late ballots have softened the blow somewhat, but there aren’t many late ballots remaining. When the final vote is tallied, Prop 1 will have failed by about eight points.

By modern American standards, eight points is almost a landslide.

So the question remains: had the county gone to the ballot with the more progressive Motor Vehicle Excise Tax (MVET) we requested from the legislature (a 1.5 percent tax on the value of your car), would voters have approved that at Tuesday’s election? And I think the answer would likely have been a resounding “No.”

Editorial board opponents had touted the regressive nature of Prop 1’s car tab/sales tax combo, but of course that was disingenuous. All our taxes are regressive, and there’s no support from the Blethenites to fix that. The truth is, any Metro funding solution that didn’t involve busting the bus drivers union would have earned a “no” endorsement from the Seattle Times.

Not that there wasn’t a sizable contingent of “no” voters on the left who failed to weigh the regressive nature of bus cuts versus the shitty reality of the tax authority we have. But I just don’t believe that’s a large enough swing vote to overcome an eight point margin. The fact is, most voters just aren’t going to distinguish between an MVET and a VLF (Vehicle License Fee)—they are both taxes that you pay when you renew your car tabs.

King County voters voted against raising taxes on their cars. Period. By eight fucking points. So it would be a mistake to read too much nuance into Tuesday’s results in order to presume that an MVET would have fared much better.

That’s why, unless the legislature is prepared to give King County councilmanic authority to levy an MVET without the approval voters—and the legislature most certainly is not—I believe Olympia’s failure to act is probably now moot. We can’t pass an MVET in a special election, and maybe not in an off-year general election either. Perhaps in 2016, during a high-turnout presidential election, but even that wouldn’t be a sure thing. In the meanwhile, systemwide Metro cuts are now unavoidable.

Politically, that means two things. First, Seattle must act on its own to save our in-city bus service from the cutting room floor. We can do that. Prop 1 passed handedly in Seattle precincts. And we have plenty of funding options.

Second, our county’s legislative delegation must wrap its collective mind around the fact that an otherwise crappy state transportation funding package is no longer a price worth paying in return for Metro MVET authority. The hostage has died. So don’t make major concessions elsewhere in return for a non-councilmanic MVET authority we likely can’t use.

Elections have consequences, and most of Tuesday’s consequences are bad. But let’s not compound them by pretending they didn’t happen.

Seattle Mayor Ed Murray packed a conference room at city hall this afternoon to announce that he has no minimum wage proposal. At least not yet. Oh well.

Murray did outline several main points. If he had made a proposal it would phase in to $15 (eventually), indexed to inflation (eventually), with a slower phase-in for small businesses, however “small” is ultimately defined. There would be no “exemptions” we’re told, but there would be a phased out deduction for the cost of providing some benefits. And maybe a tip credit. That’s still under discussion.

I don’t mean to come off as snarky here. This isn’t easy. But he’s pretty much talking about all the things we’ve all been talking about, but without providing much specificity.

So, yeah. No news, really.

Is hipster oligarch David Meinert saying yes?

We’ll know the details at 3 pm. Headed to the press conference now.

(You know, in case you missed it.)

Don’t really know why anybody should be surprised that Mayor Ed Murray’s Income Inequality Advisory Committee would “fail to reach a consensus” on raising Seattle’s minimum wage to $15 an hour. Murray filled the room with business owners and low-wage worker advocates. If there was an easy consensus to reach between these two camps, government coercion wouldn’t be necessary. And let’s be clear: a minimum wage is government coercion.

It was worth trying. And the conversation was worth having. But consensus never seemed a likely outcome.

And so Murray will pick and choose from the committee’s ideas and put forth his own proposal today. And then the folks who really get to write the ordinance—the city council—will get to work.

UPDATE: The mayor’s 1:15 pm press conference has been bumped to 3 pm. Is he hoping to achieve “consensus” after all?

A day later it’s above the fold in the paper of record, but remember: you read it here, first.

Well, actually, you read it here, first, way back in December of last year. But it was still me getting out ahead of the curve on a crucial issue:

City officials have been quietly exploring options to “buy back” in-city Metro bus service cuts in the event that all other options fail.

Seattle has unused Transportation Benefit District authority of its own (sales tax and car tab fee) that could yield up to $51 million in new revenue a year if approved by a simple majority of Seattle voters. Officials are also exploring a $25 million property tax levy “lid lift” that would also require a simple majority at the polls. Meanwhile, there’s another $50 million in new revenue available to the council without voter approval, via a hike in the city’s commercial parking tax, and a reinstatement of the controversial head tax, a per-employee tax on city businesses.

Those are the options that are on the table. Personally, I prefer the head tax/commercial parking tax option, as all it takes is the political balls to implement it. But I’m happy to see any proposal for buying back Metro cuts get the above-the-fold attention it deserves, as this will help push city decision makers to, you know, make a decision.

Alaska Airlines joined the Seattle International Film Festival this year to sponsor SIFF’s “Explore. Dream. Discover. Film” competition:

Competition Rules
The title of your film must respond to the question: how is your life different or better because of where you have traveled?

Your film must include an Alaska Airlines element. These can include, but are not limited to the following:

· Competition title card (download here) must appear at the beginning of your film
· Our mobile app or mobile website
· Footage of alaskaair.com
· Airport footage including Alaska Airline branding and aircraft shots
· Existing Alaska Airlines advertising in market (if applicable) such as Billboards, print, etc.

Feel free to be creative. You might even come up with something that we didn’t even think of.

Something creative they didn’t think of? You mean something like this?

Oops.

When the book is written on the fight for a $15 minimum wage, a lot of the credit for the movement’s success will have to go to Alaska Airlines for their belligerent abuse of their own airport workers at Sea-Tac. It was Alaska’s refusal to come to the table that prompted the SeaTac initiative, and it was the passage of the SeaTac initiative that helped pave the way for $15 here in Seattle and beyond.

Explore. Dream. Discover. Thanks, Alaska Airlines!

It’s not like I write in a vacuum. So when I posted this morning that we should pursue Plan C, and buy back Metro bus service cuts within Seattle, it’s not like I didn’t know that transit advocates had been discussing exactly such an option. But I had no idea that they were prepared to move this quickly:

SEATTLE — Friends of Transit today announced it will file an initiative for the November 2014 ballot that would save bus service within Seattle city limits. The measure could raise up to $25 million a year for the next six years, enough to reverse most cuts to King County Metro routes that serve Seattle.

… The proposed initiative would increase the city’s property tax by $0.22 per $1,000 of assessed value between 2015 and 2021. The measure is estimated to generate $25 million a year in revenue, enough to fund as much as 250,000 hours of bus service. This funding would help stave off cuts to routes operating completely within Seattle, and may help reduce cuts to routes operating between Seattle and other cities. The property tax increase requires a simple majority vote for approval.

I suppose a property tax makes as much sense as a car tab, though at $0.22 per $1,000—$88 a year on a $400,000 home—it will personally cost me a tad more than Prop 1. Either way, I’m all for the city pursuing self-sufficiency in the face of inadequate revenue at the county and state level.

Friends of Transit has a content-free website at the moment, but with endlessly energetic transit advocate Ben Schiendelman behind it, I’m sure that will be remedied in a heartbeat.

After its sales tax revenues fell off the edge of the Earth in the wake of the Great Recession, the plan to save Metro bus service from devastating cuts was pretty simple: we needed to move back to a stable, sufficient, and progressive Motor Vehicle Excise Tax (MVET)—a tax on the value of your car. But to do this, we needed permission from Olympia, and legislators insisted that they would only grant the county that authority after implementing money saving reforms.

That was Plan A: reform Metro’s practices and levy an MVET.

And so limping along on a temporary $20 car tab fee and the last of its reserve funds, Metro did what it was told. Inefficient routes were cut or consolidated, bus drivers gave back cost-of-living increases, capital investments were canceled or deferred, fares were repeatedly raised, management was trimmed, and business practices were reformed. Metro was the target of multiple county, state, and independent performance audits, and subsequent reports have all lauded Metro for following through on money-saving recommendations. Hundreds of millions of dollars have been saved.

By all accounts Metro satisfied Olympia’s demands, and yet legislators have refused to live up to their end of the bargain. Not because Metro didn’t do enough—there’s been no suggestion of that—but because Republicans have been holding Metro’s MVET authority hostage in the service of forcing through a roads-heavy, anti-transit statewide transportation funding package. They need our votes to pass a gas tax increase their constituents don’t want, and so they won’t give us our local option MVET unless and until this statewide package is approved. Which, thanks to the dysfunction in the state senate, won’t happen anytime soon.

And so the county decided to use the less progressive taxing authority it already had. We moved on to Plan B: $60 car tabs and a tenth of a cent sales tax increase.

You can question the wisdom of pursuing Plan B during a low-turnout special election, but we’d pretty much run out of time. County voters yesterday rejected Proposition 1. So service cuts are now coming. It’s unavoidable.

But just because county voters as a whole refuse to tax themselves to pay for the services they need, doesn’t mean that pro-transit Seattle voters need to shoulder their full share of the cuts. That’s why it’s time to pursue Plan C: Seattle needs to buy back proposed cuts on in-city routes.

Under the reforms demanded by the state and others, Metro revised and rationalized the way it evaluates route performance, devising a strict formula to guide reducing or expanding service. Now that Prop 1 has failed (and the legislature seems no closer to passing a transportation package), Metro will soon finalize its list of service cuts, giving Seattle the opportunity to consider which service reductions it might want to defer. Each service cut would produce a corresponding cost savings. And that would be the cost to Seattle of preserving that service.

King County voters may have rejected a car tab fee, but dollars to donuts Seattle voters did not. A $20, $40, or even $60 city car tab to save city bus service probably stands a better chance at the polls, particularly if we schedule the vote for the higher-turnout 2014 general election.

Is it a sure thing? No. Is it the proper way to fund regional transit? Of course not—it doesn’t begin to address the tens of thousands of commuters crossing the city line (though we could always choose to subsidize some of those routes too). But remember, this isn’t Plan A. It isn’t even Plan B. It’s Plan Fucking C, for chrisakes. It’s what we reluctantly resort to only when the two better plans have already failed.

The only alternative is doing nothing. And given Seattle’s transportation needs, that’s not a plan Seattle can afford to pursue.

The early results are in, and Metro is fucked, with voters rejecting Proposition 1 by a relatively wide 55.28 percent to 44.72 percent margin. (What the fuck, Stranger? We didn’t lose elections like this when I worked there!)

And in case you’re hoping this is just a tiny percentage of the votes cast, not so much. Sure, it’s only 162,508 Yes and 200,887 No, and that only amounts to a 31 percent turnout. But those 363,395 votes counted represent the bulk of the 384,220 ballots that have been received by end of business today, and 31 percent isn’t exactly low for a special election. So while yeah, Kshama Sawant came back a kajillion points from the election night results, don’t expect that here—it’s just unimaginable that there are enough late ballots to overcome a ten-plus point deficit.

In the short term what this means is that Metro is going to start slashing bus service this summer.  There’s just no other choice. And in the long term, such a sound thrashing in the face of almost zero organized opposition to the measure bodes ill for the prospects of voters approving an even more progressive Motor Vehicle Excise Tax (MVET), presuming the legislature ever grants Metro that authority.

I’m not giving them credit for this, but welcome to the new normal the Seattle Times editorial board has been drooling over for years. Enjoy your traffic, Frank.

What the headline said.  A couple weeks ago I sat down with PBS NewsHour economics correspondent Paul Solmon to discuss Seattle’s fight for a $15 minimum wage. The segment is scheduled to run tonight.

How much of my interview they’ll use, I’m guessing not much. Past experience at these things suggests that 20 minutes of interview time boils down to less than 20 seconds of airtime. Either way, it was a pleasure meeting Solmon. He proved much more pleasant and thoughtful than the last network TV personality to interview me.

UPDATE: The East Coast tells me the segment airs around 6:40 pm. Sounds like I might have only about 20 seconds combined, but unlike with O’Reilly, at least I get the last word.

So-called “ride-share” companies like Lyft, Sidecar, and uberX have been praised for their innovative services, and there’s no doubt that these Transportation Network Companies (TNCs) are in the midst of transforming the car for-hire industry. Competitive prices, convenient app-based booking and payment, and a superior user experience are quickly changing consumer expectations, forcing the old regulated taxi industry to evolve and/or die.

Meanwhile, consumers aren’t the only ones benefiting from the TNCs. While these companies’ unregulated (and illegal) rush into the market has disrupted the traditional taxi and for-hire industries, creating much hardship for many drivers, other drivers have availed themselves of the opportunity to free themselves from the taxi owners and the hefty leasing fees they impose. At the same time, a whole new class of part-time amateur drivers have entered the field, hoping to earn extra cash from their personal vehicles in their spare time.

But while the TNCs appear in the short term to have created more winners than losers, the question remains whether the long term impact will be as rosy as TNC boosters promise. Will consolidation amongst the TNCs—almost inevitable in an uncapped market—result in higher prices for consumers and lower margins for drivers? Have former taxi drivers, newly invested in driving for the likes of Uber, merely exchanged one master for another, but now absent the protections of the old regulatory system?

For while the TNCs’ technology may be innovative their corporate structure is not. These are top-down, venture-backed corporations whose primary legal obligation is to serve the interests of shareholders. If TNC executives decide to raise or lower prices, increase their fees, change their terms of service, or boot drivers out of the system for whatever reason, neither drivers nor customers have any say nor any recourse.

Which is why a truly innovative taxi and for-hire system would be one that removes capital from its dominant role within the industry by empowering participants to compete with each other within a cooperative network that no one individual or corporation can ever own. And no, this isn’t some socialist fantasy. Things like this actually exist. For example, the Internet.

We’re not even talking about developing a piece of software here. We’re talking about creating a standards organization that defines and publishes an Application Programming Interface (API) for connecting drivers with riders through a completely open network. Entrepreneurs would be free to create apps and or application services for booking and tracking vehicles, processing payments, providing insurance, rating drivers and riders, and any other function the API defines. And this is not about shutting out established TNCs like Lyft, Sidecar, and Uber—they would be free to interconnect their booking and payment networks as well.

In the same way that a VISA card issued by any bank may be used to purchase goods at any store using any merchant service provider, our open network would allow any rider to book any vehicle through any TNC via a single preferred app. Drivers could potentially log into and drive for any or all TNCs at the same time, forcing the TNCs to compete for drivers and riders in real time. And innovation would no longer be limited to what a handful of executives choose to implement; such an open network with low barriers to entry could unleash services and efficiencies that have yet to be imagined.

This sort of chaordic organization (a term coined by VISA founder Dee Hock) could provide the perfect alternative to the half-regulated/half-unregulated system we have today—an alternative that upgrades the organizational structure of our for-hire industry along with the technology and the service standards.

So how do we get there? It could be done through a not-for-profit. Or the city could appoint a citizen committee representing various interests and areas of expertise to draft the network standards and define the API. The city could also incentivize (or even require) taxi, for-hire, and TNCs operating within the city to connect to this open network once it is online. Certainly our struggling taxi industry has a reason to participate if it hopes to compete with its Wall Street backed rivals.

But the larger point is that there is a way to embrace the technological innovations the TNCs offer without ceding control of our taxi and for-hire industry to Silicon Valley startups and their venture capital backers. At least, it’s worth a try.

Apart from it being total bullshit, I’m not sure that the “total compensation” crowd has fully thought through their proposal, particularly when it comes to health care benefits.

Because total compensation would allow employers to deduct from their minimum wage obligation the cost of providing health insurance, it effectively shifts the entire cost of health insurance premiums onto the backs of minimum wage workers. Accept your employer provided health insurance and the cost of the employer’s share will be deducted from your paycheck. Cancel your employer provided health insurance (say, because you are covered under your spouse’s insurance), and your take-home pay will rise according.

Whatever your decision, your employer’s cost of labor remains exactly the same. As such, your health insurance benefit ceases to be a “benefit” when your employer’s share of the premium is effectively zero.

And yet under the Affordable Care Act (you know, “ObamaCare”), employers with 50 or more employees will soon be required to offer  affordable coverage to all of their full time employees—”affordable” meaning that the worker does not have to spend more than 9.5 percent of income on premiums.

So what constitutes “income” and what constitutes “premiums” under a total compensation system? These are questions that would surely be litigated, but a quick look at the typical American pay stub makes clear that your federal taxable income (the relevant figure for ACA purposes) is your compensation minus the cost of your health insurance premium. So if your entire premium—including the alleged employer share—were deducted from your paycheck, it would lower your income accordingly.

Now presume a total compensation $15 minimum wage in which your only benefit is health insurance at a cost of $2 an hour ($344 in monthly premiums divided by 172 hours of full time work), bringing your federal taxable income to only $13 an hour. But your $2 an hour in premiums would come to more than 15.3 percent of your $13 an hour income, meaning that your premiums would not qualify as “affordable” under the 9.5 percent rule of the ACA.

Business lawyers might argue that the employer portion of the premium should not be counted toward the employee’s insurance premium costs, but that’s not how it would appear on the pay stub. Both portions of the premium would be listed as deductions to be subtracted from gross earnings. Thus any distinction between the two becomes purely fictional.

Throw in additional deductions under total compensation, and the employer’s ability to meet the ACA employer mandate becomes even less mathematically plausible, exposing the employer to up to $3,000 in annual penalties per employee. Like I said, I’m just not sure the total compensation camp has entirely thought this thing through.

But perhaps just as important to the larger discussion is how the ACA employer mandate rules once again expose total compensation for the lie it is: it simply does not pay $15 an hour. Thus any suggestion that total compensation proponents “aren’t arguing with the $15-an-hour goal,” is a lie as well.

So, who are the people behind the real anti-$15 minimum wage OneSeattle Coalition, not the hilariously fake 1Seattle.org website the Seattle Times stupidly quoted? The video below helpfully explains:

Now you know.