Goldy

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.

I know a lot of establishment folks are rolling their eyes at the notion that 15Now.org is holding a national conference in Seattle today. Arrogantly overambitious, amiright?

But it turns out, that’s exactly what this is. Among the 300-plus attendees who have already arrived for the morning plenary session are vocal contingents from Boston, NYC, Philadelphia, Pittsburgh, Chicago, Minneapolis, LA, Oakland, and other cities scattered throughout the US. It really is a national conference.

And the focus  of the conference is national as well. Attendees today will approve the structure of a national organization, and elect executive committee members from throughout the country. Today’s conference is about much more than passing a $15 minimum wage here in Seattle. As 15Now.org co-founder Jess Spear told the crowd, “$15 isn’t the end—it’s the beginning.”

I’ve agreed to speak at tonight’s rally on the topic of the role of the media in the fight for a living wage. What will I say? I’m not exactly sure yet. But stop by the basketball auditorium at Franklin High School at 7:30 pm to find out.

I’m as curious as anybody to see how large a crowd shows up for the 15 Now National Conference tomorrow at Franklin High School, so I’m planning to show up and find out. But I’m doing more than that. I’m also scheduled to speak at the 7:30 rally, along with the likes of Seattle City Council member Kshama Sawant, Pulitzer Prize winning investigative journalist David Cay Johnston, and others. My topic: the role of the media in the struggle for a living wage.

What will I say about my own employment circumstances? Show up and find out.

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?

https://twitter.com/davidmeinert/status/459434837879709696

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

https://www.youtube.com/watch?v=CUiLMgVcxwQ

(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.