Goldy

First of all, if Christopher wants to interview people who are truly struggling to scrape by on their meager income, he might want to start by interviewing his own staff. Second, I’m not sure I get the whole point of featuring failing businesses as the poster children of the anti-$15/hour side of the debate? I  mean, what’s the argument? If we raise the minimum wage, the unprofitable bookstores and coffee shops Christopher loves will fail even sooner? That’s hardly a sound premise on which to base economic policy.

Don’t get me wrong, I have great empathy for small business owners. I come from a family of small retailers, and I owned and operated a small business myself. My then-wife and I founded Eccentric Software in 1993, initially to publish what I loving describe as “the world’s most widely pirated rhyming dictionary software,” capitalizing our business on credit cards and some small loans from family members. Over the next five years we sold tens of thousands of copies of four different titles in shrink-wrapped retail packaging through major outlets like Computer City, CompUSA, Egghead, and in all the major mail-order software catalogs. Our software (much of which I developed myself) garnered great reviews and developed a loyal following, generating hundreds of thousands of dollars in revenue. To this day I’m proud to say that I am one of the few Americans who can boast a trade surplus with Japan.

But while the business never lost money, it never really made much money either. It was an awful industry, one in which the people who create the most value reap the least rewards, and in which longtime vendors would sometimes just decide to refuse to pay you, simply because they could. We lived comfortably, but we eventually walked away with a six figure debt.

Still, nobody shed tears for us, because such are the risks of entrepreneurialism. We knew that going in. But we took that risk anyway, partly because of the prospect of reward, and partly because we just passionately believed in our product. I can point you to dozens of Broadway musicals and Disney movies and hit songs that I know were written using our software. That’s gratifying in itself. And the money thing worked itself out too, with my then wife’s entrepreneurial experience helping her land a dot.com job that ultimately paid off our remaining debt. (I also landed good-paying dot.com work, but my options never paid off.)

So yeah, I know what it’s like to run a struggling small business. I know what it’s like to pour all my passion and time and financial resources into a business, for little monetary return. Hell, even HA was an entrepreneurial endeavor into which I sunk immense human capital, often for non-monetary return. So I feel for small business owners, and do agree that the system, alas, is stacked against them.

That said, most businesses fail. They just do. I’m sorry that Rafael Sanchez might have to go back to an unsatisfying job at Microsoft or some other bland corporation now that his lovely little business didn’t work out (I’ve been to Cintli, and it truly was a lovely little place). I feel your pain, Rafael. Been there, done that.

But life isn’t fair. So while no doubt a $15 minimum wage might push some struggling small businesses over the edge, others will take their place. Broadway won’t become an empty landscape of boarded up storefronts, bereft of coffee shops, restaurants, and retailers. The business community will adapt to Seattle’s living wage economy. That’s the way capitalism works. And there’s no rule that says the forces of creative destruction may only be unleashed by the private sector.

Because the law is the law. (Though geographic diversity could be one of several reasonable tie-breakers.)

Also, contrary to the mischaracterization in today’s Seattle Times, Justice Jim Johnson is not “an unabashed populist.” He is a government-hating ideologically rigid Libertarian.

Just setting the record straight.

One of the big debates in the battle over how to regulate Transportation Network Companies (TNCs) like Lyft, Sidecar, and uberX is over how to ensure adequate insurance. The Seattle City Council seemed pretty adamant about requiring insurance comparable to the commercial insurance required of taxi drivers, while the TNCs basically argued: “Don’t worry, we’re handling it, trust us.” Particularly offensive to the TNCs is a provision that requires that their blanket insurance cover drivers whenever they are logged into the system, not just when they are engaged with a passenger.

Good thing too, because insurance companies are busy updating their personal auto insurance policies to explicitly exclude coverage when the vehicle is used in connection with TNC services, for example, in the revision above that Amica has sent to customers:

We have excluded Medical Payments Coverage for bodily injury sustained by anyone other than you or any family member while occupying, or when struck by, your covered auto while it is enrolled in a personal vehicle sharing program under the terms of a written agreement and being used in connection with such program.

What exactly does this language mean? I’m not sure. But I wouldn’t count on my insurance company paying a claim on an incident that occurred while I was logged into a TNC. Or, perhaps, ever.

TNC boosters seem to think that because there’s an app, it changes everything! It doesn’t. Your personal auto insurance does not cover commercial for-hire use. So I’d make damn sure the TNC’s insurance does before assuming the liability that comes with being a for-hire driver.

As I wrote about a few months back on Slog, CenturyLink has long argued that its efforts to upgrade broadband speeds throughout the city have been hampered by regulations requiring neighboring homeowners to give their approval before installing refrigerator-sized utility boxes on city-owned sidewalks, planting strips, and alleys. These utility boxes—like the ones pictured above, just a couple blocks from my house—are unquestionably both an eyesore and a graffiti target. But CenturyLink says that 21,000 households would have access to faster broadband speeds today, had they the freedom to to liberally plop these down throughout the city.

And that’s a freedom that Mayor Ed Murray now says he’s ready to bestow. Um… hooray?

Look at the utility cabinets above. Now picture them installed on the planting strip in front of your house. Now honestly ask yourself whether you and your neighbors should have zero say in how and where they are installed?

Some residents of Beacon Hill and other underserved neighborhoods had been asking for a pilot program that would have suspended these regulations in certain neighborhoods, just to see how things worked. But the mayor’s proposal would apparently eliminate these regulations altogether. And CenturyLink says it will take that as an opportunity install 349 cabinets in the first year alone.

That could provide welcome broadband upgrades to thousands of Seattleites. Which is good. But it would also create hundreds of new eyesores. (Of course, CenturyLink could alternatively install these cabinets underground or on utility poles, or pay homeowners to install them on private property, but that would cost more money, so no go.)

Personally, I support the notion of a pilot program. But completely eliminating the current restrictions without getting any binding promises back from CenturyLink just strikes me as regulatory giveaway and recipe for some very disgruntled homeowners.

Great news for billionaires, as the US Supreme Court further unravelled campaign finance and disclosure regulations by striking down the overall limit that individuals may donate to candidates and political parties.

Under one of the last remaining useful provisions of the McCain-Feingold (a provision that dates back to the post-Watergate election reforms), individual donors had been limited to $48,600 in overall contributions every two years to all federal candidates, and $74,600 to political parties. (The $2,600 cap per candidate remains in place.) Now, really, really rich people like the Koch brothers can dump even more money into politics, assuring that their voice can finally be heard.

The conservative majority on this court won’t do squat to stop the GOP’s campaign of voter disenfranchisement, but they are absolutely outraged at the notion that wealthy people shouldn’t be allowed to spend as much money as they want influencing the few proles who are actually allowed to vote.

Hooray for democracy!

I was thinking of doing an April Fools post in which I announced that I had been hired by the Seattle Times as a political blogger and columnist. But every time I sat down to write it, it never came out funny.

The fact is, and as immodest as it may sound, there is no media outlet in Seattle that could profit more from my services than the Seattle Times. I would deliver the kind of edgy, funny, and provocative commentary younger audiences demand, while helping to combat the common perception of the Seattle Times as a paper hostile to our city’s urbanist and progressive values. I’d create a little havoc, sure—I mean, what kind of paper hires a columnist who is guaranteed to debunk their own editorials?—but those sort of intramurals make for a helluva good read. And given my tireless blogging and my decade of cultivating political sources, my blog would quickly become the most politically relevant feature in the paper since “Postman on Politics.”

And relevance is something the Seattle Times could use more of.

True story. The very last event I covered as an employee at The Stranger was a minimum wage forum held down the street at Seattle Central Community College. At one point, King County Council Member Larry Gossett quotes something from a Danny Westneat column, only to be met with blank stares from the couple hundred community college students in the room. “Danny Westneat… the Seattle Times?” Gossett prompts the crowd, raising his hand by example. “How many of you read Danny Westneat?”

Nobody raises their hand.

About ten minutes earlier, Seattle City Council member Kshama Sawant had cited something in The Stranger, and mentioned that “Goldy” was in the room. A lot of heads turned around looking to see which person was Goldy.

This isn’t meant as a knock against Danny. I like Danny. He’s a smart, coherent, and thoughtful writer (if a bit too conventional for my tastes). And had that forum been held in front of the Municipal League instead of a bunch of grungy kids, nearly every hand in the room would have been raised at the mention of Danny’s name. But most of them would’ve been familiar with my work too, if less sympathetic. Love me or hate me, that’s the sort of broad relevance I could bring to Seattle’s last remaining daily.

Look, I know I haven’t always been kind to publisher Frank Blethen. But this is business. And I’m convinced that bringing somebody like me on board as a brash counterweight to his paper’s staid status quoist zeitgeist would be good for business. Then again, if the Blethen family was motivated purely by business interests, they probably would’ve unloaded the paper more than a decade ago.

So here I am howling into the wind on my lonely blog, as Blethen watches his aging readership gradually die off. Not sure which one of us is the bigger April fool.

It’s as if the editors at the Seattle Times live in a world entirely free of context:

The proposal now before the Seattle City Council is to double the existing property-tax levy devoted to parks, to $54 million a year, raising the annual cost for the owner of a $400,000 home from $76 to $168. It is not a backbreaking addition, but it would tighten the squeeze on middle-class families already struggling with Seattle’s cost of living.

And it furthers a trend of jumbo specialty property levies. The annual amount of dedicated “lid-lift levies” jumped over the past decade from $65 million to $146 million. The Families and Education Levy doubled in 2011 and the low-income housing levy jumped 50 percent in 2009.

Yeah, true. But you know what else has jumped over the past decade? The hundreds of millions of regular property tax levy dollars (those that don’t require a public vote) lost to Tim Eyman’s I-747, an initiative soundly defeated within Seattle. I-747 limits regular levy growth to an absurd 1 percent a year. So while voter-approved dedicated lid-lift levies may indeed be $81 million higher than they were a decade ago (if you can trust the Seattle Times editorial board’s numbers), I-747 will cost city coffers as much as $186 million in 2015 alone, the first year the proposed parks levy would take effect!

Is it great policy to move all this funding out of the general fund and into dedicated levies? No. It’s stupid. But thanks to I-747, the only other alternative would be to grow the $267 million parks maintenance backlog the editors already lament.

That is the context in which all these lid-lift levies have gone to the ballot. And unless we debate the parks district proposal within that context, it’s not really an honest debate at all.

Just two Sunday’s ago I sowed my first planting of radishes. Today they’re ready to be thinned, the spicy seedlings making a delicious addition to tonight’s salad. Fourteen days from planting to harvest; can’t ask for a faster growing season than that.

It’s one of the reasons I love growing radishes and arugula, both of which are fast, vigorous and reliable.  Arugula especially is a crazy thing to buy in the store, where supermarkets charge yuppy prices for a plant that is essentially a weed. The row of arugula in the foreground of the photo above was planted only last week. Next week I’ll enjoy my first thinning, and as long as I keep planting fresh sowings every couple weeks, I’ll be flush with arugula until the summer heat gets too intense. Then I’ll start sowing again in September, and enjoy frequent harvests until the first hard freeze.

Tomatoes take commitment, and they are of course the pride of my backyard garden. But radishes and arugula provide a sense of immediate gratification that makes the wait for the summer bounty more bearable.

Matthew 10:34-37
Think not that I am come to send peace on earth: I came not to send peace, but a sword. For I am come to set a man at variance against his father, and the daughter against her mother, and the daughter in law against her mother in law. And a man’s foes shall be they of his own household. He that loveth father or mother more than me is not worthy of me: and he that loveth son or daughter more than me is not worthy of me.

Discuss.

Yet another reminder that that the powers that be will do anything to avoid raising taxes on the wealthy, even if it means (gasp) spending money on educating preschoolers:

ALBANY — After weeks of closed-door negotiations, Gov. Andrew M. Cuomo and legislative leaders reached a deal on the next state budget that provides $300 million for prekindergarten in New York City and grants new protections for charter schools, officials said on Saturday.

The agreement, which followed exhausting but relatively peaceful negotiations, does not include a tax increase on high-earning city residents that Mayor Bill de Blasio had sought to pay for preschool classes and after-school programs.

Arguably, it was Mayor de Blasio’s threat to tax the super-wealthy that forced this money out of state coffers.  Perhaps that’s a lesson Seattle politicians should take to heart in putting together the funding package for our universal preschool program?

Sometimes a question can be as revealing as the answer.

In between sessions at yesterday’s Income Inequality Symposium, I was drawn into a discussion with fellow attendees about the “total compensation” minimum wage that some in the business community are still pushing. Under total compensation, an employer’s obligation to pay a minimum of $15 an hour could be met by a combination of cash wages, tips, and the cost of providing certain benefits. For example, I explained, $10.50 an hour in cash wages, plus $2.50 an hour in tips, plus $2 an hour in benefits would amount to a legal $15 an hour wage.

So if an employer were to offer a matching 401K contribution up to a maximum of one percent of an employee’s salary, I was asked, what would be the maximum benefit a minimum wage worker could receive? Would it be $0.15 an hour—one percent of the putative $15 an hour minimum wage? Would it be, using the example above, $0.105 an hour—one percent of the employee’s cash wages? Or would it be some more difficult to calculate number?

It took me a moment to wrap my mind around the question, but the answer I arrived at surprised even me. It doesn’t matter on which figure the employer chooses to calculate the maximum 401K match: under total compensation a matching 401K contribution is worth absolutely nothing to a minimum wage employee. Zero. Bupkes. Zilch.

And the same is true of the value of every other benefit.

Think about it. If you are earning a $15 total compensation minimum wage, and your employer generously matches your 401K contribution up to one percent of that higher number, you would receive $0.15 an hour in additional benefits. But that higher benefit could then be used to reduce the wage portion of your compensation by an equal amount. The benefit ends up costing the employer nothing, and the net result is that the “matching” contribution comes directly out of the employee’s paycheck. The employer gives with one hand and takes away with the other.

Likewise for other benefits like health insurance premiums and “paid” vacation days, the cost of which may also be used to decrease the wage component of your total compensation by an equal and offsetting amount. It’s as if minimum wage employees were purchasing these benefits through paycheck deductions; the employer bears none of the costs.

Some business owners argue that without total compensation they will be forced to eliminate benefits in order to shave costs. That may or may not be true. But from the minimum wage employee’s perspective, total compensation virtually guarantees the equivalent outcome. For when a benefit is transformed into a line item to be deducted from your take-home pay, it becomes nothing more than just another monthly expense. “Benefits” are no longer additive to one’s total compensation—eliminate them and your cash wages go up by a corresponding amount.

Of course, the caveat holds that all this analysis is only true of full-time employees. Lacking the cost of benefits to subtract from total compensation, low-wage part-timers and temporary workers could see their effective wage floor rise substantially.

But as a policy for raising the incomes of all low-wage workers, total compensation fails to deliver on its promise, while (for reasons I’ve explained previously) eroding the effective wage floor over time. A $15 total compensation minimum wage simply does not guarantee a $15 minimum wage. And to insist otherwise would be a lie.

Because I’m too stupid to get it through my thick skull that nobody cares what I have to say about the minimum wage anymore, now that I don’t have a media outlet to say it through, I’m spending my day at Seattle’s Income Inequality Symposium listening to people discuss a lot of things I already know. I’m nothing if not stubborn.

“The most pro-business thing you can do in a capitalist economy is invest in the middle class,” billionaire(ish) keynote speaker Nick Hanauer stressed to the crowed. Can’t get much more unequal income-wise at the moment than me and Hanauer, but it sounds like we’re mostly on the same side of this issue.

Balky web site and balky Internet connection permitting, I’ll post some updates throughout the day. Or, follow me on Twitter for more frequent and reliable updates.

UPDATE: Lot’s of informative Tweets from me today, but also this:

 

It’s really, really complicated. The impact, the morality, the unintended economic incentives… everything about a “tip credit” (or “tip penalty” as opponents call it) is a lot more complicated than our current minimum wage debate allows.

Which is a long way of saying that I’m not finished writing the post on the tip credit that I had previously promised. In the meanwhile, I’d be interested in hearing your thoughts on it in the comment thread.