The best thing about the Seattle Times hiring Erik Smith, is that finally there’s somebody on the paper’s editorial board with the courage to give a voice to Seattle’s downtrodden business community:
A rare voice on minimum wage
Howard Behar, former president of Starbucks, explains why he supports a referendum campaign that would send Seattle’s minimum-wage ordinance to the ballot.
That’s Smith’s column and kicker. Really. Because there is nothing rarer in American politics than the voice of a rich white guy.
Seattle’s business community didn’t put up much of a fight when the City Council passed its highest-in-the-country $15 minimum-wage ordinance this month — at least not the united opposition that might be expected in a city of lesser size.
Um, there’s a difference between not putting up much of a fight, and losing. And they didn’t completely lose, either. No, Seattle’s business community didn’t win a permanent tip credit or “total compensation”, or the lower $12 minimum wage for which many business leaders belatedly fought. But they did get what amounts to an eleven-year phase-in before all Seattle workers will earn the inflation-adjusted equivalent of about $14.50 an hour in cash take-home pay in the year 2025.
But at long last, Howard Behar has had it with that talk of “sticking it to the man.”
“First of all, it’s not just the man anymore,” he says. “It’s the man and the woman. But is that what we think this is about? We’re trying to get somebody?”
Well then, he should stop watching re-runs of The Mod Squad, because I’m not sure I’ve heard anybody actually use that phrase since the early 1970s. I mean, I love “the man” as an apt metaphor for the way society actual works, but then, I’m old. I’m over fifty. “Sticking it to the man” is about as much a part of modern American parlance as “groovy” or “the cat’s pajamas.”
And no, $15 was not about “trying to get somebody.” It was about trying to get somebody a living wage. The rhetorical focus was always on the plight of the working poor. That’s why fast food workers became the symbol of the movement.
If anyone is the man, it is Behar. He is the former president of Starbucks, the Seattle-based coffeehouse chain with more than 20,000 outlets worldwide. Though Starbucks is one of the world’s most recognizable brand names, it was not vilified during the campaign by union organizers and political activists in the same way as favorite corporate targets McDonald’s and Wal-Mart.
So wait. Behar is “the man”…? And nobody talked about “sticking it” to him…? Now I’m just confused.
The company prides itself on the fact that it pays a bit more than the current minimum wage, provides health insurance for its employees and recently implemented a college tuition benefit.
Starbucks baristas average less than $9 an hour nationwide, only 42 percent of employees are actually covered by Starbucks’ health insurance (less than Walmart!), and it turns out the company’s much ballyhooed tuition benefit program isn’t all that much of a benefit. Starbucks is far from the worst company in the world to work for, but it isn’t a charity.
Yet, with a corporate headquarters about a mile from Seattle City Hall, the company is affected by the raised minimum wage as clearly as the smallest espresso hut along Highway 99.
And your point is… what? Starbucks should get a volume discount?
In criticizing the Seattle plan, Behar is not speaking for the chain he helped build from 28 stores before his retirement as president in 2007 — his only direct financial interest in Starbucks is the one share of stock he keeps framed on the wall.
No, he’s speaking for his class. I’m no Marxist, but this is clearly a class struggle. And as multi-billionaire investor Warren Buffett famously said: “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
A lifetime spent in business tells him the Seattle plan will hurt the low-wage earners it aims to help by raising the cost of living, and driving light manufacturing and distribution jobs beyond the city limits.
Ah, he’s just looking out for the little people. God bless him.
But while I don’t dismiss Behar’s business acumen, there just isn’t any data to support the claim that minimum wage hikes—even massive ones—have a substantial impact on employment.
That is why he is a major contributor to Forward Seattle, the organization gathering signatures to place a referendum on the November ballot to undo the ordinance. Behar agrees the wage should rise, but says the city ought to phase it in over a much longer period of time, perhaps at twice the rate of inflation until $15 is reached, for businesses of all sizes, uniformly.
So let’s do the math. Assuming our current annual inflation rate of about 1.75 percent (and that may be on the high side), it would take 14 years—not until the year 2028—before workers finally earned $15 an hour. But by then, $15 would only be worth about $11.78 in 2014 dollars. So in real dollars, Behar is proposing a $2.46 an hour raise phased in over a decade and a half.
Behar’s voice is important because so few in Seattle’s big-business circles have been willing to say a word. In smaller cities, small business dominates the Rotary clubs and the chambers. The silence from many Seattle-based business organizations reflects the fact that this is a regional headquarters city for so many large corporations. Some shrug — they pay more than minimum wage — and by taking a stand in Seattle they could bring picket lines elsewhere in the country.
You’re kidding, right? Twelve of the 21 non-elected members of Mayor Ed Murray’s Income Inequality Committee represented business, including the Seattle Chamber of Commerce, the Seattle Hotel Association, Nucor Steel, and Space Needle owner/hotelier Howard Wright. Alaska Airlines and the car rental, lodging, and restaurant industry spent a record $227 per vote in their failed attempt to defeat SeaTac’s $15 minimum wage initiative at the polls! The International Franchise Association is spending $1,000 an hour to file ridiculous lawsuits in an effort to bully other cities from moving forward. You call that silence?
“Business leaders are scared to death,” Behar says. “Because you know in today’s world what happens when they speak up? They are accused of being greedy, they are accused of not caring about people.”
Oh, boo fucking hoo! Workers are scared to death of being fired for attempting to unionize, but Behar is scared that some people might say he’s mean? Talk about asymmetry.
Behar calls the Seattle plan unjust and immoral — some reasons familiar, others not.
“Unjust and immoral?” You mean like paying somebody a poverty wage? You mean like the service industry practice of denying workers more than 29.5 hours a week so that they don’t qualify for benefits? You mean like the wage and tip theft that is rampant in the industry?
The Seattle plan will require big companies, chains and franchisees to raise wages faster than mom-and-pop operations, the idea being that big corporations can afford it. Franchisees are, of course, small-business owners themselves, a fact the Seattle ordinance ignores. And Behar notes that in a chain, each store is considered a stand-alone business and each is expected to turn a profit.
So, either Seattle chain outlets will raise prices in Seattle, just like mom-and-pop stores will — or, perhaps worse, they might allow that store in Cincinnati to subsidize the one in Seattle, and keep prices low until shakier independent merchants close their doors.
My god, when will America wake up to the holocaust that is befalling our nation’s persecuted big businesses? If only they had unlimited financial resources to buy high priced lobbyists, expensive advertising, and credulous editorial boards to defend their interests.
And, while the proposition was sold with the idea of reducing income inequality, the shock on the local economy will mean higher prices for things bought locally — buying power of a higher minimum wage is reduced.
So first we’re told we’re supposed to heed Behar’s warnings due to his “lifetime spent in business,” and then he throws this incredible piece of economic bullshit at us? Does he think we’re stupid?
If labor was the only cost of doing business, this argument might largely hold true. But of course, it’s not. Labor is about a third of the cost of a Big Mac. So if the entire cost of raising the minimum wage were passed on to McDonald’s consumers (and it won’t be), you’re looking at about a 19 percent price hike over the same period of time McDonald’s workers see their wages rise 56 percent.
Low-wage workers clearly come out ahead. And that’s just with burgers. The inflationary pressure won’t be zero, but big monthly expenses like electricity, utilities, cable, phone, and of course housing will see little direct impact from a hike in the minimum wage.
Behar says a proposition with such a dramatic effect on the city ought to bypass a council where special-interest groups hold sway. “The idea this got a fair hearing is garbage. Labor was going out the back door and business was sitting in the lobby.”
Again… you’re fucking kidding me, right? Is he really making the argument that corporate money doesn’t have enough influence in politics? That if Behar were still president of Starbucks, the mayor and every council member save Socialist Kshama Sawant wouldn’t take his phone call in New York minute?
The vilification of big business to promote an unworkable economic ideal hits him in the gut: “If we are a just society, we treat everybody the same.”
First of all, perhaps some people vilify big business leaders as “greedy” and “not caring about people” because capital-as-victim narratives like this make them come off as greedy and not caring about people? Just a thought.
Second, if Behar is really advocating for a “just society,” one in which we “treat everybody the same,” perhaps he should start with reforming Washington State’s most regressive tax system in nation? This is a system in which the bottom 20 percent of earners (you know, Starbucks baristas) pay 16.9 percent of their income in state and local taxes, whereas the wealthiest 1 percent (you know, Howard Behar) pay only 2.8 percent.
Does this sound like a just society in which we treat everybody the same? Of course not. And yet Behar has chosen to use his voice to champion the moneyed interests that benefit most from the status quo.
In a city where no one has spoken for big business on the issue, Behar does seem to be the man.
No one except all the big businesses I mentioned, and of course, the Seattle Times editorial board. Relentlessly. But nice attempt at an emotional bookend, Erik.