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There is this weird counterintuitive and counterfactual meme being put forth by the anti-minimum wagers that argues that a lack of a “tip credit” could ironically end up hurting the incomes of tipped employees. For example, from an anonymous server writing in The Stranger (because that’s apparently their new journalism business model—anonymous people writing for free):

Tips are an important part of my income. As someone who makes a great living on tips, I don’t want the awesome culture and great jobs created by Seattle’s restaurant boom to disappear. I do not believe customers will keep tipping at the percentages they do now if they know my base wage has gone up 60 percent. And if that’s how customers respond, the end result will be a drastically lower income for those of us who work in restaurants and bars—gender aside.

Oh. Well. She is anonymous after all. So perhaps we should just defer to her “belief” and scrap this whole foolish $15 minimum wage endeavor entirely? Best intentions and all that, but my bad.

Oh please.

First, let’s be clear that this argument is not just totally speculative; it is also somewhat illogical. As an episode of Freakonomics Radio pointed out last year, tipping isn’t exactly a rational economic exercise. It’s a matter of custom. So most Americans tip out of a combination of habit and peer pressure—15 percent if you’re a cheapskate, 20 percent if you’re not, or double the sales tax rounded up here in Seattle if you’re lazy like me. In fact, Seattle’s tipping culture is so ingrained, that it’s hard to imagine a minimum wage hike impacting most consumers behavior with or without a tip credit. Indeed, if restaurant owners carry through on their threat to raise prices, then it is at least equally reasonable to speculate that tipped income will go up, as diners simply add their customary tip percent onto the new pricier bill.

Further undermining this anti-$15 speculation is the total absence of supporting facts. I mean, it’s not like we haven’t raised the minimum wage many times before—by a whopping 85 percent for tipped employees here in Washington state between 1988 and 1989—and with no tip credit! This isn’t ancient history. And yet there is zero evidence of mass restaurant closures, job losses, or a decline in tipping in the aftermath of this precipitous wage hike. The economic data is there. If there was even the flimsiest evidence to suggest a negative economic impact from that 1987 minimum wage initiative, you can be sure that the bullshit artists at the Washington Policy Center would be flinging it.

Finally, even if a $15 minimum wage with no tip credit might influence some diners to chintz on their tips (because you begrudge the server bringing you your $40 entree a $5/hour raise, or something), consumers would have to have this information in order to act on it. But most diners are low-information consumers, as well as creatures of habit. Ms. Anonymous acknowledges our “awesome” tip culture, despite the fact that Washington is one of only seven states without a tip credit. Do most diners understand that?

I do, and yet I tip the same percentage back East in Pennsylvania and New Jersey that I do here in Seattle, because habit! Except for one big difference: Back East, I almost never drop money in the tip jar for take out coffee or food, because I know the servers won’t get it! For example, New Jersey’s tip credit is an abusive $6.12 an hour. No Starbucks barista in New Jersey is making anything close to that in tips. So every dollar you stuff in a tip credit state’s tip jar is going straight toward lowering Starbucks’ labor costs.

Of course, Seattle baristas do better. We don’t currently have a tip credit. And yet according to a survey conducted by the coffee blog Sprudge, our tipping culture here is especially strong:

I was a little surprised that Seattle made only one appearance in the top 10 list for tips with $9.28/hr, despite tips in Seattle making up the highest average percent of income of any city at 35%. In my experience, the high-end of tips in Seattle may not be great, but tipping is obviously a cultural value: Seattle was #3 for average tips at $5.85/hr.

FYI, that $5.85 an hour average is almost exactly what our tip credit would be. You might as well just dump that tip jar directly into the employer’s pockets.

And that’s why if we pass a tip credit here in Seattle, I’ll stop tipping baristas here too. Because I’m not stupid.

– I’m cautiously optimistic about the Seattle Bike Master Plan

– How Portland can reduce the wage gap between women and men

Often there’s really not any more time on the “day off” for creative work than during the rest of the week. Everything else that got put off during the week rushing in to fill that gap left by the day job. [h/t]

– If you’ve had your bike stolen in Marysville, go look for it.

– Today in conservative victimhood

– Now where will I possibly be able to find deep fried seafood in Ballard? (I like Ivar’s, but I don’t think I’ve ever been to the Ballard location).

– Happy home opener day, Mariners fans. It’s maybe not the nicest day for it.

– Happy? equal pay day.

– It’s always pretty to think that Washington will come together in bipartisan comity and start governing for the good of all the people. To think this will happen as a result of the vastly wealthy having even more influence than they already have strikes me as so optimistic as to be delusional.

– What Does 17% Mean?

– Here’s another benefit in Seattle for Oso if you’re interested in it.

– We should definitely keep policing other people’s weight.

– Poor, poor Representative McAllister

There are lot of good reasons to oppose a “tip credit”, but one that isn’t often discussed is the way it incentivizes bad behavior on the part of unscrupulous employers by magnifying the rewards of wage theft. The math is subtle, but simple.

Let’s say you earn $27 in tips over the course of a nine hour shift. Under a straight up $15 minimum wage, you’d earn $15 an hour in wages plus $3 an hour in tips for a total cash compensation of $18 an hour. That’s $162 in tips and wages over a nine-hour shift.

But under a tip credit, that same shift would earn you only $135: $12 an hour in wages, plus $3 an hour in tips, for a total of $15 an hour. If your tips per hour are smaller than the maximum tip credit, all of your tips go toward your employer’s tip credit. You know—in his pocket. Whether you earn a dollar or two an hour more in tips or a dollar or two less, it makes no difference on your paycheck—all it does is raise or lower your employer’s labor cost by an equal amount. And that’s where the wage theft incentive comes in.

For example, let’s say your employer cheats you out of an hour, forcing you to clock out after only 8 hours or recording only 8 hours on your pay stub. Well, of course you lose an hour of pay, so your paycheck goes down $15 to $120. But your employer, who would have paid you $12 an hour over the course of a 9-hour shift, now gets to spread your $27 in tip credit out over fewer hours. $27 divided by 8 equals about $3.38 an hour in tip credit. So rather than paying you $12 an hour for 9 hours of work, your employer now only pays you $11.62 an hour for 8 hours of work. Such a bargain!

Of course, not all employers cheat like this. I’m guessing most don’t. But some do. And as the free marketeers will tell you, if you incentivize bad behavior, you’re likely to get more of it.

In Goldy’s metacommentary piece yesterday on The Seattle Times’ oppposition to funding Metro, he gave them some well deserved shit for pretending to oppose it because of its regressive nature.

Oh no! It’s a “regressive” tax! This from an editorial board that has opposed every single progressive tax (like, you know, on income or estates) that has come before it. What a bunch of fucking concern trolls.

But I think it’s even worse than that: We’ve known something was coming for a while. The Seattle Times ed board hasn’t exactly been leading the charge for a better system. Dow Constantine has been telegraphing since he got into office that he’d do something if the state didn’t act. And in that time The Seattle Times has neither suggested what that something ought to be nor have they pushed the legislature to act to allow King County to have a better system.

Could you imagine how different the debate would be in the state, if the state’s leading — or at least largest — paper had editorial after editorial pushing the legislature to let King County tax ourselves however we want? If they demanded that even if the GOP didn’t pass a complete transit package, that they at least give us a more progressive option?

I’m trying to generate the appropriate outrage at the Seattle Times editorial board for endorsing a “No” vote on King County’s Metro-saving Proposition 1, but then it’s kinda like raging at my dog for killing squirrels. It’s what she does. It’s her nature. And reading this editorial is like watching the editors chase a squirrel.

VOTERS should weigh the regressive tax request embedded in King County Proposition 1 against history.

Oh no! It’s a “regressive” tax! This from an editorial board that has opposed every single progressive tax (like, you know, on income or estates) that has come before it. What a bunch of fucking concern trolls.

The pattern is clear. As in previous rounds of asking taxpayers for more money, Metro sees its shortfall as a revenue problem, rather than thoroughly confronting its well-documented unsustainably high operating costs.

And since the pattern is so “clear” and these unsustainably high operating costs are so “well-documented,” we can presume the editors are about to clearly document them.

Um… no:

Voters also should consider the near future when they face many other ballot requests, from parks to city transportation. Tax fatigue could jeopardize crucial investments such as public prekindergarten.

Yes, please consider the other future tax measures the Seattle Times will endorse “No” on. For the children!

When Washington voters in 1999 approved Initiative 695, it wiped away a vehicle excise tax that gave the King County Metro system about one-third of its revenues.

In response, King County leaders asked voters for a 0.2 percent increase in the county sales tax “to preserve and improve our bus system,” promising 575,000 more hours of bus service, as the 2000 voter pamphlet read. Voters said yes. Over the next six years, they got only 203,000 hours of new bus service.

Yes, voters did approve I-695. But not Seattle and King County voters. We rejected it. Also, the MVET that I-695 wiped away was the most progressive tax in the most regressive tax system in the nation. But I don’t remember the fucking concern trolls at the Seattle Times shedding any tears over that.

In 2006, King County leaders again asked for a 0.1 percent sales tax increase, to fund Rapid Ride expansion. Voters said yes. The promised expansion is behind schedule, and in spots is not the superfast service promised.

And in 2008 the nation plunged into the Great Recession, taking Metro’s sales tax revenue with it.

During this period, driver wages rose significantly, to the point that Metro had the third-highest-paid drivers in the country. In 2008, Metro attracted the scrutiny of the Municipal League of King County, which issued a damning report on the agency’s cost structure. In 2013, it issued a grumpy follow-up report, noting modest improvements but reiterating cost structure concerns.

A) That was six years ago. B) Don’t trust this editorial board’s numbers. Ever. And C) Unionized bus drivers! It burns!

In 2012, after sales-tax revenues crashed because of the Great Recession, Metro got a boost with a temporary $20 car-tab tax.

A temporary fee that only made up a portion of Metro’s shortfall. The rest was met through cost cuts, fare hikes, and using up the last of its cash reserves. Also, this temporary fee was intended to tide us over until the legislature approved a more stable funding source. It never did. So King County is using the only taxing authority it has.

This year, King County leaders are back again. Metro faces a $75 million deficit when that car tab expires. This time, the request is breathtaking, for its size and for the regressive nature of the proposal. A $40 hike in car tabs and another 0.1 percent sales tax increase would yield an estimated $1.6 billion over 10 years. Three-fifths of it goes to Metro, the remainder to roads, bike lanes and road diet programs.

Of course they’re back again. The temporary $20 car tab fee expired, and the reserve funds are all used up. Everybody understood it was only a stopgap measure at the time the car tab fee was passed. And the size of the package is no more “breathtaking” than the MVET authority Olympia promised, but refuses to deliver. The two tax packages raise exactly the same amount of revenue, and for exactly the same purposes.

As for the regressive nature of the tax, yes, car tabs and sales tax are more regressive than an MVET, which taxes the value of your car, and thus hits owners of more expensive vehicles harder. But what the fucking concern trolls at the Seattle Times don’t tell you is that is that the package includes a $20 rebate for low-income households, as well as a new low-income fare. And of course, nothing could be more regressive than slashing bus service!

Metro’s defenders cite recent cost-saving reforms in the 2010-2013 contract with the Amalgamated Transit Union Local 587, including a wage freeze the first year and an overall 2.3 percent increase the second year.

In the private sector, that would be called a rational response to an economic crisis. In the public sector, those concessions are deemed justification for a breathtaking new revenue increase.

Though the Municipal League is supporting Proposition 1, it does so “reluctantly,” citing ongoing concerns with cost controls and efficiencies. It urges Metro to do better, including measuring itself against peers.

But: If voters approve Proposition 1, King County would have no incentive to do the hard work of bringing down labor costs that still saddle Metro with the fifth-highest driver costs in the country, behind only Boston, Santa Cruz, Washington, D.C., and Chicago.

Let’s be clear, the Seattle Times opposition to Proposition 1 is based solely on its opposition to anything that remotely smells of organized labor. The drivers union is the editors’ squirrel. It doesn’t matter how regressive the taxes in Prop 1 are—if the measure balanced the tax hike by busting the union, the paper would happily wag its tail in approval.

Also, don’t trust the editors’ numbers. They’re almost always wrong.

If voters turn down Proposition 1, King County threatens a round of devastating bus-service cuts, many on popular routes including those carrying students to college. County and Metro leadership should not let that happen.

County leaders are trying not to let this happen. By raising revenue. Because, you know, shit costs money.

The threat ignores other options, including further fare increases and ever tighter control of administrative costs and capital expenses.

And the editors ignore the fact that Metro has been pursuing these options for years. Metro is about to raise fares for the fifth time since 2008—and it already has some of the highest farebox returns in the nation.

Cutting services is not a threat. If Prop 1 fails, service will be cut, just like it was in Pierce and Snohomish counties when they failed to raise new tax revenue.

King County has been negotiating with the drivers union for nine months. Talks are now in mediation. Both sides could earn voters’ trust with quick resolution of a contract that further drops costs.

Jesus. Again with drivers union. Squirrel!

Saying no to Proposition 1 is not a message that transit does not matter. It does. The region, particularly job-dense downtown Seattle, needs reliable bus service. Nor should a no vote be read in Olympia as a sign the state Legislature does not need to pass a transportation package that includes less regressive transit tax options. It does.

No, it’s a message that low taxes matter more than transit. At least to the editors of the Seattle Times.

Vote no on Proposition 1, and send King County government a message that Metro has more work to do on righting its cost structure before asking voters for more revenue.

Actually, all the Seattle Times is doing is sending a message that it is either too stupid to understand that time has run out, or too dishonest honest to admit it. The legislature was supposed to grant Metro MVET authority two sessions ago, but senate Republicans have persistently blocked the bill, you know, just because.

The $20 tab fee expires in June. The reserve funds are empty. Whatever other options may exist cannot be exercised in time to avoid devastating service cuts. Reject Prop 1 and Metro will slash service. That’s not a threat. That’s reality.

But look: squirrel!

Another election, another Pam Roach primary — and possibly general election — challenge.

State Sen. Pam Roach, a guardian of the Republican Party’s right flank in Olympia, is getting a challenge from a fellow Republican.

State Rep. Cathy Dahlquist, R-Enumclaw, announced this week that she will run against Roach. Under Washington’s “top two” primary system, the challenge creates the distinct possibility of a November battle between two Republicans in the 31st District of eastern King County and rural-exurban Pierce County.

And at the link, Dahlquist makes good noises about education, including mentioning teacher pay that the GOP often don’t when talking about education. Still, on many issues she’s a pretty standard Republican. She voted against the Reproductive Parity Act and marriage equality. And I couldn’t find any tax increases she supports, so wanting to pay for education is nice, but presumably it means by destroying the rest of the state’s social services. So sure, she’d almost certainly be better than Roach. But that’s a pretty low bar to clear.

– Fort Hood can’t catch a break. Video loads automatically.

– City Hall Starts to Give a Shit About Women’s Pay Equity Again

– I love that Sound Transit has pictures for specific stations, but some of them don’t make a lot of sense (to me). Answer some questions to help them design the pictures for new light rail stations. [h/t]

– Supply and demand is a thing in housing.

– STOPPPPPP YOU’RE HURTING MY FEEEEEELINGS is apparently the new clarion call of the conservative movement. I’m still a little shocked by it.

This Sunday’s New York times had a story about worker owned cooperatives. The main example that they use is in San Francisco, but

If you happen to be looking for your morning coffee near Golden Gate Park and the bright red storefront of the Arizmendi Bakery attracts your attention, congratulations. You have found what the readers of The San Francisco Bay Guardian, a local alt-weekly, deem the city’s best bakery. But it has another, less obvious, distinction. Of the $3.50 you hand over for a latte (plus $2.75 for the signature sourdough croissant), not one penny ends up in the hands of a faraway investor. Nothing goes to anyone who might be tempted to sell out to a larger bakery chain or shutter the business if its quarterly sales lag.

Instead, your money will go more or less directly to its 20-odd bakers, who each make $24 an hour — more than double the national median wage for bakers. On top of that, they get health insurance, paid vacation and a share of the profits. “It’s not luxury, but I can sort of afford living in San Francisco,” says Edhi Rotandi, a baker at Arizmendi. He works four days a week and spends the other days with his 2-year-old son.

Arizmendi and its five sister bakeries in the Bay Area are worker-owned cooperatives, an age-old business model that has lately attracted renewed interest as a possible antidote to some of our most persistent economic ills. Most co-ops in the U.S. are smaller than Arizmendi, with around a dozen employees, but the largest, Cooperative Home Care Associates in the Bronx, has about 2,000. That’s hardly the organizational structure’s upper limit. In fact, Arizmendi was named for a Spanish priest and labor organizer in Basque country, José María Arizmendiarrieta. He founded what eventually became the Mondragon Corporation, now one of the region’s biggest employers, with more than 60,000 members and 14 billion euro in revenue. And it’s still a co-op.

Does anyone know about cooperatives in the Seattle area if people want to support them with their dollars? I was trying to think of any, and I couldn’t. I mean the advantages of capitalism without, you know, creating more capitalists (except their financiers, and I guess customers). If they make a decent coffee with good enough pastries, that’s really all I want out of a coffee shop.

If people know of local worker cooperatives, especially ones that provide good goods and services, please leave a comment.

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.

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.

– So, yeah. More on World Vision.

– On year anniversary of devastating DUI, community rallies in call for ‘vision zero’

– Five Reasons Contraceptive Coverage Is Essential

– Glad to see that Oregonians care about climate change. Hopefully that will lead to real action.

– Olympia has ducks

– If you’re interested in the memorial service for Jim Compton, it’s Saturday at Town Hall 10:00 to Noon.

– Getting ORCA Cards to people who need reduced fares is a bit of a problem, so one more way is good. If Metro is going to have a reduced rate the next time it increases the fare, I hope that they have that figured out.

– “This case is about much more than contraception. It is about the principles of liberty that animate our Constitution.” Indeed! Which is why the IWF’s arguments should be rejected.

– Well, I’m sure if we let McMorris Rodgers get away with using public money for her campaigns (Seattle Times link), she won’t do it again.

– Let people play soccer in a hijab, for goodness sake.

– From Hans in the comments, this certainly helps explain trolls.

Huh. I’ve got this nagging feeling that there’s something missing from the Seattle Times editorial board’s list of things we need to do to attract and retain corporate headquarters:

Support and fund education for students ages 3 to 23. Raise the quality of and reduce inequity of access to pre-K, K-12 and higher education. Protect and enhance the area’s vaunted quality of life and make strategic investments in transportation. Continue to promote a civic culture that values innovation, diversity and tolerance.

Oh. Yeah, that’s right. They forgot to mention the money it takes to pay for all these great things.

It doesn’t take much courage to argue for expanded funding of pre-K, K-12, higher education, transportation, and other public investments that improve our collective quality of life. I do it all the time. But what’s consistently missing from the editorial page of our state’s paper of record is support for raising the taxes necessary to pay for these things. It’s as if there is only one side to the financial ledger—the spending side—and it would be absolutely crazy to even mention the topic of revenue.

I mean, if attracting corporate headquarters provides the strange logic you need to put you over the top in support of universal preschool, fine by me. Whatever floats your pre-K boat. But then what’s so wrong about taxing the incomes of highly paid executives in order to help pay for all the public investments that draw them to the region? Washington does have the most regressive tax structure in the nation, after all.

Without the mention of revenue, the editorial comes off as scolding the rest of us for stingily refusing to invest in the things corporate executives refuse to pay for. Weird.

– I usually like it when national and international orgs mention Washington, but boo to having disasters bad enough for that in Snohomish County.

– What would you like to see from the next SDOT director?

– The video above shows the strange procedure that takes place on Sunday mornings in Father Nary’s church in Carnot. The Muslim refugee families clear out of the sanctuary so that area Christians — many of whom may share the anti-Muslim sentiment of the “Christian” Anti-Balaka militias — can come to celebrate Mass.

– Don’t turn off Twitter, national leaders.

– Purity culture needs to be exposed for everything that it is, everything it teaches, and everything that it does to the women and men growing up in it. I understand the you have GOT to be kidding me reaction, but this is not something that can be so easily dismissed.

– They are taking a lot of handouts in the financial districts of various cities.