It could use a thorough fisking, but it’s a beautiful sunny Saturday, so I don’t want to waste more than a few precious moments calling bullshit on the Seattle Times‘ latest bullshit editorial: “Redefine franchises under Seattle’s minimum-wage proposal.”
The politics of this decision is clear. Seattle is the first city to move swiftly toward a $15 minimum wage, but not the last. National labor activists will export the model created here. Treating franchises as what they are — small businesses — would eliminate the opportunity to burn [McDonald’s CEO Don] Thompson in rhetorical effigy elsewhere.
Well, the editors are half right. The goal always has been to export the model created here to the rest of the nation, so labor negotiators have been careful to avoid creating any anti-worker precedents. But the provision determining the size of a business based on the total number of FTEs of the national chain rather than that of the individual franchise or retail store has nothing to do with burning the McDonald’s CEO in effigy. It’s all about protecting the interests of the fast food workers whose courageous walkouts first sparked the $15 minimum wage movement.
Under the currently proposed ordinance, all fast food workers would be phased in to $15 by 2018. Count franchises as separate small businesses—as the Seattle Times proposes—and no fast food worker would be fully phased in until 2025. That’s bullshit.
While it is true that local franchisees operate as individual businesses, it is totally misleading to downplay their close connection to the national chains. Giant, multinational corporations like McDonald’s and Subway have defined the low-wage business model on which their franchisees operate. Seattle’s $15 minimum wage law puts pressure on local franchisees to put pressure on corporate headquarters to readjust that model so as to accommodate paying a living wage.
Do you really think that these national chains are going to abandon Seattle? Of course not. They will be forced to find a way to help their franchises here thrive, despite paying higher wages.
And that is a model that we sure as hell want to export to the rest of the nation.
Seeing as how Mick-D’s has no problem paying 21$ an hour 15$ shouldn’t be so hard on them.
http://www.kcet.org/living/foo.....-hour.html
Ain’t it beautiful today? :-) So, quickly ….
1. If you are a small business person who decides you want to go the franchise route, you get what you get; they own your business model and you live or die with that model while the corporate parent rakes it in.
2. If you are a small business person whose primary hope for success is built on the premise that your employees must expect to not earn enough to live so you can be a going concern, then fk you.
Look, running a business is hard. But today’s business owners either need to find a way to get onboard with paying a living wage to their employees or do the work themselves.
And by the way … “pet groomers”? Of all the businesses in Seattle how relevant is the pet grooming industry?
Fast food workers are simply banding together and saying, “We want $15 an hour for our labor.” What’s wrong with that? Don’t they have a right to decide what their labor is worth?
“Do you really think that these national chains are going to abandon Seattle? Of course not.”
No they won’t abandon Seattle, but Seattle might lead the nation in fast food automation, much as has happened in other high wage countries. Does the person ordering a Big Mac care if they have to order from a person or a machine?
@4 How many times have you recycled this bullshit argument in these threads? Go ahead, replace humans with robots. When they do, who’s going to buy their cheeseburgers and fries? An economy without workers is an economy with no customers.
So, to avoid paying a human burger flipper $15/hr instead of $9.35/hr, the local McD’s franchise is going to spend $250,000 on a burger flipping machine, and then pay somebody $30/hr to clean and maintain it? And what happens when it breaks down, you’ve got customers waiting in line, and it’s going to take 2 days to air ship the replacement part from a distribution center in Chicago? At that point, when the laid off burger flipper gets a phone call from his former boss asking him to fill in for a couple days, he should ask for $500 a day …
We’re already seeing the fallout from the economy that cheap labor conservatives created: College graduates who can’t get jobs, small retailers going out of business, American corporations looking for profits overseas to stay alive, etc., because the U.S. consumer economy has been impaired by the relentless downsizing of American consumers’ incomes. Are we going to let cheap labor conservatives take our economy all the way down to zero? Or is it time to ignore them and vote for policies that will get America moving again?
I guess Roger Rabbit has never used one of those self-checkout machines at the grocery store ?
https://www.youtube.com/watch?v=mfKbaX4jE9U
Self-order kiosks use touchscreens to replace cashiers. Fast food chains implementing automated self-service machines include McDonald’s, Burger King, Taco Bell and KFC.
@8 Exactly my point. It really comes down to a mathematical decision for companies like McDonalds, Burger King, Wendy’s, etc. Which is a better financial decision to pay actual humans minimum wage or to replace them with machines.
Rabbit-in regards to breakdowns each store would have several machines so if one broke down it would only slow production for the time it took to get a repairman or new machine from a local distribution hub, much like how national chains like Pepsi or Coke maintain the machines in restaurants. There would be no waiting for days for a new machine to ship, it would be handled in house.
So, if the minimum wage does not rise to $15 hr, fast food chains will not automate??
Speaking of automated food, what ever happened to Krispy Creem (Kreem, Kream, Cream … , whatever).
@10, what about them ? There’s at least one location in Seattle, Aurora and 125th. Probably others. If you go there at 10PM or later doughnuts are half price.
canned press template #17: if you impose <employee benefit|unionization> then businesses will be forced to <relocate|close>
this statement-o-threat is made after every hint of providing for workers rights or representation. (oh… ‘sick leave’ if you need a recent example) and there’s yet to be any statistically valid indication of the threat being made real. yes yes yes… there’s always one or two cases (and/or Boeing) which are held as proof! but Seattle is booming (just count the construction cranes) despite becoming a commie workers paradise.
@ 12 our own State Treasurer Jim McIntire, a phd economist in favor of raising the minimum wage did a study on the effects of the last time there was a significant increase in the minimum wage here in Washington.
“In its study, McIntire’s team surveyed more than 1,000 employers and interviewed more than 500 affected employees. It also looked at state Employment Security data.More than 100,000 employees got wage increases in 1989 and 1990 because of the rise in Washington’s legal minimum. Over two years, employers reported laying off 11,700 workers “as a result of the minimum wage increases.” Employees reported about the same number.In other words, for every 10 workers who got a raise under the law, one worker somewhere was laid off. The most-affected employers were restaurants and bars (the law also eliminated the tip credit), particularly in the lower-wage parts of the state.”
The study goes on to point out that half of the 11,700 job loses were refilled after 2 yrs, but by older more experienced workers, meaning less opportunity for youth & minorities. So here is a very real and very local example, and Jim McIntire is no right wing source. There is definitely a very valid “greater good” argument to be made for raising the min wage, but to pretend there won’t be layoffs or any business closures is either disengenous or ignorant. Much like businesses that claim it is the economic apocalypse, is equally disengenous.
@13 so your phd-economist (and we know their batting average, particularly of late), rather than suggesting anything “disengenous”[sic] in my humble statement, actually confirmed that statistically business did not close or relocate following improved regulations for workers. so, huzzah!
now onwards to reviving the moribund union system.
Isn’t “independent franchise” something of an oxymoron. Seems advocating some kind of special treatment for national chains (many of which…hmmm…buy significant advertising space in Uncle Frank’s Fish Wrapper) constitutes a smack in the chops to truly local businesses. Blethen keeps this up and the next thing he knows Canlis’ will be making him wait for a table.
@14, it does show layoffs, which was my point. Fastfood establishments now have greater incentive to automate. Will they, time will tell and I don’t know the future. As far as businesses moving to cheaper labor, if you don’t consider Boeing, the regions largest employer, as statistically significant then there is no bigger example that would convince you since they are the largest employer. Seems contradictory to call the regions largest employer not a significant example.
What will the City Attorney say about litigation and precedent? 80% of McDonald’s stores are franchised.
A bunch of those are owned by people who have multiple stores and won’t count as ‘small’ because the aggregate number of employees is too high.
There may be sales of franchises from the aggregators to their up-and-coming managers, to create smaller franchise companies, which then get around the law by having fewer employees. This means more business owners, which is good for the middle class.
If there’s precedent, and if the City is sued, there could be a huge mess, and large awards to businesses illegally forced to go out of business.
This should be fun.
@17, You made the correct decision not to pursue a career in law.
8, 9 – When all the customers are unemployed, what will businesses replace them with?
The most basic duty of government is to protect its citizens, including protecting them from from predatory employers and market failures. As we all know from bitter experience, markets are far from perfect.
@18 I’m not so sure I’d want him to be my doctor either.
The more I listen to cheap labor conservatives whine about paying workers a measly $15 an hour, the more convinced I am that workers need government protection from these assholes.
Don’t like what you are being paid…change jobs.
@23 I have a better suggestion — don’t work! Be a capitalist instead! It’s a lot easier, and pays a lot better. Work is disrespected and underpaid in this country, because of America’s weird fetish with rentiers, financiers, and entrepreneurs. Consequently, flipping stock is far more lucrative than producing something useful.
@16 you gotta be kidding me:
WILL KEEPING WAGES LOW PREVENT COMPANIES FROM AUTOMATING? You didn’t answer the question from @10
If hamburger flippers are going to get $15, then us skilled workers out there are going to be looking for something in the $25 to $35 per hour range. Bring it on! It’s about time we got the raise we deserve!
@ 24 Pistol Annie I did answer the question to the best of my ability in comment 16.
” Fastfood establishments now have greater incentive to automate. Will they, time will tell and I don’t know the future. ”
So yes companies will still automate even if wages are low. A large wage increase will accelerate this automation schedule. Because it make the return on investment schedule shorter. Example a ordering kiosk at McDonalds costs $25k lets say, and at $9.32/hr it would cost McDonalds $19,385 to man the same position with a fulltime employee. So maybe they don’t automate at a cost of -$5,615, and they don’t until the ROI is on the plus side of that equation. Change the hourly to $15, and now the ROI is +$6,200 in the first year alone.
Whether or not they automate wasn’t my point so much as there is increased incentive to automate by higher labor costs (unless we think McDonalds shareholders are willing to make less profit?). There is evidence in Europe in Countries with higher wages, that yes companies like McDonalds will always look to cut costs including labor to maximize profits.
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I see. So impending automation gives workers increased incentive to fight for a higher wage. Their livelihood/families/well-being are worth it.
I mean, why quietly go down, without a fight?
Not all fast-food CEO are acting like Chicken Little about minimum wage hikes. Subway’s CEO openly stated they are “not a big deal”:
http://www.huffingtonpost.com/.....83565.html
“Over the years, I’ve seen so many of these wage increases… I think it’s normal. It won’t have a negative impact hopefully, and that’s what I tell my workers… If I were in charge of the government, I would index the minimum wage to inflation so that way everybody knows what they can count on. The employees know they’re going to get increases on a regular basis. The management knows that they’re going to have to pay a little bit more.”
So, yeah… labor is just a cost of doing business you pass on to your customers. Just like a spike in the price of beef. Big deal. Make it something management can predict and move on.
@ 30
Not all fast-food CEO are acting like Chicken Little about minimum wage hikes. Subway’s CEO openly stated they are “not a big deal”:
Context, as always, is important.
You quoted Subway CEO in an article discussing the national minimum wage increase proposal ($10.10/hr), although that article said nothing about Seattle and $15/hr.
If Subway’s CEO had said he had no problem with $15/hr, that would be relevant to this thread topic, which is SEATTLE’s new minimum wage. He didn’t.
What was he quoted as saying?
In an interview published Wednesday with CNBC, Subway CEO Fred Deluca said he is “not concerned” by the idea of federal minimum wage increase, since it would affect rivals companies just the same and not put anyone at a “particular disadvantage.”
A $15/hr minimum wage just in Seattle (and Seatac) doesn’t affect rivals, or those who choose not to do business in those municipalities.
In other words, what the Subway CEO said is not relevant to what is happening locally. Indeed, if you actually click through to the interview initially published on CNBC’s site, here’s the question to which he replied:
How would you see the impact of a potential federal minimum wage increase? Are you concerned at all that the federal minimum wage could go up?
People living in Vancouver make big-ticket purchases in Portland to avoid sales tax. People working in Portland live in WA to avoid some of what Oregon levies in taxes of its own. People modify their behavior as a result of differences in costs. Seattle’s labor costs, which may or may not pass through to the consumer, are about to go up in a far more substantial manner than the proposed increase in the federal minimum wage.
We’ll get to see the results of Seattle’s minimum wage experiment in due time. Meanwhile, efforts to levy employee head count taxes and increase parking costs to Seattle shoppers continue apace.
@31 The “context” is this: Cheap labor conservatives (like you) will fight ANY wage increase, no matter what it is. If it’s an increase from $9.32 to $15, you’ll fight it. If it’s from $7.25 to $10.10, you’ll fight it. If it were from $4.50 to $4.55, you’d fight it. Your arguments will always be the same: Raising wages will cost jobs, prompt businesses to automate, blah, blah, blah.
My response: If you don’t like minimum wage raises, then let’s raise it to a reasonable level and index it to CPI, and then we won’t ever have to revisit this issue again, it’ll be done for once and all.
I’ll be damned if any independent pet groomer I’ve ever patronized didn’t have the owner as its principal employee. I don’t know about barbers, but women’s hair stylists make a great deal on a per hour basis, and the labor structure of most salons seems to preclude putting stylists on a specific 40 hour per week schedule. I doubt a $15 minimum wage will affect that arrangement.
As to home health aides: The health care industry has been promising for years that going into that field is a move toward the middle class and income stability while paying minimum wage to people who need some degree of vocational training to clean up literal shit. Paying $15/hour is the very least they can do.
Don’t forget nursing homes. The CNA’s (certified nursing assistants) employed by nursing homes are all minimum-wage (or a few cents above), and there’s a lot of them, so while attention has been focused on fast food workers, this is a major low-income group that will get a pay bump, with most of the money for it coming from the Medicaid program. That means more federal money coming to Washington, being paid to workers, and going into the local economy.