Submitted by Darren Smith, Guest Blogger
The City of SeaTac Washington enacted a proposition narrowly approved by voters (77 vote margin among approximately 6,000 total votes) that would, among other issues, raise the minimum wage of hospitality and transportation workers to $15.00 per hour; one of the highest in the United States. The minimum wage for Washington State is $9.32 and the highest among all fifty states. Supporters of the proposition argued the cost of living for those workers is forcing them to live in substandard lifestyles given their working environment and lack of benefits provided in these industries. Opponents argue the law would put an unnecessary burden upon business and force cuts in employees and a disincentive to operate within the city. Much controversy has been generated on all sides.
There are and estimated 1,600 transportation and hospitality workers employed in SeaTac and 4,700 within the Port of Seattle; mainly serving the airport. The ordinance has sparked much controversy on both labor and business interests and could have an affect on other cities throughout the state. A recent superior court decision also has invalidated a significant number of employees working in SeaTac.
The ordinance is SeaTac Municipal Code Chapter 7.45.
SeaTac is located in the vicinity of Seattle-Tacoma International Airport (SEA) south of Seattle. Adjacent to the airport, on International Boulevard, are a large number of hotels, motels, car rental agencies, and long term parking businesses that support travelers. The businesses subject to the ordinance generally are represented in the North American Industry Classification Codes (NAICS) as follows with some exemptions for small motels:
- 485999 All Other Transit and Ground Passenger Transportation
- 488119 Other Airport Operations
- 488190 Other Support Activities for Air Transportation
- 488510 Freight Transportation Arrangement
- 532111 Passenger Car Rental
- 561720 Janitorial Services
- 721110 Hotels and Motels
- 722310 Food Service Contractors
- 722410 Drinking Places
- 722514 Cafeterias, Grill Buffets, and Buffets
- 722515 Snack and Nonalcoholic Beverage Bars
In addition to the wage minimum, adjusted annually for inflation, the ordinance provides a one hour sick and safe leave benefit per forty hours of work with a cash value to be paid at year end. Also there is a provision the employers must offer extra hours to part-time employees before a full time position is created. There are also provisions for employer/employee oversight related to labor relations.
The crux of the proposition was to provide this wage and benefit program both to employees outside the airport and those within the airport. However, recently the Superior Court of Washington for King County struck down the ordinance in part. In BF Foods, LLC, Filo Foods, LLC, et al., v. City of SeaTac, et al., (13-2-25352-6 KNT) Judge Andrea Darvas ruled the ordinance violated Revised Code of Washington 14.08.330 which declared the Port of Seattle which Seattle-Tacoma International is located and a state chartered municipality, had exclusive jurisdiction and the ordinance applying to this area was void declaring: “The Washington State Legislature has clearly and unequivocally stated its intent that municipalities other than the Port of Seattle may not exercise any jurisdiction or control over SeaTac Airport operations, or the laws and rules governing those operations.” Judge Darvas further decreed certain portions of the ordinance relating to employees suffering adverse actions for union activity or retaliation and such was pre-empted by federal labor law and void. Most of the remaining parts were upheld. Supporters of the ordinance promised a direct appeal to the state supreme court.
A few airports have labor rules similar to that of SeaTac. San Jose Airport workers are guaranteed health insurance and a $13.82 hourly wage. Los Angeles International workers receive $10.91 and health benefits.
Organized opponents to the SeaTac ordinance were mostly from businesses. Plaintiffs in the lawsuit included Alaska Airlines which has its main hub at Seattle Tacoma International. In 2005 Alaska Airlines terminated 500 unionized ramp workers and re-hired some as lower wage, non-union workers. Recently, Alaska Airlines spokesman Paul McElroy stated: “Alaska Airlines believes in fair pay and benefits for all workers, and we respect every worker and the job they do…This lawsuit isn’t about $15 an hour. It’s about an initiative that violates state and federal law.”
Local businesses have spoken out as well. Han Kim, who manages Hotel Concepts which manages eleven hotels in Washington stated he and his business associates decided to shelve plans to construct a new hotel on land they own in SeaTac. They currently have three in SeaTac. Kim stated “Uncertainty is bad for business, and right now we’re right in that area so we’re just putting everything on hold” The American Car Rental Association estimated five percent of workers’ jobs would be cut along with another five to ten percent who will be replaced by more experienced workers. A manager with Dollar Rental Cars spoke of outsourcing some functions along with cutting staff.
Ramifications and benefits are certain to be brought by this ordinance, some short term and others into the future. A higher standard of living is a simple but important issue to those workers having more of a livable wage and provided benefits for their families. And most would agree with that. But what could be some of the long term issues that might affect those workers, their employees and the community?
Essentially an island of wage disparity has been created in the King County which SeaTac is located. Workers outside the city limits performing the same tasks as covered workers inside are paid sixty percent lower if paid at minimum wage. Moreover, almost an archipelago of islands are within the city itself. Those in other service industries and manufacturing who can work just as hard as transportation and hospitality workers are not given the same wages and benefits in the same city. Workers in the hotel industry who work at smaller locations are exempt from this benefit. Would this be considered equitable? Is it fair for some semi-skilled or low skilled jobs to be paid differently based upon lobbying efforts by some groups and where workers might or might not have union representation?
Businesses in SeaTac are at comparative disadvantage to those a few miles away. With the possibility of sixty percent higher labor costs in industries that are labor intensive and have low margins some SeaTac businesses could be priced out of business. Consumers are also likely to bear the burden of this as costs are transferred to the customer. If businesses depart or do not locate in the city SeaTac can face decreases in taxation. There is also a regulatory cost that can be had if a patchwork of cities enacts differing labor laws and this can negatively affect businesses that have to account for many locations rather than simply relying on state law.
It has been argued that with increasing wages comes increasing quality of services, workers with more earning power buy more goods and services which increases revenue to businesses, government, and other workers.
There are, however, other analogues in Washington where wages differ officially based upon location. One example is Prevailing Wage as defined in Chapter 39.12 RCW and Chapter 296-127 WAC. Essentially certain occupations hired for public works and contractors bidding for projects of the State of Washington must provide minimum wage and benefit levels for workers. Each county has a prevailing wage rate that is assigned for that region, there are underlying rates for trade levels such as journeymen or apprentice for numerous trades and in fact some are even more granular as in the case of commercial divers who receive hourly premiums based upon depth of each dive. See Washington Department of Labor and Industries prevailing wage calculator for details.
It is clear this is new territory in Washington State and other cities might follow suit. But it also represents some challenges that might require time to address.
What do you think?
Sources
Reuters
Fox News
City of SeaTac Municipal Code 7.45
Superior Court of Washington [13-2-25352-6 KNT]
Revised Code of Washington
Washington Administrative Code
When I was a juvenile probation officer I had 2 kids on my caseload from the same family. One was Anthony, the other Tony. That experience is helpful w/ the new Dave[welcome!] and David.
Dave,
May I suggest you read the entire thread.
David and I have NOT been discussing wage issues. We were discussing civility issues.
Well, pdm, exactly what was yours? Because I read a lot of words and not a lot of substance. If you’re arguing pro min wage, which it seems like, where’s your facts? I provided & am willing to provide multitudes of articles/stats on why price control does not work. You proceed with vaugeries that don’t add to or make your point. I’m not saying your point is invalid or wrong, or that it doesn’t matter, but if you’re going to pick on “David” say something of substance.
Dave, Im just an ordinary guy. I have no aspirations to sound intelligent and there are folks here (or who once were here) who can do rings around anyone who would attempt word play. Best I can hope for is to sometimes have a point.
Well, pdm, still kinda hard to see your point other than word play. Sounding intelligent is nice if you have a point.
Lol well while I do apologize if I’ve been harsh, it’s very difficult to see your point from any other angle than a charities.
Dave, you mischaracterize my comment. There was no sarcasm. None.
Dave writes:
[Well now I feel like a dick lol but I still strongly if not vehemently disagree with your point.]
Dave: It is OK to disagree. As mentioned before, disagreements are parts of our learning process.
Well now I feel like a dick lol but I still strongly if not vehemently disagree with your point.
Sob stories about today’s loses say nothing of economic calculation, risk, or the root of the point, wages. Your feelings/stories are irrelevant to real economics. You lose today to gain tomorrow is a calculation, or vice versa, it’s all a losing proposition if you arbitrarily dictate wages. This is a nonsense argument, lets all just pretend all businesses have huge margins & that the people who own them take no risk in doing so. Then, lets watch it collapse or be destitute like the obvious & failed socialist states of Russia, Cuba, etc.
Dave writes:
[Teji leaves out all the important facts about owning a business l, minimum wage is just that the marginal worker, period. These people are low/no skilled people aka wal-mart greeters. There’s nothing wrong with that job, but would a business that has a small profit margin really pay that for someone who essentially says hi? The question answers itself, they fail to see the bigger picture of people who make the calculated risks of a profit loss model. If life were monopoly I could see Teji’s point, but it’s not, these people have to take real life risks, commenting about how a company makes such a profit says nothing about the risk they take to lose said money. It’s sheer ignorance of economics and risk, in my humble opinion.]
Dave: Let’s agree to disagree. The thread is about increasing the minimum wage, otherwise people like you and me pay them via SNAP–Food Stamps. Most of the Walmart workers including the managers are on food stamps and the same goes for the fast food industry.
I will not challenge your business/ economics sense about it.:-)
Teji Malik wrote: “The thread is about increasing the minimum wage, otherwise people like you and me pay them via SNAP–Food Stamps. Most of the Walmart workers including the managers are on food stamps and the same goes for the fast food industry.”
Ten years ago, anybody on minimum wage would generally not qualify for food stamps. Today, someone working a full time job for minimum wage might get about $49 in food stamps. It could be higher or lower based upon specific circumstances.
Food stamp benefits are too high IMO. They need to be brought back down to pre-Obama levels.
What you mention about wages in franchises like McDonalds and Burger King is interesting. The major corporation sets wages which you must abide by. I can see how that is a problem. Minimum wage would certainly be a way to force a fix in your case. You want to raise wages, but the corporation managing your franchise will not allow it. Minimum wage would be a way to force them to let you raise the wages you pay. When I have more time, I hope to investigate more about how these franchises work in this regard. You make a compelling argument.
Well you did a good job answering my obvious refutation of your petty argument, you chose to not pay yourself in order to make your business successful. This is calculated risk!! You assumed personal loss in order to make future gains, I mean c’mon man, you should see the fallacy in your argument.
davidm2575 writes:
[That is exactly what many small business owners have to do. I have worked many, many hours for zero pay because I could not afford to pay someone to help me. Even when I started hiring people, I would pay them while I worked for nothing more than the hope that one day I would be able to pay myself if I kept at it long enough. Back in those days, I relied on the income from my wife working to pay our personal bills. These days, her job is our household.
I had a young man not long ago ask me if he could work for free just for the experience. He was living with his mom who paid his expenses. He wanted to learn my business, prove he could do the work and eventually get paid for it. I would have loved to have done that, and if I was allowed, I could probably enable him within short time to earn a fair $50,000 a year income, but the law does not allow me to do that. I basically have to save up a year or two salary for the guy before I can afford to hire him. Entry level jobs at low pay enable a business owner to weed out those who he can provide a productive environment for and those who he cannot without losing the shirt off his back. Ultimately getting rid of the minimum wage would help our economy tremendously.]
David: Come on. Let’s be honest here. You are a small businessman like I am and there is no such thing as, “I would pay them while I worked for nothing more than the hope that one day I would be able to pay myself if I kept at it long enough..”
Who put gas in your car if not your small business?
Who brought groceries home if not your small business?
I can go on and on. There are many ways small businessmen pay themselves and after the end of the year they get refund IRS for all the deductions. Stop kidding yourself.
Teji Malik wrote: “Who put gas in your car if not your small business?
Who brought groceries home if not your small business?”
I mentioned that I relied upon my wife’s income at the time. She is a CPA.
Teji leaves out all the important facts about owning a business l, minimum wage is just that the marginal worker, period. These people are low/no skilled people aka wal-mart greeters. There’s nothing wrong with that job, but would a business that has a small profit margin really pay that for someone who essentially says hi? The question answers itself, they fail to see the bigger picture of people who make the calculated risks of a profit loss model. If life were monopoly I could see Teji’s point, but it’s not, these people have to take real life risks, commenting about how a company makes such a profit says nothing about the risk they take to lose said money. It’s sheer ignorance of economics and risk, in my humble opinion.
Bron writes:
[DavidM:
I would love to see that myself, take one state and do pure socialism and another state and do pure capitalism and see which one prospers.
Actually its been done, but not quite pure on either side, East and West Berlin. West Berling thrived and they had to build a wall in East Berlin to keep people there.
Since the principles are what matters, there is little doubt in my mind how things would go. There would be a mass exodus from the socialist state and a mass migration to the capitalist state after a period of time.
The only difference would be here, the socialist state couldnt put up a wall with guard towers, machine guns and mine fields to keep the slaves er citizens confined.]
Bron: You are confused between communism and Socialism. East Germany was under the communist rule where as West Germany- now Germany- was and is a socialist country and like many other socialist countries in Europe, they are one happy lot. Yes, it is still difficult and time consuming for the ex- West Germany to absorb all the ex- communists in their economy but things are getting better. Chancellor Angela Merkel hails from the Eastern part as I am sure you are aware of it.
Teji Malik wrote: “East Germany was under the communist rule where as West Germany- now Germany- was and is a socialist country and like many other socialist countries in Europe, they are one happy lot.”
You may want to edit the Wikipedia entry if you think they have it wrong.
Wikipedia says:
“During this period, the NATO-aligned West Germany and the socialist East Germany were divided by the Inner German border.”
“The West German government was known to be much more decentralised than its state socialist East German counterpart, the former being a federal state and the latter a unitary one.”
http://en.wikipedia.org/wiki/West_Germany
Teji Malik wrote: “…now Germany- was and is a socialist country and like many other socialist countries in Europe.”
Germany has the oldest universal health care system, but its form of government is not considered to be socialist. It is categorized as a social market economy, which is something between laissez-faire economic liberalism and social democratic mixed economies. Social market economy is also known as Rhine Capitalism which is closer to the American capitalistic market economy than what most of us think of as socialism.
From Wikipedia:
“Germany has a social market economy with a highly skilled labour force, a large capital stock, a low level of corruption, and a high level of innovation. It has the largest and most powerful national economy in Europe, the fourth largest by nominal GDP in the world, the fifth largest by PPP, and was the biggest net contributor to the EU budget in 2011.”
http://en.wikipedia.org/wiki/Germany
A social market economy is distinguished from socialism.
“Social market economy (German: Soziale Marktwirtschaft) is a form of market capitalism combined with a social policy favoring union bargaining and social insurance, and is sometimes classified as a coordinated market economy. It is often referred to as Rhine capitalism to stress the various similarities with the contemporary economic order in many Western European countries and Japan. The social market economy was originally promoted and implemented in West Germany by the Christian Democratic Union (CDU) under Chancellor Konrad Adenauer in 1949. The social market economy was designed to be a third way between laissez-faire economic liberalism and social democratic mixed economies. It was strongly inspired by ordoliberalism and the tradition of Catholic social teaching (or more generally, Christian ethics).”
http://en.wikipedia.org/wiki/Social_market_economy
Sorry guys/gals. I was busy all day long and as I forgot to click the notifications, I had to go through the questions but here it goes.
davidm2575 writes:
[Teji Malik wrote: “In the Las Vegas/Henderson area where I have my franchises, 97% of the workers are adults with families.”
This statistic really disturbs me. It caused me to do some more investigating about this subject. I came across the following statement that seems to be at odds with your experience:
“The popular belief that minimum wage workers are poor adults (25 years
old or older), working full time and trying to raise a family is largely untrue. Just 4.7 percent match that description.”
http://www.cato.org/sites/cato.org/files/pubs/pdf/PA701.pdf
Do you have any comment concerning the large disparity between your experience and this study?]
David: This pdf does not mention anything about Las Vegas area rather the general stats which do not mention how they were collected. In my stores 97% of the people work are with families. So, I have no idea what kind of response you are looking for through your generic stats from a right wing site who are always against the poor lot and fight against the raise in the minimum wage. I was certain you would tilt towards these sites not to seek the point in discussion but throw some powder out to fog the facts. Now, do not accuse me for impugning your character this time.:-) I have nothing against about any kind of wingers. I am only concerned about the facts as they must be presented.
http://www.cato.org/publications/policy-analysis/negative-effects-minimum-wage-laws
Bron writes:
[Teji Malik:
I would also appreciate an answer to my question above about the reason you dont raise your workers wages above minimum wage since you are probably making $100,000 to $500,000 per year per store you own.
“McDonald’s is no slouch in second place, with $2.6 million in sales per store.”
So why arent you paying your people more than minimum wage? Why are you expecting the national firm to do so?
I am figuring you sell around 430,000 burgers per year, @ 7 cents per burger, we are only talking $30,000.00. What is the big deal if you are making between 100k and 500k per store?
If I was putting $300 to $500k per year in my pocket, I would be paying more than minimum wage but then I am a capitalist and not a socialist. So what if I make $200k or $400k, it would go to taxes anyway and why not have a good work force and help them open stores of their own, h#ll help them buy them and take 10 or 15% of their profits. You could eventually be making millions in passive income and also be helping others to prosper.
And that is what capitalism is all about.]
I apologise for not seeing your question above for the reasons given. The salaries are set by the corporations with the caps and those are set through the stores owned by the corporations in the area which they do all over for this very purpose.. No franchisee can raise them at will. If they did, then employees in other stores of the corporation will flock there. This is the reason I have been asking the corporations to partake in raising the salaries which would only cost us .07 cents per burger as mentioned in my very first post.
Wow, pdm is being quite sarcastic, I’m not even sure what his/her argument is, except that they have none. So I could care less about what David says, he’s a tad long winded. I could also care less about people who try to hide behind vaugeries & double speak. Spare us your “intellect” and say something.
OS,
I agree with what you stated about civility….. The folks confuse disagreement with them being attacked personally….. You can agree to disagree and still be civil….
AY wrote: “The folks confuse disagreement with them being attacked personally.”
Au Contraire. There are civil ways to express disagreement and uncivil ways. There are good ways to express disagreement and there are better ways. We can all work on being better. I’m working at being better at it and I appreciate your patience with me.
David,
I am glad that you re-read my comment that was addressed to no one and now understand that the word “disgusting” was modifying a phrase that was understood – “It is”. As in: IT IS just disgusting.
While I will be most careful to avoid any personal attacks, I think we will disagree about if, and how, I will express my opinions about political affiliations, policies, positions or ideas. We will also disagree on what I find reasonable or logical and what you find reasonable and logical. For instance – this thread states many opinions that I find completely crazy. I use words like “crazy” and “disgusting” alot. Keep in mind that It is my intention to describe how I feel about the “thing” not the person but I am not a rhetorictian. My arguments may not satisfy as yours may not satisfy.
That’s the way life works sometimes, eh?
Teji Malik:
I would also appreciate an answer to my question above about the reason you dont raise your workers wages above minimum wage since you are probably making $100,000 to $500,000 per year per store you own.
“McDonald’s is no slouch in second place, with $2.6 million in sales per store.”
So why arent you paying your people more than minimum wage? Why are you expecting the national firm to do so?
I am figuring you sell around 430,000 burgers per year, @ 7 cents per burger, we are only talking $30,000.00. What is the big deal if you are making between 100k and 500k per store?
If I was putting $300 to $500k per year in my pocket, I would be paying more than minimum wage but then I am a capitalist and not a socialist. So what if I make $200k or $400k, it would go to taxes anyway and why not have a good work force and help them open stores of their own, h#ll help them buy them and take 10 or 15% of their profits. You could eventually be making millions in passive income and also be helping others to prosper.
And that is what capitalism is all about.