Measure R might kill Eureka jobs?

mimimum wage

Not in 13 states that have tried it!

 

 

Bill Holmes a big supporter of Eureka’s Measure R  passes this story along:

Fast Food CEO Says Minimum Wage Hike Kills Jobs. Not in 13 States.

July 8, 2014

by Terrance Heath

Fast food CEO Andy Puzder says that raising the minimum wage will harm workers and kill job growth. A new study of the 13 states that have tried it – including eight states where Puzder runs restaurants – says otherwise.

Andy Puzder, CEO of CKE Restaurants, told Yahoo! Finance that he opposes raising the minimum wage because he believes it will harm workers in his industry. Puzder — who took home about $4.4 million in 2012, according to Forbes magazine— earned about 291 times what workers at his company’s Hardee’s and Carl’s Jr. restaurants earn in a year.

Puzder repeats the same old, debunked, right-wing myths about raising the minimum wage. He claims that minimum wage increases would lead to fewer jobs because, “What businesses do is they increase their prices and they move to automation so you have less jobs.” (In 2010, CKE began implementing touchscreen automation to take orders in all company-owned restaurants.)

The problem that that the facts don’t support Puzder’s claims. In the absence of congressional action, states and municipalities have  passed their own minimum wage increases, without any of the disastrous economic consequences Puzder predicts.

A Center for Economic and Policy Research study of the 13 states that increased their minimum wage at the beginning of this year knocks down the argument that raising the minimum wage kills jobs. Connecticut, New Jersey, New York, and Rhode Island passed laws increasing their minimum wage. In Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont, and Washington State, minimum wage increased in line with inflation. (CKE has restaurants in all but five of the 13 states — Connecticut, New Jersey, New York, Rhode Island, and Vermont.)

The CEPR study — which updates a Goldman Sachs analysis — shows no job loss and faster job growth in states that have raised their minimum wage. (All but one, New Jersey, are seeing employment gains.) In fact, the 13 states that have raised their minimum wage have higher rates of job growth on average than the 37 states that still have not increased their minimum wage.

Wolcott 2014 06 30 494

Puzder argues that teenagers pushed out of the market by minimum wage increases will instead be, “at home looking at posters from the last election or waiting for mom to make dinner, as opposed to being out there actually working, and getting the experience they need to go forward in life.” But 75 percent of minimum wage earners are adults.

Puzder says adults are working at minimum wage jobs because companies are reducing worker hours due to Obamacare. The “recovery” has created far more low-wage jobs than better paying jobs. It’s more likely that adults are working in fast-food and other minimum wage jobs, because they need to support themselves and their families, and those are the only jobs available.

The CEPR study doesn’t explain why states that increased their minimum wage have higher job growth rates, but it’s not hard to figure out. Minimum wage is not a livable wage in any state. Visit MIT’s Living Wage Calculator, and check just about anywhere in the country. You’ll see that minimum wage isn’t enough to cover basics like food, housing, transportation, medical care and child care. As a result, workers rely on assistance programs like food stamps to help them make up the difference. Increasing the minimum wage puts more money in the hands of workers who spend it on goods and services. That increases demand, which in turn supports existing jobs, and stimulates the creation of new jobs.

Perhaps Puzder subscribes to what I call the “Michele Bachmann School of Economics.” In 2005, Bachmann said, “Literally, if we took away the minimum wage—if conceivably it was gone—we could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level.” Bachmann’s inane point was that almost everyone would have a job if employers could pay workers even less. The 13 states that have taken the lead on raising the minimum wage show that there’s a better way to increase job growth than minimal wages for all.

Also of note locally:

Chris Kerrigan to Speak at Fair Wage Cafe, Hammond Park, July 12

by highboldtage

Supervisor Candidate and former Eureka City Council Member Chris Kerrigan will be making a short speech at our Fair Wage Café.

 Chris will speak at 3 pm.   Hammond Park 14th and E, Eureka.

 Free food, free music from noon til five pm!

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41 thoughts on “Measure R might kill Eureka jobs?

  1. All of those cities listed above did not REQUIRE a $3.00 increase in the wages in 90 Days for business’s with 25 or more employees! This is the section of this legislation that I find totally illogical. All those cities listed above phased in the increase over years. Even six months for non-profits is a major adjustment in wages. Many of us support gradual increases in minimum wages on Federal, State and even local…but it has to be a logical process, not some huge jump…..San Francisco is a good example..it took them years to get to $10.74….and the same will happen in Seattle….what kind of “magic” does Eureka posses to make this sudden change in less then 6 months?

    Liked by 2 people

    • My problem with R is it does not directly effect enough people to do much real good.

      Measure R is not perfect. But how long will it take to wait on perfection?

      I think your point is valid but considering who is likely to be paying the extra wages probably not as big a deal as it would have been if the measure effected all employers.

      Is this a “deal breaker?”

      Liked by 1 person

    • It is the stated goal of the United States Government to inflate the money supply and prices 3 percent a year. This has been the goal for 50 years. At the same time, since the minimum wage is not increased every year, every year that it is not raised minimum wage workers lose 3 percent of their paycheck (their purchasing power goes down 3 percent. 40 years of this devastates an economy. Look around.

      I know some of you will scream “fiat money” etc. True but how can we fix that? We can’t but we can raise workers wages and we are doing so.

      How would you like to work at a job where your wages go down every year regardless of how hard you work.

      Liked by 1 person

  2. 1) the “logic” of allowing so many working families with two minimum wage incomes to live in poverty is crushing local economies because they don’t have disposable income.

    2) this measure appears to only directly effect about 15 businesses, mostly big boxes reporting record profits.

    3) do you want your grandmother, dependent child, or ?? being cared for by a stressed individual trying to raise their family on poverty wages?

    4) other states, and dozens of cities are rapidly following suit as they evaluate results predicted and observed since the first minimum wage was established. This is how other social justice issues progressed in the U.S., the laws improve as they become widely adopted, ultimately culminating in national legislation that will keep full-time working people out of poverty.

    This is why I’m voting for Measure “R”.

    Liked by 3 people

    • why don’t people enhance their skills so they become more marketable and not have to take minimum wage jobs? I did. I went to school, I got skills, I made myself worth more than minimum wage. C/R has wonderful programs designed to teach job skills and increase a worker’s value so they can demand and deserve more than minimum. I don’t see the sense of rewarding mediocrity by giving a 33% wage increase for doing nothing to deserve it.

      Liked by 1 person

    • John, there is no law that says you can’t pay the caregiver to your grandmother, dependent child or ?? $12/hour so I hope you open your wallet and put your money where your mouth is. Nothing is stopping you, Sir.

      Liked by 1 person

  3. A few “Big Boxes” with over 25 Employees

    Don’s Rent-all
    Ramones
    Blood Bank (Non profit)
    Schafer’s Hardware
    Redwood Coast Regional Center (Non profit)
    Pierson’s
    HCAR (Non Profit)
    Tri County Independent Living (non-Profit)
    Humboldt Rehabilitation
    Los Bagels

    Just to name a few

    Oh, and by the way. The message here is “go work for Walmart. They pay more.”

    This thing will crush these small businesses. Talk to HCAR. 100’s of disabled citizens will lose their services. Some of these businesses are running very lean and the state isn’t giving them more money to voer the expenses.

    Think the rescue mission and blood bank have an extra 50K for wages? You people seem to think 25 is a lot of employees. Not!

    Liked by 1 person

    • Ramones production facility is outside the city limits and thus, this will not directly affect Ramones, same is true with Los Bagels. But it will affect Renner and Humboldt Petroleum, but not Big Oil and Tire since the majority of workers are not in Eureka.

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    • Why 25? Why not 100 or 10? Its a fair question and of course the number is an arbitrary one. If you ask a few hundred people how many employees does a small business have compared to a large business. I can tell you that 99% of people will answer in a range of 10 employees to 100 employees. About 65% will tell you the small business rainge is between 10 and 50. A majority will place this figure between 10 and 30. So there is a clear agreement in society as to roughly what constitutes a small business. 25 is pretty close.

      We do anticipate what we call compression right around that inflection point of 25.

      For instance, a company with 25 employees, but 10 of them part time, may choose to convert 2 part time jobs into one full time job. Naturally this will discomfort a few part time workers in this town (there aren’t that many businesses around 25 employees, there are clusters at 19 and 49 probably due to tax incentive constrictions) but that will be balanced by having more full time jobs in the community. The gross amount of employment will not change.

      As far as applying it more broadly, we agree that all workers should make a decent wage but if you read the “Tiered Minimum Wage” post it explains why we are exempting Mom and Pop businesses. Politically the tiered minimum wage is much more popular and has far less opposition than a flat minimum wage. It is a historic compromise between regulation and deregulation. In this case, the large businesses are regulated, while the Mom and Pops are deregulated.

      We understand that the number 25 is an arbitrary number. So is the traditional age of majority at 21 in our society. It is an arbitrary number. Some people are clearly ready for adulthood at 17. Some clearly aren’t ready for adulthood even at 25. But we use the arbitrary number of 21 for all. While we don’t want to take the analogy too far because we don’t believe in corporate personhood, we consider the number of 25 employees to be the number of majority for businesses. Under 25 employees, and you are a young growing business that needs flexibility. 25 employees or more and you are an adult business, with adult responsibilities in the economy, including paying a decent wage to your employees.

      I

      Liked by 1 person

    • Dire Wolf: You need to read the Measure business with 25 or more employees within the city limits of Eureka, yes? Ramones has 25 employees or more in the company. If you read the ordnance it also states individual with 25 or more employees working 2 hours a calendar week in Eureka will be paid $12.

      It will affect more than expected, I would not be surprised if Youth Services Bureau and youth summer employment will be affected. Two groups with limited funding, so will this mean not as many youth will be working this summer?

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  4. Well John, if this measure is only directly effecting “about” 15 businesses..how is it going to help the majority of working class folks in the city of Eureka? I would much rather support a city wide increase in a living wage that would increase the income for ALL workers, even if the increase was only $10-11 bucks an hour, and at a more business friendly pace. (gradually over 1-2 years).

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    • or better yet, a county wide initiative, or don’t you folks feel the people working at Sun Valley deserve a living wage too?

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    • There was this exact proposal circulated in 2008. 10 dollar minimum wage with no exemptions except a phase in. It was supported by George Clark and Linda Atkins. It failed in some degree due to oppo by local small businesses. Lots of small buisnesses like the new version because it exempts them. I do believe that all workers deserve a decent wage. This was a political compromise. It worked.
      Its a wedge issue now. Our wedge issue. Local merchants (at least the smarter ones) understand that their customers have no money.

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  5. 15 large businesses a couple of thousand workers. When their wages go up most everyone else in town will get a raise. Did you not listen to the interview of the Los Bagels rep on KIEM? It gives true Mom and Pops wage flexibility but the rising wage tide will reach into the local economy,

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    • Measure R is bad law. It only targets some business, and not the ones who employee the majority of the workers and since it Eureka only, other businesses skate. Take for example, the starting wage at Eureka Natural Foods will be $12 whereas the starting wage at Safeway and Murphy’s sits at $10 McDonalds will pay $12 and Stars hamburgers will be at $10. I started work at $1.50/hour mininum wage and I didn’t really like it so I worked hard, enhanced my skills and became a more valued worker and got a raise. Whether it is $1.50/hour or $12/hour, minimum wage means minimum work. Has anyone wondered why so much of the drive for increasing minimum wage has come from the Labor Temple? Pretty simple…labor has historically backed increases in the lowest wage rates as a reason why thy should have higher wages when it comes to contract time. If the spread between contracted wages has been $4/hour but the gap has closed with a higher minimum wage, then unions will demand contracts with wages to reinstate the $4/hour differential. Increasing minimum wages just increase costs which increases prices which causes inflation and taxes those on fixed incomes.

      Liked by 1 person

    • no, not just 15 businesses and a couple thousand workers.. That is incorrect, and last I knew, neither of the owners of Los Bagels made bagels, they weren’t economists.Large businesses on the cusp like Kohls would be more likely to leave an area of soft retail sales, high cost of distribution and now high labor costs. A 33% increase over the state minimum wage is a bad idea.

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  6. Thanks ArmChairQB for your facts! I was thinking about stores such as Schafer’s Hardware, and wondering how difficult it would be for them to increase the minimum wage to $12 in only 90 days. I was next going to contact the local non-profits whom generally I am very grateful for, asking their opinion on this measure.

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  7. I love how people can justify paying wages that equate to slavery. Suggesting that folks go to school to upgrade their skills. I guess you missed the memo. Its hard to go to school while living in your car and trying to get your kid to school and you have no place to shower and youare going deeper and deeper into debt cause your job at “xxx” pays minimum wage for just 6 hrs a day.

    Liked by 2 people

  8. If you are concerned about business fleeing Eureka you should ask yourself :has this already happened? Yes but not because of wages because of taxes. Ask yourself why all the retail in the hospital district is in lower tax county areas, They have already moved. If you are concerned about this then its time to annex Cutten, annex Myrtletown and the rest of these tax enclaves.

    Liked by 1 person

    • that is why measure R is a bad law. it should be county wide. there is such a thing as a good idea, but a bad law. reject the bad law and go back and to it right

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      • Finally! An actual Civil Debate on this proposal! Eureka City Council, should have had this discussion weeks ago.

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    • Beatrice. You are making the point for the other side. Regulations, taxes, ridiculous wage ordinances cause businesses to flee. Take a walk down 5th Street and look at all the closed storefronts. You want more to close? Because clearly if something is causing problems, we should do more of it.

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  9. There is a problem with doing it county wide first. It problably wouldn’t apply in Eureka (a charter city) and thus we would be creating a low wage island surrounded by a higher wage sea. Since Eureka is by far the biggest labor market in the county this would make no sense.

    But after Measure R passes we are going to take it county wide of course. In the meantime if this is so important go start your own initiative I will support you.

    Liked by 1 person

    • I don’t believe the issue of the Charter city. If that was the case, other county initiatives would not overlay Eureka like they do, such as the impending sales tax initiative . And Eureka is not the biggest labor market, it has a population of aprox 26 thousand in a county of 134,000. Measure R is a bad law, it isolates 20% of the population creating an unlevel playing field for all businesses and all consumers in the county.

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  10. How can we raise minimum wage and find a way to stop businesses from using the excuse that minimum wage is going up to raise all of their prices.That would be ideal to me.
    If you have a business that is close enough to going out of business from minimum wage increase you have problems with your money management, business plan or both and you’re probably going out of business soon regardless.
    I’m fairly certain Dons Rent all makes more than enough to pay all of their employees at least the proposed minimum wage, if they don’t already, do any of us know? Same goes with other larger scale local businesses listed above by other commenters.

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    • Measure R is a 33% raise in starting wages. 33%! That is a huge raise. Here you are guessing what the owner’s of Don’s Rent-All’s or anyone else can afford, but you really don’t know because you haven’t invested your life savings plus mortgaged your future to start a business. The vast majority of start ups in this area pay people minimum wage. Measure R seemingly would like to penalize those business who have become successful by mandating a wage structure without understanding costs. Its not just $3/hour. Its all the other taxes and such that are paid as a percentage of the wages–worker’s comp, unemployment insurance, and on and on. Earning a higher wage shouldn’t be the role of government, it should be and is a reward for the individual making him or herself more valuable in the market. Sitting on your ass, and whining expecting the voters to mandate a 33% raise is pretty sad. Personally, I would want to earn it.

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    • The answer is “no”. Many of these businesses pay more than $12 per hour for most jobs, but have detailers or kids working the retail counter with no job skills, making less money. There is a reason interns make zero money. It is an opportunity for them to learn and prove themselves and aspire to something better. No one needs to work a minimum wage job. If they are serious about improving themselves, they’ll get a better job. Flipping hamburgers has never paid; nor should it. As someone with kids who want a start, I’d like to see some jobs available for them, and $10.00 per hour is plenty.

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  11. DireWolf. You know what would be cool, if private industry would be more proactive in publishing their budgets. I’m not saying write a law demanding it, I’m just saying do it independently and honestly. Say this is what I’m making and these are my costs.

    Otherwise we will always be criticizing those damn public employees to a greater extent simply b/c we have their incomes.

    What do those job creators and public servants who have risked everything they own to provide a service have to lose? Possibly that although a raise may require belt tightening at the top or different management practices, it wouldn’t necessarily put the poor job creators out of business or necessitate raising prices.

    I know my experience in the local private sector during lean recent years still were greatly profitable to both owners and businesses. Employee wages stagnated while capital investments where made and/or business was sold for great personal enrichment.

    Trust me, there is plenty of benfits to those investing their life savings without the voter’s having to make sure that we are first fair to the owners then to worry if their employees can live of their wages without living on public assistance.

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  12. Maybe “Direwolf” can enlighten us how higher minimum wage increases in dozens of cities and 13 states in the last year have resulted in dire consequences.

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    • For one….it is a dramatic 3 dollar increase….in only 90 days….for non-profits, 6 months…..NONE of those 13 states have made steps toward increasing the minimum wage so quickly and dramatically, I believe most phase it in over a longer period of time.if you read all of Direwolf’s post…he makes some very valid points and one can tell his convictions on Measure R are as sincere as anyone that supports it. I am a hourly worker..not a business owner…I support increasing a Living Wage in Eureka…..i simply do not support the aggressive manner in which Measure R proposes to do it.

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    • John, thank you! 13 states, including California have higher than federally mandated minimum wages, and there is evidence that California has lost business to Texas and New York because of a lower cost of doing business, including labor costs as well as taxes. But states are big pieces of real estate, Eureka is only 14 1/2 square miles, an island in the midst of the 4,000 square miles that is Humboldt County. I think raising the cost of doing business in a town with a empty downtown is a outstanding idea. Making labor costs in retail a third higher than they are in any other town in the county would make me want to open another location in Eureka—not. I’ll stay on the plaza in Arcata and pay students $9/hour.
      I would like to know how many of those promoting this measure are local business owners. I know Costco favors a higher minimum wage because they start all their people higher than the mandated minimum wage but it is easy for them to talk..they get interest free loans from every one who shops in there as annual membership fees.

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  13. Direwolf. Read the ordinance again. This not only affects Ramones, but any business located anywhere who has any employee who works within the Eureka city limits if the total company has 25 or more employees. Yes- completely unenforceable without a monster city staff. Who this doesn’t help is the majority of minimum wage earners in Eureka- unless they happen to work for Walmart or Ramones. Wait, only the Ramones downtown. The one on the other side of Harrison isn’t affected. Madness, and you people think this is a good idea,

    I’m putting my application in at Walmart. They’ll pay more money and be the ones who survive.

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    • This is simply incorrect. It only impacts companies with 25 or more employees within the Eureka City limits. There are not a huge number of businesses impacted and it is completely enforceable. The city recovers the costs of enforcement.

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    • ArmChairQB:

      I’m sorry to hear you are desperate enough to think working for Walmart is a step up.

      I see a lot of tap dancing here to try to turn a simple act of social justice into a catastrophe of Biblical Proportions (just for giggles you might want to take a look at my article of two weeks ago. I deal with a lot of this stuff there).

      Bottom Line: After Election Day some folks will be happy, some will not. Some folks will be in the chips, some will not.

      Like the day after every Election Day there has ever been.

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    • thank you, ArmChair QB. You just helped illustrate why this is a bad law. The workers at Ramones in Old Town as well as the ones at Los Bagels will get $12/hour but their colleagues in Arcata will be paid a lower amount. I guess the same will be true for Northcoast Horiticultural Supply or any of the myriad of businesses that have retail outlets here as well as in other places. So the number of businesses affected is way over 25. You have K Mart, Lithia Dodge, any chain food place, Best Western Motel, Red Lion, Big Oil and Tire, Les Schwab, etc What a great incentive to open a store in Eureka–higher labor costs compared to Humboldt Hill, Jacobs Avenue, Cutten. It’s not madness, it is a badly constructed law, based on good intentions but without an understand of how and why business operate. My suggestion is defeat Measure R and go back and rewrite making it county wide.

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    • Again, you are comparing entire states and their experience of raising wages across an entire region to Measure R that only requires certain businesses to increase starting wages within 3 months by 33% in a relatively targeted area of 14 1/2 square miles within a larger 4000 or more square mile economic market. If indeed the backers of this measure wanted fairness, they would have made this county wide and not exclusive to larger ones, many family owned who provide wages, health and retirement benefits to many.

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  14. Direwolf. No reason we can’t err on the side of working people for once. If there turns out to be a problem with companies moving to Myrtletown, what’s say we bring it to the Supervisor’s election in 2016? I’m guessing this is more concern trolling, because it’s not like there will be a strong argument for business on this one. I think everyone agrees that $9 is not a living wage and companies are currently having to internalize profits and externalize costs in the form of public assistance for families who work for them that are trying to make ends meet on $9 an hour.

    DireWolf, for the record, if you were not so wrong on this, I’d just love to agree with you just on your name alone. Martin, where is my book, damit!?

    (warning, for nerds only)

    Liked by 2 people

    • $9/hour minimum wage will be $10/minimum wage because of state law (a 10% increase) about 90 days after Measure R would go into affect. Why not just go with the state mandates? Why try to escalate it just in the city limits of Eureka?

      Like

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