From: multicultural and minority small business owners of Seattle
To: Mayor Ed Murray
Thank you, Mr. Mayor, for sharing your time with us to evaluate and learn of our concerns, thoughts, and positions regarding the proposed $15 minimum wage and its affect on the immigrant community, minority groups, and small businesses working and living in Seattle. As a community, we have grappled with the proposed $15 minimum wage. The topic of discussion varies. Will I lose my job?
What measures can we take to sustain our business without cutting jobs? Whose hours are we going to cut? What positions can we do without? What is a fair compensation or pay raise for those who have been with us for many years and are now working at the same wage as new hires, if this passes? Which sub-group will this policy help or make worse? Are there measures to protect both employers and employees should this policy fail? These questions have been at the forefront of our minds and our employees’ minds. We view this issue not only from a financial standpoint, but, more importantly, the affect it will have on the immigrant community at large.
Like many small business owners faced with this possibility, the financial cost to our businesses will be staggering, considering our low profit margins and the proposed 40 percent increase in wages — without factoring payroll taxes and compensations. However, our main concern is that if this policy becomes effective, the people who will be hurt the most are those within minority and immigrant communities.
Large portions of our staffs are immigrant workers. These are people who come to this country with very little skill or English proficiency. They arrive at our various businesses seeking jobs because we provide a landing zone for them to get their foot in the door and learn valuable skills. Some have even gone on to open their own businesses. Long-time staff members are quick to take them under their wing, showing them bus routes and how to get to and from work, where to do their grocery shopping and find child care facilities, and explaining some of the available community services.
We are a collection of small businesses, but we are also a family of immigrants working to support one another. The argument with $15 Now has always been that the increased pay will reduce turnover, improve efficiency, and provide a better pool of skilled workers. We believe if passed, this may very well be true. As business owners, if faced with paying $15 per hour for an individual from a pool of better-skilled and more experienced workers — over an immigrant with little experience or training, who cannot speak English — that to maximize our bottom line, efficiency, and economy of scale we will opt to hire the more experienced individual. If “survival of the fittest” prevails with this minimum wage increase, where will the unhired go? Who will hire the unskilled workers, the non-English speakers, and the inexperienced employees who cannot operate machinery or handle menu tickets because they cannot read or write?
Many immigrants arrive in this country seeking the American Dream. Many of us have had to overcome adversity, hardship, and persecutions in order to arrive in the United States. As a result, an immigrant’s work ethic is very different and more family dependent when it comes to business ownership and employer/employee relations. Immigrants work hard and depend on their kinsmen who have arrived before them for a chance at the same pie. The $15 minimum wage is going to cost jobs. Some people are going to get a raise and some people are going to lose their jobs completely or not get hired at all. This is a decision that should not be taken lightly, and one we would rather not see.
To take jobs away from people who are just starting out, or to force small, family-owned businesses to close their doors because they cannot absorb the increase in wages, would be an irretrievable mistake.
The $15 Now debate routinely portrays business owners as greedy and selfish. It holds onto the idea that we do not want to provide a better life for our employees. This is far from the truth. As small business owners within the immigrant community, we act as the job, language, and social training centers for new immigrants. We are the first to step up to the plate to provide community service, fundraising, and support for all causes, small or large. With little support from large financial institutions, we are the ones our employees turn to for a small loan or pay advancement in cases of emergencies, with no guarantee of return. The $15 Now campaign was born out of frustration for the McDonalds and Walmarts of the world. Being small business owners, we are not sitting on a mountain of profit. We worry every day about cash flow. We forego our own pay to make payroll, and we mortgage our homes to finance our businesses and dreams.
We believe that everyone deserves a fair wage for their hard work and should get compensation based on skills and experience. 15 Now has opened the debate on income inequality, and we support the continuation of that debate in a manner that is responsible to both the employer and the employees.
To speak of an accelerated increase in minimum wage, with no consideration for the following items as part of the pay increase, would be irresponsible. It would place the sole burden of a city’s societal responsibilities on the backs of small business owners.
Proposed solution that the multicultural and minority business owners would like included in the $15 minimum wage increase package:
1. Upon the ratification and mandate of the policy for wage increase, Seattle’s minimum wage increase should start at $10.35/hour, not the proposed $15/hour.
2. There should be a phase-in time from $10.35/hour to $15/hour. This phase-in time should be no less than 10 years. Incremental increases should be done on an annual basis.
3. Total compensation should be considered, including tip wages, health benefits, vacation pay, employee discounts and meals, and job and skills training.
4. A waiting period of 3-6 months for entry-level positions, during which an employee is paid the State of Washington mandated minimum wage of $9.32/hour. Upon completion of the training and waiting period, and upon a mutual employment agreement, the employee’s wages would be raised to current City of Seattle mandated minimum wage.
5. A B&O tax credit for small businesses with 75 employees or less.
6. After three years of the mandate, and every two years thereafter, the City of Seattle will conduct an economic study to show the effect and result of the policy on the following key indicators, among others. If the results show conclusive adverse effects on the city’s economy, employment rate, and social services, then the city’s minimum wage increase law will cease.
a. Closure rate of Seattle-owned businesses
b. Inflation within Seattle
c. Housing market, specifically in low-income areas, to see if increase in wages directly correlates to higher ownership of homes, increase in housing rentals, and sales
d. Increase in employment or unemployment rate
e. Effect on the immigrant community, specifically the rate of business closure, poverty rate, immigrant employment/unemployment, immigrant increase/decrease in dependency on social services such as Medicaid, welfare, food stamps, childcare subsidies, and utility subsidies
Mr. Mayor, like you, we are frustrated with big businesses for staying mum and not stepping up to the plate to address income inequality. However, your fight should not be with us. Today, there are more registered minority businesses in Seattle than any other type. We make up a giant portion of Seattle’s economy. This policy will have a ripple effect going forth, not only on the multicultural communities, but on Seattle’s economic future. Thus, we implore you to look beyond the statistical numbers and data, and look at the human impact this policy will have on Seattle’s immigrant community. We feel that the data and research presented by the advisory board have not fully addressed this significant and important population that is a major part of Seattle’s vibrancy and diversity.
Thank you. (end)
Lee Ching Tran
I very much appreciate and agree with this well written piece. I have similar concerns and thoughts as do a lot of other people. I don’t believe that being the Mayor of Seattle should strictly be a “popularity” contest. Sometimes you must use common sense and I fear that should we get a $15 minimum wage in Seattle, common sense will have been tossed out of the door.
Jemma Nelson says
Regarding some of your points:
3: You can’t pay rent or buy groceries with “job and skills training.” That’s just an excuse to price the cost of your “training” at $5/hr and pay them the same old wage.
4: This is an attempt to treat workers as disposable assets, churning through them every 3-6 months. If you’re not happy with their performance, you can hire a replacement.
6b: Of course this will lead to inflation. Prices *will* go up – but the people buying your goods and services will be even more able to afford them. If your prices have to go up by 10%, but consumer income goes up by 30%, you will sell more. But if you only look at inflation as a metric (and ignore consumer purchasing power, which is what actually matters), 15Now is going to look like a bad deal.
15Now is a good thing for businesses – especially small businesses. The adjustment period will be a little rough, but it’s going to be a good thing in the long run.