Don Boudreaux at Café Hayek points out that minimum wage regulation has long term pernicious effects because businesses anticipate that government will constantly raise the wage floor above the market price. This means that the impact of the Seattle minimum wage is not only the difference between $15 and the current market wage, but also the anticipation that an anti-business city council will continue to raise that number in the future. In response to this, employers will today try to adjust their business models -- mainly though automation -- to accommodate not only today's wage, but the $20 or $30 that will surely come in a few years.
The Anticipation Effect extends well beyond wage floors. Just a couple of weeks ago Amazon made the decision to expand its headquarters outside the city of Seattle. They did this not only because of the anti-business actions the current city council has taken, but because it had become quite clear that they could expect a tsunami of onerous regulation in the future.
Businesses are forward thinking even if government is not.
Showing posts with label Seattle City Council. Show all posts
Showing posts with label Seattle City Council. Show all posts
Wednesday, September 27, 2017
Wednesday, March 1, 2017
Philly Soda Tax Fizzles -- Just as You'd Expect
From the Washington Tines:
A newly imposed tax on sugary drinks sold within Philadelphia likely earned a fraction of the revenue its advocates had expected, city officials said Tuesday.
Philly had hoped that the 1.5 cent-per-ounce tax on sodas and other sweetened drinks would reap about $7.6 million each month for City Hall upon taking effect Jan. 1. According to preliminary data, however, the levy earned the city a measly $2.3 million during its first month on the books, or only 30 percent of what was expected, local media reported Tuesday.
Grocery stores and wholesalers alike now say they’re weighing potential layoffs to make up for lost profits attributed on the excise.
“People didn’t change what they drink,” the CEO of Brown’s Super Stores told the Philadelphia Inquirer. “They changed where they’re buying it.”
Jeff Brown, the owner of six ShopRite grocery stores within city limits, said beverage sales slipped 50 percent from Jan. 1 to Feb. 17 over the previous year’s figures, and cited a 15 percent overall dip in sales at city stores. As a result, according to Mr. Brown, he’s already eliminated about 280 jobs and is eyeing additional layoffs in the coming months.
This lesson, of course will not get to the Seattle City Council, which has proposed leaping off the same bridge. Nor will the Council stop to think about what a tax on labor (aka the $15 minimum wage) is doing to demand for labor in the City of Seattle. Nope. Seattle will continue to be a Sanctuary City for the Economically Ignorant.
A newly imposed tax on sugary drinks sold within Philadelphia likely earned a fraction of the revenue its advocates had expected, city officials said Tuesday.
Philly had hoped that the 1.5 cent-per-ounce tax on sodas and other sweetened drinks would reap about $7.6 million each month for City Hall upon taking effect Jan. 1. According to preliminary data, however, the levy earned the city a measly $2.3 million during its first month on the books, or only 30 percent of what was expected, local media reported Tuesday.
Grocery stores and wholesalers alike now say they’re weighing potential layoffs to make up for lost profits attributed on the excise.
“People didn’t change what they drink,” the CEO of Brown’s Super Stores told the Philadelphia Inquirer. “They changed where they’re buying it.”
Jeff Brown, the owner of six ShopRite grocery stores within city limits, said beverage sales slipped 50 percent from Jan. 1 to Feb. 17 over the previous year’s figures, and cited a 15 percent overall dip in sales at city stores. As a result, according to Mr. Brown, he’s already eliminated about 280 jobs and is eyeing additional layoffs in the coming months.
This lesson, of course will not get to the Seattle City Council, which has proposed leaping off the same bridge. Nor will the Council stop to think about what a tax on labor (aka the $15 minimum wage) is doing to demand for labor in the City of Seattle. Nope. Seattle will continue to be a Sanctuary City for the Economically Ignorant.
Sunday, August 16, 2015
Minimum Wage Hike Has The Immediate Effect the City Council Promised
The Seattle City Council said that its minimum wage law would have an intermediate effect on workers. They were right.
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