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Labor laws set and ‘The Sky Remains Aloft’

New report chronicles history of business lobby’s mistaken doomsday predictions


sky-remains-aloftSEATTLE (April 9, 2014) — The 9-hour day will hurt department stores. A 25¢ minimum wage will destroy all jobs in the South. Paid sick leave will cost Seattle $90 million.

As Seattle continues to debate the $15 minimum wage, many of the far-fetched predictions, projections, and threats made by some business lobbyists sound eerily familiar.

Working Washington’s new report — “The Sky Remains Aloft” — compiles a century of mistaken projections about the impact on business of improving workers living standards.

In the century since Washington State first passed a minimum wage, the real-world data has become increasingly clear: raising wages lifts workers out of poverty, creates new customers, boosts the economy, has very moderate price impacts, and does not reduce job growth. But despite the long-standing experiential evidence dating all the way back to 1915, some business lobbyists continue to tell the same scare stories they’ve been telling for the last century — even though the sky has yet to fall.

Highlights of the new report include:

1903: A 9-hour day for children will hurt department stores?

The child labor measure is being vigorously attacked by the department stores to the State. Representatives of these stores are using all of their influence…to secure the defeat of this bill, on account of a provision which it contains limited the work of children from fourteen to sixteen years of age to nine hours a day.

— Department store owners, opposing child labor protections. Child Labor Bill Signed. One More Remains to be Passed — Department Stores Said to be Fighting It, NY Times, April 16, 1903

1949: Any minimum wage causes “immediate unemployment”?

Any temporary advantage to our 2 million employees would be more than offset by immediate unemployment within our industry. [A] national minimum wage within our industry is impractical and dangerous.

—George R. LeSauvage, National Restaurant Association, 1949

1991: Any wage above $4.25 will drive Hardee’s out of business?

I don’t know what kind of dream world they’re in. When [the cost of] your labor component goes up, it ultimately gets passed on to the consumer.  [If another wage increase were enacted], we’d probably be out of business at some point.

—John Merritt, Senior Vice President, Hardee’s

2004: Raising the wage above $5.15 is a “job killer” at Domino’s?

From our  perspective, raising the minimum wage is a job killer…If the minimum wage were increased, there would be price inflation for consumers or we would likely employ fewer people.

—Domino’s Pizza CEO David Brandon.

Note: according to their 10-K filings, Domino’s & their franchisees currently employ 220,000 people, an increase of more than 70,000 (almost 30%) since 2004.

2011: Sick leave means “some people will go out of business”?

The hardest thing in the world is to run a small restaurant. As far as the whole labor thing goes, we’ll have to see how it plays out. But ultimately, I hate to say it, I think some people will go out of business.

—Ethan Stowell on sick leave. Note: Restaurant employment in King County has increased by 3,200 jobs since sick leave was implemented.

2011: Sick leave will cost Seattle $90 million a year?

Mandatory paid sick days could cost Seattle businesses and consumers between $30 million and $90 million a year.…Mandatory paid sick leave is likely to impact small businesses, restaurants and the hospitality industry the hardest.

— Washington Policy Center briefing on economic impact of Seattle paid sick leave ordinance

Note: A year later, Tom Douglas, who opposed the paid sick leave law,  estimated it was only costing about one-third of what his company initially projected for the 650 eligible employees at his restaurants.

2013: “It really hurts” that $15 will force layoffs at Cedarbrook?

I am shaking here tonight because I am going to be forced to lay people off for something that is not their fault, something they have no control over,” he said. “I’m going to take away their livelihood. That hurts. It really, really hurts.

—Scott Ostrander, manager of the Cedarbrook Lodge in SeaTac testifying in opposition to a $15/hour wage.

Note: After $15 for hotels was implemented, he told KIRO TV that they are expanding “not in spite of Proposition 1 but actually as a recovery method to Proposition 1 to try to recoup significant expenses that will be incurred as a result of Proposition 1.”

2013: $15 + “razor-thin margins” will mean lost jobs at MasterPark? 

Roger McCracken, managing partner of MasterPark, which gave $31,890 to fight Proposition 1, has said the company may have to automate some jobs if the measure passes. “We’re on a razor-thin margin as it is,” he told Bloomberg News.

—Roger McCracken, manager of Master Park.

Note: After $15 for parking lots was implemented, “he called layoffs ‘foolish’ and rejected the notion that cashiers soon would be replaced by automation”

The full report is available online. For more information, visit Working Washington’s website.

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