Seattle’s $15 Min. Wage Is Making Something Happen That City Leaders Never Expected

Here is an interesting article I just read and shows just how stupid some people can be. You got your minimum wage increase, now let see if you can keep your jobs. If you expect higher pay, your skill set should at least match it. Just saying!

"Early indicators suggest the $15 minimum wage will not be as positive as City Hall intended.

In a few weeks, Seattle’s new, highest in the country, $15 per hour minimum wage will go into effect. Like many liberal policies, it was passed by City Hall with the best of intentions. The only problem is, in the end, it may do more harm than good for many.

Private businesses, unlike government entities (which, in theory, can always raise taxes or borrow), must make more than they spend in order to pay the rent, make payroll, keep the lights on, pay their business taxes, and, heaven forbid, have some left over for the owners and investors who are taking the risk and putting in the long hours.

Earlier this month, Seattle Magazine asked, Why Are So Many Seattle Restaurants Closing Lately?:

Last month—and particularly last week— Seattle foodies were downcast as the blows kept coming: Queen Anne’s Grub closed February 15. Pioneer Square’s Little Uncle shut down February 25. Shanik’s Meeru Dhalwala announced that it will close March 21. Renée Erickson’s Boat Street Café will shutter May 30 after 17 years with her at the helm…What the #*%&$* is going on? A variety of things, probably—and a good chance there is more change to come.

The magazine went on to report that one “major factor affecting restaurant futures in our city is the impending minimum wage hike.” Anthony Anton, president and CEO of Washington Restaurant Association, told the magazine, “It’s not a political problem; it’s a math problem.” He estimates that restaurants usually have a budget breakdown of about 36 percent for labor, 30 percent for food costs, and 30 percent to cover other operational costs. That leaves 4 percent for a profit margin. When labor costs shoot up to say 42 percent, something has to give.

Restaurants can take actions to adjust, such as raise their prices, acquire cheaper ingredients, and cut their operating hours and labor force. However, all those actions generate reactions from the public which can still lead to lower revenues for the restaurant and, for some, the decision to close their doors.

The Washington Policy Center explains:

When prices rise consumers seek alternatives, a behavior economists call the “substitution effect,” which results in lower demand for the higher-priced product. In the case of restaurants, consumers have access to the ultimate substitution – they can stay home.

A spokesman for the Washington Restaurant Association told the Washington Policy Center, “Every [restaurant] operator I’m talking to is in panic mode, trying to figure out what the new world will look like.”

Seattle had a foretaste of the effect of the $15 minimum wage earlier this year when Prop 1, which made a $15 minimum wage for those working in parking garages and hotels near Seattle-Tacoma International Airport, took effect. A reporter asked a cleaning woman and a part-time banquet server, who work in a hotel near SEATAC, what they thought of the new law:

The cleaning woman responded, “It sounds good, but it’s not good,”

 “Why?” I asked.

“I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added.

The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.

“What else?” I asked.

“I have to pay for parking,” she said.

I then asked the part-time waitress, who was part of the catering staff.

“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.

[source: Randy DeSoto — March 16, 2015] 

Federal Employees Paid to NOT Work?

Agencies Paid Hundreds of Employees to Not Work for at Least One Year

http://www.govexec.com/pay-benefits/2014/10/agencies-paid-hundreds-employees-not-work-least-one-year/96938/?oref=top-story

Federal agencies from fiscal 2011 to fiscal 2013 paid 263 employees at least one full year’s salary to sit on the sidelines and not work, and paid an additional 57,000 federal workers at least one month’s salary to stay home.

A Government Accountability Office report released on Monday found the government spent a total of $3.1 billion in the three-year period on salaries for employees on paid administrative leave, which is meant to be used primarily while investigating employees’ alleged misconduct. Of that total, agencies spent $700 million for employees on administrative leave for at least one month, and $31 million for employees paid to not work for at least one year.

There is no general statutory authority for the use of paid administrative leave, GAO said, but the auditing agency and the Office of Personnel Management have issued guidance to agencies to manage its use. OPM has provided examples for when administrative leave is appropriate, such as unavoidable tardiness of less than one hour, for hourly wage-grade employees and cases of adverse personnel actions. In the “rare circumstances” employees present a threat to the workplace, the possibility of damaging government property, or would “otherwise jeopardize legitimate government interests,” agencies can place the employees on paid administrative leave. Agencies often invoke their right to use this type of leave after providing advance notice of a suspension or firing.

Essentially, administrative leave allows agencies to take employees off the job without punishing them in a way that violates due process or is appealable to entities such as the Merit Systems Protection Board. This enables agencies to conduct investigations into alleged wrongdoing.

This has frequently drawn the ire of lawmakers on Capitol Hill, who say the policy allows malfeasant feds to take paid vacations while their cases are sifted through the bloated and bottlenecked federal bureaucracy. The GAO report was requested by Republican oversight leaders in Congress, namely Sens. Chuck Grassley, Iowa, and Tom Coburn, Okla., as well as Rep. Darrell Issa, Calif.

“The GAO report offers new details on the extent to which federal agencies are granting employees -- included those facing disciplinary action -- taxpayer-funded vacations for extended periods of time,” said Issa, who chairs the House Oversight and Government Reform Committee, in a statement to Government Executive. “Gross overuse of paid administrative leave wastes taxpayer funds and underscores dysfunctional agency management that often prefers to dither on personnel problems rather than expeditiously resolve them.”

GAO was able to access administrative leave data through OPM’s Enterprise Human Resources Integration payroll system. OPM has never provided guidance on how to quantify admin leave, however, and agencies therefore use differing definitions. Some payroll providers, for example, count paid federal holidays as paid administrative leave. Others count paid absences specifically authorized by Congress -- including post-organ donation recovery, official time, attending law enforcement funerals and rehabilitation from injuries suffered while serving abroad -- as admin leave, even though OPM has said they should not be included in the tally.

After excluding federal holidays from the data, agencies provided employees with a total of 9.94 million days of paid administrative leave between fiscal years 2011 and 2013, or about five days per employee. About 3 percent of the federal workforce charged at least one month of administrative leave, while 69 employees charged between 1.5 and three years.

About 77 percent of the salary costs associated with paid admin leave went to employees who took 20 days or less. At an organization like the U.S. Agency for International Development, this could simply be the grace period relocated employees have to adjust to their new posts. Still, nearly one in four federal dollars spent on paid administrative leave went to long-term users, most likely those who were facing a negative action from their agency.

Other reasons agencies provided to GAO for authorizing administrative leave included physical-fitness related activities, vacation and professional development.

In its report, GAO called paid admin leave an important tool for agencies, but said it must be “managed effectively.” GAO also recommended OPM create governmentwide standards for administrative leave reporting, so the information does not lead to “decisions based on faulty conclusions that stem from inaccurate data.”  

OPM agreed to form a working group in 2015 to establish such guidance.