Seattle seeks to push minimum wage to $15!

[True Federalist (진정한 연방 주의자)]

The principal effect on employment of a city minimum wage law like the one proposed in Seattle is to encourage businesses that employ labor that could be paid less to relocate elsewhere, if that is possible.  Now obviously, relocation is not something that can be done instantaneously.  Indeed, for many small businesses the effect will likely not be that they themselves move, but that in the course of the usual churn of small businesses opening and closing, the openings will be encouraged to take place outside the city limits, while because of higher labor costs within the city limits, profits and/or sales will be lower than outside the city causing businesses within the city to have a higher rate of closure.  Problem is, the longer term you forecast the effects of an economic change the greater the degree to which biases in what the effects should be are likely to crop up in the analysis.

I'd be interested to know on what sort of time frame this Chris Benner has chosen to model and what his assumptions are. Other than his CV indicates he likely has a left of center viewpoint, I wasn't able to find much with a quick google. Still, while I did not glean much insight into the biases of Dr. Benner, this has shown the biases of some posters here by their determination to hang everything upon the effects predicted by one economics professor who hasn't been notable enough in his field to warrant even a stub article on Wikipedia. If you're going to play the appeal to authority card, it helps if you actually have an authority to appeal to.

[True Federalist (진정한 연방 주의자)]

Yea... and googling Steve Forbes will give you millions of hits. 

What a witty reply.  Totally irrelevant to the merits of whether Seattle raising its minimum wage to $15/hr is a good idea or a bad idea, but quite witty.

[True Federalist (진정한 연방 주의자)]

Yes, I'm sure McDondalds is going to close all its restaurants in Seattle and leave the city forever if this bill passes.

You people and your devotion to right-wing dogma even when it clearly makes no sense is ridiculous.

No, but I expect that any McDonald's franchisee who has a choice between putting a new McDonalds just inside the city limits or just outside the city limits will choose the latter.  Or if faced with the choice of renovating an existing restaurant just inside the city limits or building a replacement just outside will do the latter as well.  Also, those inside the limits might well decide to engage in labor saving devices such as self-service ordering kiosks and of course self-service soda fountains.  Of course those devices tend to work better at larger places, so instead of two smaller McDonalds, replace it with one.  (Or more likely replace three with two, since location is of some importance.)  Not only does that give the economies of scale to make those labor saving devices pay, it also means fewer managers at above line crew wages.

Now will the increased wages of the McDonald's workers remain increase demand for other goods that will increase commerce and thus jobs in the non-fast food section of the Seattle economy? Of course it will.  The question is, will the extra demand created by the fast food workers who remain be enough to offset the loss of demand from those who no longer will be employed there.  That's the question and you can likely find the answer most likely to confirm your existing biases (either pro-MW hike or anti-MW hike) if you simply pick an economist whose biases match yours.

[True Federalist (진정한 연방 주의자)]

Also, those inside the limits might well decide to engage in labor saving devices such as self-service ordering kiosks and of course self-service soda fountains.  Of course those devices tend to work better at larger places, so instead of two smaller McDonalds, replace it with one.  (Or more likely replace three with two, since location is of some importance.)  Not only does that give the economies of scale to make those labor saving devices pay, it also means fewer managers at above line crew wages.

Going to butt in here and say I was never convinced by this argument. The question is not that these stores go all labour or all capital, but at a certain point they stop. Every fast food place I've been to has a self-service soda fountain; maybe three tops have self-service ordering kiosks. Networks beam orders from the cashiers into the kitchen, but no more. So what's going on here?

There are still some fast food places around here that have the drinks machine only behind the counter. Wages tend to be more variable than ingredient costs.

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I agree that sunk costs means that a wage hike won't see restaurants immediately closing to relocate elsewhere.  But even with a boost in demand, a disparity in wages at the level being proposed  between inside Seattle and outside Seattle means that employers who hire people at low wages will when choosing a location just inside the city limits versus one just outside the city limits will favor the one outside.

[True Federalist (진정한 연방 주의자)]

While they mostly have good intentions, Liberals and Democrats don't understand unintended consequences.

As if Conservatives and Republicans don't have the same problem.

[True Federalist (진정한 연방 주의자)]

The suburb of Seatac (home to the region's main airport) has a $15/hr minimum wage initiative on the ballot this November: http://seattletimes.com/html/localnews/2021772489_seatacwagesxml.html

Inside an airport is one of the few places where no one can argue that an increase in the minimum wage will lead to a noticeable increase in restaurant prices.