Living Wage Counterpoint
You have likely made up your mind on the Living Wage increase, and I refuse to question your good intentions. However, if you have formed your ideas about Living Wage from the Joseph Crumb article in last week's Alibi, please consider that your understanding of the matter is very one-sided.
I have seen the faces of those this proposition claims to help. Mothers and fathers, some single, some married, working two or three jobs just to make ends meet. It is real, and no one with a heart could remain unmoved. Low incomes must be addressed, and the proposed Living Wage ordinance seems to be a quick fix to address this social injustice. But, as with most policy, there are unintended consequences.
A business is nothing but its bottom line, and if it shows a profit, we get to continue the game for another fiscal quarter. Behind each business are people. I am our business. My family is this business. Those who choose to work with me to accomplish our goals are our business. In my case, this means 60 employees get to take home a paycheck. Sixty souls can pay rent, pay a bill, buy some food. And if this law costs me more than I can bring in, then there are 60 families I have failed.
This law picks on my industry: restaurants. It will force all of us to raise our tipped employees' base pay 109 percent, from $2.15 to $4.50. No one can live on $2.15 an hour. It barely pays the taxes, and often not even that. Suddenly, the proponents forgot to leave tips on the table. Tips are a big part of a server's pay. I should know; I have to match taxes and FICA on every penny of them. At my place, they bring in $18-$20 per hour with base wages and tips on a slow night. They earn every red cent. It's hard, demanding work, and my servers do it with a smile. They earn more money than any job in the restaurant. But what's a mere $2.35 raise? Okay, with my tax matches, call it $2.68. Multiply 12 servers by 20 hours a week times 52 weeks. It's only about $232 per month per server, but bottom-line it for me, and it is $33,446.40 for my already highest-paid employees. Perhaps you feel servers deserve a raise over my kitchen crew. Consider that for every price increase I pass along, servers get an automatic wage increase just from their average 15 percent gratuity. Perhaps I don't like having to choose between one group over the other.
Here are some of the economic effects from my edge of the universe:
In 2004, San Francisco raised their minimum wage to $8.50 an hour (it was adjusted to $8.62 this year). According to Kevin Westley, executive director of the Golden Gate Restaurant Association, they generally see about 500 restaurants close every year, and 500 new ones open. In the first 3 months of 2005, they have lost nearly 100 more restaurants than have opened in their places. Said Westley, the biggest problem is the decrease in business due to raising their menu prices—a mere one to two dollars on every entrée. 93 percent of restaurants have lost profits, causing 78 percent to say they wouldn't expand within county limits. Who is expanding? Quick Serve (fast food) restaurants with limited service. Most chains are not hurting as much; it's the local family places with table service that are getting beat up the worst. Living Wage proponents claim there will be no ill effects, and if there were any they would be at the big-box retailers and cheap corporate chains. This shows just the opposite is true.
But we don't need to look as far as San Francisco to see the impact. Last year, Santa Fe imposed a "living wage" law. After just a year, Santa Fe is getting cold feet, as numbers don't jibe with living wage projections and costs are up for the city, gross receipts down, and the City Council is considering dumping next year's automatic increase of $8.50 an hour to $9.50. Minimum wage increases are not the panacea proponents promise. The consensus by a majority of democratic-leaning economists said that the steeper the increase in minimum wage, the harsher the effects on the economy and job loss—specifically teens, who with our 39-percent increase should expect an increase in unemployment of roughly 3.9 percent (from Robert Whaples, Economics Professor, Wake Forest University—google it.) I maintain that 39 percent is steep, and for restaurants, a 109-percent increase is a running dive off a cliff.
What about Albuquerque? No one knows what this will cost in city services and additional costs on our budget, other than some figures based on assumptions and wild speculation that only looked at those making under the proposed $7.50 an hour. Let's say I've worked for five years, finally made the grade to $7.50, and suddenly some newbie is making the same I am. Think I won't be in there demanding more? Think that wouldn't be demeaning? It is a phenomenon called "wage compression," and it has been ignored by most lefty think tanks, and is one big reason budget projections fail. One local economist is projecting $33 million in increased costs, which can only mean higher taxes or lost services.
ACORN, which is pushing the wage here, has shown that it understands the consequences. In 1995, it sued the State of California to exempt itself from paying the minimum wage. It argued that if it had to pay the higher wage, the State of California to exempt itself from paying the minimum wage. It argued that if it had to pay the higher wage, it wouldn't be able to hire as many "activists."
Some people don't make enough money to make ends meet without help. We need a balanced solution without hidden agendas. In a couple of months, the governor and state Legislature will attack this problem. I'm going to ask you to weigh the good intentions of this proposal with taking more time for more honest debate.
A Real Living Wage Proposal
As Albuquerque gets closer to voting on the "living wage" proposal, I was reminded of hearing Sen. Pete Domenici say, "The minimum wage should be market driven." I don't necessarily disagree with this, but by the same token, we should then get rid of all price supports and price ceilings.
Because, by appearances, our congressional delegates' campaigns are financed by the recipients of price supports, it is unlikely that price supports will stop.
However, I would like to propose a solution for the political problems created by a delegate being in favor of increasing the minimum wage. My proposal is quite simple: Tie the minimum wage to congressional salaries—so that every vote that increases Congress's non-market driven salary increases the minimum wage by the same percentage.
Alibi's Dream Team Another Nightmare for People of Color
As a nonwhite, creative class, female and regularly racially profiled (despite my Ph.D.) resident of Barelas in District 3 who has every intention of voting for Diana Dorn-Jones and Eric Griego, I would like to speak to the attitude of white supremacy that marked the recent article about the Alibi's pick: Isaac Benton, for City Council in District 3. I can, first of all, appreciate why someone might not want to support Ms. Dorn-Jones because of her seven-month affiliation with the diabolical and corporate Mr. Martin Chavez. Indeed, this is a strike against anyone running for City Council in a place that, before and after Mr. Chavez, has generally kowtowed to Intel and the like. Development needs to be slowed so that we can have enough water, clean air, etc. But I urge voters, especially the largely white and yuppie artsy breed who read the Alibi, to think a little deeper about who is really being served by folks like Mr. Benton.
Though accused of speaking and arguing (and being disagreeable) in support of her "special interest groups," Dorn-Jones is certainly no more attached to her special interests—the poor and working class people of color who are actually the majority in this city and state—than Isaac Benton is to his largely white and striving-to-stay-middle-class folks who are slated to gentrify and revitalize the Downtown neighborhoods. When we casually speak of the gentrification of neighborhoods, we are ignoring the inherent racism that such policies represent for places like East Downtown, the South Broadway neighborhood, Barelas and the like. Let me make this clear to you: We, as a culture, believe and protect the idea that having more white and middle-class folks moving in will make a neighborhood better, safer, etc. The fact that this protection continues to be the birthright of the majority of European Americans but of relatively few people of color is a testament to the systemic racism that is supported by us all. White Studies scholars call this behavior the "possessive investment in whiteness." More police, more fences, more racial profiling and higher property costs and taxes, along with general demolition of the homes and land of people of color, who are poor and middle- and working-class folks, make neighborhoods more appealing to the privileged, but do little to help or protect those who are not privileged by color or class. Benton represents this special interest group—the oldest one in the United States, and the most powerful.
Not only this, but subtly characterizing Dorn-Jones as a bitchy black woman and Benton as calm and level-headed plays right into this same framework. It's a 500-year-old trick that has whitewashed us all into thinking Europeans are safe and darker folks are dangerous, despite all the evidence to the contrary. Don't be fooled. Consider which groups have directly and indirectly committed the most heinous atrocities in past and recent history in this country and a long list of others and decide, really, who you want as your neighbors.
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