Is Seattle losing restaurant jobs as new minimum wage is phased in?

Nov 4, 2015, 2:46 PM | Updated: 5:06 pm
The latest claim from those analyzing Seattle’s new minimum wage asserts that the area lost r...
The latest claim from those analyzing Seattle's new minimum wage asserts that the area lost restaurant jobs because of the new wage, while the rest of the state grew. (AP)
(AP)

Seattle’s economy may be booming with tech headlines, but another industry could be showing signs of strain.

That is according to Erin Shannon, the director of the Center for Small Business at Washington Policy Center, who told KIRO Radio’s Dori Monson that Seattle is losing restaurant jobs in the wake of its $15 minimum wage implementation, while the rest of the state is adding similar jobs.

She said the latest numbers show that Seattle’s metropolitan area, which includes Seattle and some surrounding areas, has lost 700 restaurant industry jobs since the first of the year.

“In every other metropolitan area around the state, that number has increased,” she said. “In every other city and locality, they are creating restaurant industry jobs. And in the Seattle area, they are losing restaurant jobs.”

The Washington Policy Center is a right-leaning organization that promotes “market solutions.”

Shannon wrote more about the subject in a blog post and came to a conclusion that Seattle’s $15 minimum wage standard is the cause of job losses.

“What is different in Seattle than every other metropolitan area in Washington state?” she asked. “Well, it might be that $15 minimum wage.”

Despite Seattle passing a $15 minimum wage law, the rate has yet to fully go into effect; it is being phased in. Small businesses (500 employees or less) are expected to offer $15 per hour in seven years. Large employees have a three-year deadline. Large employers began offering $11 per hour in April. They are expected to raise that to $12.50 by January 2016, to $13.50 one year later and $15 by January 2018. Smaller businesses have a schedule that is more stretched out, offering $15 by January 2021.

Shannon wrote her blog post to refute a recent Puget Sound Business Journal article, “Apocalypse Not: $15 and the cuts that never came.” Her argument is the latest in a back-and-forth conversation that began even before the $15 minimum wage was implemented. Others caution against making any claims at all until adequate data is available, though that could take years.

Shannon claims that the Journal’s assertion that Seattle’s restaurant industry remained healthy after the initial implementation of a higher minimum wage is inaccurate. She notes the Journal stated that 5,227 food service permits have been issued in Seattle so far in 2015, indicating that the industry is growing. That would put the figure en route to surpassing the 5,458 permits issued in 2014, and the 5,415 in 2013.

“That doesn’t tell us anything about the state of employment and the state of jobs in the restaurant industry,” she said.

Shannon has a different argument. She says that because the new minimum wage was implemented, Seattle has lost 700 restaurant industry jobs. That decline comes despite the rest of the state showing a rise in the industry’s jobs. She relates the job losses to the new minimum wage implementation citing other data.

Dori agrees with Shannon’s argument.

“If we’re adding jobs everywhere else in the state and losing restaurant jobs in Seattle, I can’t think of too many other reasons why that would be,” he said.

Shannon believes this is the “tip of the iceberg” for the state of restaurant jobs in Seattle. She notes that higher wages will be phased in over time.

“It will be very telling to see if this trend of job losses in the Seattle area &#8212 that are limited to the Seattle area while the rest of the state is flourishing &#8212 continues,” she said.

Dori Monson on KIRO Newsradio 97.3 FM
  • listen to dori monsonTune in to KIRO Newsradio weekdays at 12 noon for The Dori Monson Show.

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Is Seattle losing restaurant jobs as new minimum wage is phased in?