By Mary C. King
Portland Tribune, Oct 5, 2017
The stronger of two studies of Seattle's recent minimum-wage hikes shows clear gains in weekly earnings and no loss of jobs or hours. ... Seattle's success at pushing fast food restaurants to pay better wages without cutting jobs, is most likely due to higher sales, lower turnover and better employee productivity.
When low-wage workers earn more, they spend more, increasing local sales in ways that business owners often don't anticipate. In February, Marketplace reported that Bill Phelps, CEO of Wetzel's Pretzels — projected to gross $165 million in 2016 from over 300 stores — had opposed minimum-wage increases, fearing they would hurt profits, and that sales would fall if he had to raise prices to compensate. But both times California raised the minimum wage, sales at his California stores immediately shot up. "I was shocked," Phelps said. "I was stunned by the business." ...
Not only fast food workers but all Oregonians have a stake in pushing up pay in minimum-wage occupations like fast food. Oregonian fast food workers' household incomes are more than twice as likely as average to fall below the poverty line. More than a third of fast food workers have kids at home, and over 40 percent receive food assistance. We're all better off if all Oregonians earn a living wage.
Mary C. King is professor of economics, emerita at Portland State University.
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