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Thursday, February 27, 2014

Santa Fe County Passes 200 Percent Increase in Minimum Wage for Tipped Employees

Posted by on Thu, Feb 27, 2014 at 9:41 AM

If Seattle restaurateurs think a 61 percent increase in the minimum wage is precipitous, just look at what their cohorts in Santa Fe County, New Mexico are going to have to deal with:

The Santa Fe County Commission voted unanimously Tuesday to increase the minimum wage in Santa Fe County from $7.50 per hour to $10.66 per hour.

The ordinance passed by the commission also calls for employees who normally receive more than $30 per month in tips or commissions to be paid a base wage equal to 60 percent of the new so-called “living wage."

The lowest allowable hourly rate for those employees will increase from $2.13 per hour to $6.40 per hour. Both new wage standards are set to take effect in 60 days.

The new minimum wage will be increased annually by the percentage of increase — if any — that occurs in the Consumer Price Index, and the base wage for tipped employees will increase in relationship to the new minimum wage.

That represents a 200 percent increase in the minimum wage for tipped employees, 42 percent for everybody else! And unlike Seattle, where our hike to $15 will almost certainly be phased in over several years, Santa Fe County's wage hike happens all at once, and in only 60 days. That's not much time for businesses to adjust to the new reality.

Opponents relentlessly warn that sudden massive hikes in the minimum wage inevitably lead to mass extinctions of small businesses. Looks like Santa Fe County will test that thesis before Seattle does.

In other minimum wage news, the Los Angeles City Council has unanimously voted to authorize a study on raising the minimum wage for workers at large hotels to $15.37 an hour. By the time Seattle's minimum wage hits $15, that number may not look so radical anymore.

 

Comments (36) RSS

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1
As someone who's always on the outlook for a cheap business lunch, it seems to me over the years of 2000 to 2014 it's gone up by about 100%. The sandwich, the bowl of Pho, the fried chicken, the teriyaki, the burrito...all the staples of life...have gone from $3.95 lunches to $7.95 lunches. So, hasn't the price increase they are all fearing already happened?
Posted by Supreme Ruler Of The Universe http://_ on February 27, 2014 at 9:58 AM · Report this
The Establishment 3
Hold on now.
The lowest allowable hourly rate for those employees will increase from $2.13 per hour to $6.40 per hour.

That represents a 200 percent increase in the minimum wage for tipped employees ...

Now, I'm no expert on percentages, but seeing as $6.40 is just over three times $2.13, wouldn't that be an increase of 300%?
Posted by The Establishment on February 27, 2014 at 10:08 AM · Report this
mkyorai 4
@3 nope. A 100% increase (or doubling) would be to $4.26. A 200% increase is $6.39.
Posted by mkyorai on February 27, 2014 at 10:11 AM · Report this
Goldy 5
@3 You're right. You're no expert on percentages.

Think of it this way: what would a 100 percent increase over $2.13 be? Then work the problem out from there.
Posted by Goldy on February 27, 2014 at 10:14 AM · Report this
treacle 6
You know, I don't understand why we have to keep raising wages all the time. Why can't we simply lower the prices of things instead? That way our current wages would be able to buy more. WTF? Why always more and upward$?
Posted by treacle on February 27, 2014 at 10:19 AM · Report this
raindrop 7
Santa Fe's minimum wage is already $10.51, in a town saturated in restaurants, tourist dollars, and wealthy folks and celebrities. Fast food joints thrive as people tire of the parking hassle for an overpriced enchilada.

In Santa Fe county, however, is more rural so those business will surely have a greater challenge meeting payroll.
Posted by raindrop on February 27, 2014 at 10:26 AM · Report this
fletc3her 8
@6 Inflation is built into our markets. There is a natural pressure for both prices and wages to go up over time. As long as everything goes up at a similar percentage there is no real problem, but when prices go up at a higher rate than wages imbalances can result.

I have had the occasional double take when I wonder if I've been charged for two meals rather than one.
Posted by fletc3her on February 27, 2014 at 10:26 AM · Report this
MrBaker 9
Somewhere, a guy named Dave is having kittens.
Posted by MrBaker http://manywordsforrain.blogspot.com/ on February 27, 2014 at 10:29 AM · Report this
MrBaker 10
Somewhere, a guy named MrBaker is planning on having enchiladas for lunch.
Posted by MrBaker http://manywordsforrain.blogspot.com/ on February 27, 2014 at 10:31 AM · Report this
11
@6 Deflation is much, much worse than inflation. Say you want to buy something like a nice suit or a computer or a car. If the price is X today, and you know it's going to be less than X next week, you wait a week to buy that item.

But if you know it will continue to go down, you'll continue to wait until there comes a point your need for the item is greater than the marginal gain of waiting an additional week. In the meantime, those companies will be slashing prices, reducing production and laying people off. Those folks will be spending less and then your job is next.

It's called a deflationary spiral, and they're really bad. Just ask Japan.
Posted by Solk512 on February 27, 2014 at 10:43 AM · Report this
The Establishment 12
@5

Fair enough, let's call it an increase to 300%, yeah?

I tend to find using percentage increase/decrease the way you used it to be fairly confusing. The eyeball-grabbing percentage headline is abstracted from the original figure in a way that isn't intuitive.

As it's English, not math, and therefore somewhat open to interpretation, I think it's reasonable for your readers to take "it's an increase of 200%" and construct the following:
X2 = 2 * X1

rather than what you intended,
X2 = 2 * X1 + X1

You add needless complexity that way, whereas it's far more intuitive to use:
X2 = 3 * X1

And doesn't the rhetoric sound better when you user the higher figure in this context? Journalistic ethics (LOL) aside, of course. Regardless, we're both on the same side of the minimum wage issue, so let's just kiss and make up, alright?
Posted by The Establishment on February 27, 2014 at 10:43 AM · Report this
13
@12 It's not Goldy's fault you suck at math.
Posted by Solk512 on February 27, 2014 at 10:46 AM · Report this
Will in Seattle 14
I predict this will create many jobs as the multiplier effect kicks in
Posted by Will in Seattle http://www.facebook.com/WillSeattle on February 27, 2014 at 11:11 AM · Report this
Fnarf 15
@12, it is so, so appropriate for your lengthy, overcomplicated and wrong dissertation to appear with a picture of Newt Gingrich.
Posted by Fnarf http://www.facebook.com/fnarf on February 27, 2014 at 11:19 AM · Report this
treefort 16
@12 suppose the price of something changed from $1.00 to $1.20. This price has increased by 20%, and phasing that as "an increase to 120%" would be weird. It's the same thing here, just with bigger numbers. Even Newt can learn percentages.
Posted by treefort on February 27, 2014 at 11:31 AM · Report this
treacle 17
@8, 11 -- Oh, I understand the impact, I want to know the why.
Why is "Inflation is built into our markets." What exactly is the "natural pressure" that makes things go up over time?

I personally think it's positive-interest, a feature/rule/bug of all national currencies, but I'm very willing to be given a better explanation by someone who knows money design more deeply than myself.
Posted by treacle on February 27, 2014 at 12:01 PM · Report this
The Establishment 18
@12

I often go to great lengths to do the ol' codger justice.

Now, who's up for a good old fashioned double-down?

@16

Using your new price of $1.20 as the reference point, the increase from $1.00 to $1.20 is actually just a 16.67% difference. Seems a bit arbitrary, no?
Posted by The Establishment on February 27, 2014 at 12:02 PM · Report this
19
@12: You seem to be the only one here who doesn't get this. If you don't believe everyone here do a little Googling and get back to us.
Posted by bigyaz on February 27, 2014 at 12:06 PM · Report this
treacle 20
@18 - You are so bad at math. $1.20 is 20% greater than $1.00. Not that number you invented.

Go hire a math tutor to show you the basics.
Posted by treacle on February 27, 2014 at 12:14 PM · Report this
Machiavelli 21
The Establishment:
You may be good at math, but the word problems seem stump you.
An "increase of" looks at only the "increased" portion not the base portion.

If it was phrased "they will be paid 300% of their current pay" then 300% is the relevant percentage, but it would still be a 200% increase over the current pay.
If I am paid 100% of my current pay, it means I get my current pay, not more nor less.
If I get a "20% increase" then I get 120% of my current pay.

Posted by Machiavelli on February 27, 2014 at 12:17 PM · Report this
treacle 22
(Psst, @18 - Stay the fuck away from probability calculations.)
Posted by treacle on February 27, 2014 at 12:17 PM · Report this
The Establishment 23
@20

I find it hilarious that you're calling me bad at math. Clearly the only issue with what I posted was the English comprehension portion. If you don't understand where the 16.67% difference came from, I'd be happy to explain.

@21

Don't worry, I get it. I'd just rather see the abolishment of '% increase' as its usage needlessly obfuscates the information the writer seeks to convey, and increases the potential for confusion.
Posted by The Establishment on February 27, 2014 at 12:33 PM · Report this
24
Holy crap. What a bunch of assholes everyone is being to The Establishment. He or she is correct that calling $6/hour 200% higher than $2/hour is counterintuitive--even if mathematically correct. In this case, it would be more clear to say three times higher, not a 200% increase. You're welcome.
Posted by David from Chicago on February 27, 2014 at 12:46 PM · Report this
The Establishment 25
Apropos of nothing, I've been listening to Ffunny Ffrends by Unknown Moral Orchestr… on repeat during this exchange. Favorite discovery of the day!
Posted by The Establishment on February 27, 2014 at 12:56 PM · Report this
Goldy 26
@25 You may not be good at percentages, but you have masterfully driven the comment thread on this post off topic. Good work.
Posted by Goldy on February 27, 2014 at 1:06 PM · Report this
treefort 27
@24 it isn't actually "counterintuitive" if you have a basic understanding of percentages.

@18 you have a staggeringly poor understanding of percentages.

Both of you should read up on math rather than trying to get Goldy to talk down to you.
Posted by treefort on February 27, 2014 at 1:08 PM · Report this
The Establishment 28
@26

I wouldn't have driven this bus off the cliff if you would have just given me what I wanted. -Every Republican in Congress

Back on topic, is it fair to dramatize the (admittedly) large percent change on the tipped wages? I'm not asking that to concern troll your point, I'm genuinely curious how the percent change in wages affects labor costs given that the real value difference is relatively small.

It's really just a testament to how appallingly bad the current federal "tipped" rate is when you can triple it, and still be almost 50% less than WA's $9.32 minimum wage.
Posted by The Establishment on February 27, 2014 at 1:35 PM · Report this
keshmeshi 29
@20,

But to calculate that increase, you multiply $1 by 1.2 (i.e. 120 percent). I'd say The Establishment's math is solid, just not their understanding of how that translates to talking about math.
Posted by keshmeshi on February 27, 2014 at 1:48 PM · Report this
collectivism_sucks 30
This is very bad. Why? Most of server pay comes from tips. When people find out we're paid more hourly, they tip less and that results in us actually making LESS MONEY.
Look at it this way: In Washington, we make 9.36/hour plus tips. Less say a server at a med range restaurant has eight tables over a five hour shift. Each bill is on average $100, and that server makes 18% on average tip. After "tipping out" the bussers and hostesses, the server leaves with $119 for five hours work. Plus $9.36 an hour that means that server makes about $33.16/hour.

With a higher wage and no tips, that means servers will be making maybe 15/hour, OVER A FIFTY PERCENT PAY REDUCTION. How is that "helping the proletariat masses?"

Anyone who can go to Canlis or Wild Ginger, look at those servers and think they "need our help" in on crack. It's a well kept secret how much servers actually make, I should know because I did it for years...unlike Goldy who probably has been working cushiony jobs his whole life.
Posted by collectivism_sucks on February 27, 2014 at 1:58 PM · Report this
Goldy 31
@28 If it's all about maintaining an adequate profit margin (and for businesses, it is), then yes, the percent increase in your operating costs is relevant.

Think of it this way. If a hospital had to increase the salaries of doctors by the equivalent of $4 an hour, they'd barely notice. But a $4/hr raise at a coffee shop is a much bigger deal.
Posted by Goldy on February 27, 2014 at 2:00 PM · Report this
The Establishment 32
We may not see eye-to-eye on the subject of percentages, but I think we can all agree that @30 is an idiot.

@31

Maintaining an adequate profit margin for small businesses is probably the single most convincing theoretical argument against raising wages by a relatively large amount (coming from a supply-side worldview). We need to get the demand-side arguments for a higher minimum wage in the public discourse more effectively.

As far as the actual numbers go, I'd love to see you do a piece using a small restaurant's actual budget numbers, with analysis of how their business might be affected by a higher minimum wage, taking into account the corresponding increase in demand engendered by said wage increase.
Posted by The Establishment on February 27, 2014 at 6:59 PM · Report this
collectivism_sucks 33
@32
http://christopherpatrickross.files.word…

I would LOVE an explanation as to why my math is off. I sincerely doubt anyone here has as much experience as I do waiting tables. If you lack the intelligence and/or understanding of facts to make an argument, fall silent and let the grown ups talk.

But I do thank you for showing to all how incapable of intellectual thought most Seattle liberals are. By all means. keep talking. It does my side of the argument a great service.

As this Depart of Labor report shows, according to their map servers in Washington State make on average 27,040 a year. Source: http://www.bls.gov/oes/current/oes353031…

Take into consideration that means all servers in the state, and no doubt areas outside of Seattle bring that average down quite a bit. If we go to a "European style" model in which hourly wages replace tips, servers would end up making less money.

And also keep in mind that because cash tips are so hard to track and tax (most servers don't claim all their tips for cash reasons) we can't accurately track how much they're making. But again, anyone who thinks the servers are Canlis are "poor, working class masses" is indeed a moron.

As for the often stated "but workers will have more to spend" argument, that falls flat for a number of reasons. First, prices will go up. So a workers making minimum wage who eats at another restaurant in which people there also make minimum wage will find the prices have gone up similar to their own pay. Hence, many gains in spending power are erased and the minimum wage workers still don't have the money to spend.

Second, most minimum wage earners don't eat out at "nicer" establishments because it is outside of their comfort zone. I worked in cities filled with drug dealers who made very good profits. How many of them stepped into a fine dining restaurant, even though they could easily afford it? None that I've seen.

Give a ghetto minimum wage earner more money and they'll keep eating and drinking as they did before. They aren't suddenly going to develop a taste for foie gras just because they're making over five dollars more an hour.

Third, this is a city we're talking about, not a state. In Vancouver, WA, people rarely eat or shop in the city limits. Instead, they just drive over the bridge and shop in Portland where their is no sales tax.

So, if this passes and priced go up, what's to stop Seattlites from working here and saving money elsewhere? If people in Vancouver are willing to shop in Portland to save 6%, what's stopping people in Seattle from shopping in Bellevue and saving 10-20%?

But by all means, continue the name calling and absolute lack of rational thinking and a complete lack of sources to back up your claims. It only shows the lack of intelligence liberals seem to suffer from. It is little wonder that liberalism is dying out and libertarianism is growing stronger every day. Source: http://www.theadvocates.org/new-poll-fin…

More...
Posted by collectivism_sucks on February 28, 2014 at 12:10 AM · Report this
collectivism_sucks 34
@32
Oh, and I just ran into this: an informal study coming to the same conclusion: people will tip less if there is an absurd 15/hour Minimum wage.
http://www.cnbc.com/id/101451789

But when do facts matter? We have Sawant! We don't need facts and sources, we have PEOPLE POWER! (end sarcasm mode)
Posted by collectivism_sucks on February 28, 2014 at 12:41 AM · Report this
The Establishment 35
@33

'Because some servers at some high end restaurants make a decent living, we shouldn't pay servers at lower end restaurants a living wage.' - Arguments by Collectivism_Sucks™

Your logic is bad, and you should feel bad.
By all means. keep talking. It does my side of the argument a great service.
LOL.

You're right in a sense, though. My engaging with you is a terrible mistake that benefits only your efforts at maximum trolling. I am terribly bored though, and your ranting oh so entertains me, so please, keep it coming.
Posted by The Establishment on February 28, 2014 at 9:31 AM · Report this
collectivism_sucks 36
@35
First, I never said ONLY servers at high end restaurants make a decent living...in fact, servers there make more than a decent living (up to 45,000 a year or more) while others make a decent amount. I've worked casual and fine dining and never had a problem paying bills at either. Like I SHOWED using the Department of Labors own statistics, servers in Washington state make 27,000/year self reported, not counting cash tips and not counting servers in the Seattle metro alone who, common sense will tell you, make more.

So, I'm "trolling". Let me pause to ROTFOL. Okay, I'm done.

Where are your facts and sources to back up any of your claims? My logic is based on facts and figures, like this one: "That said, according to an unpublished study by Lynn analyzing state-by-state tipping patterns, customers tend to tip less in states where the tipped minimum wage is higher. "
Source: http://www.cnbc.com/id/101451789

If citing sources and making an intelligent argument based on said sources and facts is tantamount to
"trolling", then I guess every student in every university to ever write a paper is a "troll."

By all means, keep rambling. Keep up the name calling and absolute lack of coherent argument. It's no wonder that with people like you doing the talking, majority of people outside of the parallel universe of Seattle are completely opposed to a minimum wage above $10.10/hour. Here's comes another one of those "trollish" sources, LOL! http://www.seattleweekly.com/home/950543…
Posted by collectivism_sucks on February 28, 2014 at 9:54 AM · Report this
37
meanwhile, the minimum wage for servers in ALL parts of California (from SF to Barstow and all places in between) has been $8 for years (soon to be $9) and the service sector, especially restaurants, has been a bright spot of that states massive economy for years...
Posted by bttrwtrss on March 3, 2014 at 10:22 AM · Report this

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