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A modern day Christmas Story on a $15 minimum wage increase in Olympia

Dear City of Olympia, citizens, business owners and Olympia City Council people:

I currently work for the most minimal of wages at a money lending firm–its sole employee. I am the assistant to a bean counter. I have job skills otherwise I would be unemployed. The value of my labour is set not currently in my best interest but in the interest of he who profits from my exploitation as an accountant and scribe. Economic down cycles and the lack of general consideration for his employee’s quality of life have lead to increased profits from my many hours of hard work. Now I must also pay for healthcare for myself and family furthering my many hardships.

I feel as if I were a mere beggar, holding a cardboard sign asking for a hand out. I ask only that the Olympia Council people, responsible for the general welfare and common good of the people, and business people, responsible for the welfare of persons they employ, to conduct an economic impact statement necessary to positively increase the quality of living for all people working and living in and around Olympia. Instead of increasing the profit margins like Ebenezer, increase the minimum wage margin.

A study should be conducted of the minimum wage on the circular flow of money in the Olympia economy. A contemplation on how increasing the meager minimum wage will affect our capitol city’s rents, business profits, government revenue, the cost of goods and services in the regional economy and Thurston county at large.

Increasing the city’s minimum wage above the state average will make me a better paid person more able to afford rent, utilities, groceries for my family and the general financial contributions to the industries that make consumables or services available to me regionally. If wage-push inflation can be minimalized by spreading the increase of minimum wage over a large period of time in small increments, say four times in a year over course of years when revenue and sales in the city are normally expected to rise to avoid profit-push inflation price increases derived solely to maintain profit percentages–a greed indicator of a Scrooge–little financial stress may be felt by all who contribute to the economy.

If businesses limit the increase in the price of each item for sale to compensate for the increase of the minimum wage, the least amount of inflation will be felt by the consumer community so people touring Olympia will still bring their dollars to Olympia. Maintaining realistic competitive prices for consumables keeps tourist dollars and reduces the effect of wage-push inflation. A higher standard of living may be earned by me the worker if proffits remain modest. The sales tax revenue will be increased by the wage-push inflation further increasing the cost of goods.

Thoughtful consideration for those living below the poverty line must be encouraged. Those living on the street or in shelters receive benefits from social services—EBT food assistance, TANF, HUD, Social Security Entitlements, Unemployment Benefits and Veteran’s Disability payments and retirement checks. All, including the guitar busker, will be affected by the increased wage; inflation devalues the poor’s dollar first.

Community nonprofit and charity groups should be aware that the wages for those employed by them is being petitioned to go up approximately 59% “rounded up” from the current minimum wage $9.47 to $15 dollars an hour. The cost of charity will need to be overcome before short fall in your budget is exposed to the cold.  Making sure the least number of people are in-the-cold is good math.

Federal Government tax revenue, Medicare and Social Security, L & I and unemployment insurance payments deducted from my check and contributions by my employer will be affected, all making it necessary to pay me my new wages. The state of Washington would see an increase in sales tax generated in Olympia. An economic impact study would help the city of Olympia decide how best to make Olympia an economic growth zone by increasing the dollars in the economy. If a business doesn’t increase its profit then no new B&O taxes need be paid, again reducing inflation.

It will be easier for some business then for others to handle an increased minimum wage. A larger company that makes a large profit off a worker will see a smaller reduction in the value of their labour productivity cost. Entrepreneurs with small companies would have to take special care not to over extend their payroll. Smaller businesses will most likely be put at a disadvantage to increase the price of goods to meet payroll expenses and other cost-push increases in their expenditures. Shots of whisky have always been costly at the bar.

Some companies already pay their employee $15 dollars an hour so they will not be affected. Large companiess also can spread the cost of doing business over a larger area reducing the effects of cost push inflation in a region. Government expenditures will increase for every person in the government’s employment that is not making $15 dollars. Insuring tax revenue earned is sufficient to overcome this new addition to government pay roll is important or jobs may be lost in the government sector.

How will the raising of wages affect those already above $15 dollars an hour? How will the dollar be valued at the super market, on a date downtown, for diapers or medications that my youngest son Tim may need? How will sales in the furniture store fare in a market of increased wages? How will rent be affected?

All these questions would be best modeled as a predicted future by mathematical analysis. Independent formulations of conclusions, not on whether or not to increase the minimum wage, instead on how best to increase the standard of living for the average person who earns minimum wage by increasing the minimum wage—an increase in wage paid over a specific period of time to avoid hardship, inflation, creating economic advantage, and a competitive skilled work force eager to earn $15 dollar an hour. The advantage is $15 bucks goes further when less people get the opportunity to earn it. If Olympia were to be among the first, then the dollar will have more purchasing power. Olympia, let us be guided by the invisible hand, not pushed by it into the future. With an economic impact study done on increasing the $9.47 minimum wage to $15, we will know of the possible economic ramifications on the decision made on our behalf to better our collective future.

Bob Cratchit, Assistant Accountant at Scrooge & Marley

Bob Cratchit, aka John Chacon, is a loving father of two.

 

 

One Comment

  1. Aslan January 7, 2016

    Good to find an expert who knows what he’s taknilg about!

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