The Wall Street Journal reports here on the impact of mandatory increases in the minimum wage on small businesses. SeaTac, Washington will soon impose the highest minimum wage in the country — $15 per hour.
Han Kim, a partner in the 171-room Holiday Inn Express franchise in SeaTac, as well as two other SeaTac hotels, estimates that for all three, the city’s wage hike to $15 hourly will result in about $400,000 in additional labor expenses.
“We are running pretty thin as it is so we cannot eliminate positions,” he says. Increasing the price of a room is too risky, he adds. “I cannot go around changing prices without my competition [also] changing them. . . . We’ll have to make less money I guess.”
Mr. Kim says he is putting plans to build a fourth hotel property in SeaTec on hold. “We are waiting to see how things are going to pan out,” he says.
So when Mr. Kim makes less money, what happens? He’s already putting the brakes on a new hotel, meaning people will NOT be hired, at least for now. In addition, when Mr. Kim’s business makes less money, that means he has less money to spend, save, or invest — and people other than Mr. Kim are negatively impacted by that. Think of all the business supplies and services he will not purchase, and all the personal activities he will not engage in. Liberals should care about these dominos, but their support of mandatory wage hikes shows they don’t.
