Minimum wage: Seattle airport workers find out that TANSTAAFL

An interesting tidbit from the Northwest Asian Weekly about the effect on airport workers of Seattle-Tacoma Airport's $15/hr minimum wage:

"Are you happy with the $15 wage?" I asked the full-time cleaning lady.
"It sounds good, but it’s not good," the woman said.
"Why?" I asked.
"I lost my 401k, health insurance, paid holiday, and vacation," she responded. "No more free food," she added.

For non-Americans, the 401k is like a money-purchase pension scheme where employers normally match some level of employee contributions. It's possible that the loss of health insurance wasn't strictly related to the $15/hr minimum wage, which took effect at SeaTac on Jan 1st, since employers across the country have been diligently pushing workers onto the state health insurance exchanges where they can get away with it. However, the rest of the losses are quite instructive.

It seems that you can legislate a minimum wage, but where you force employers to pay more than they would otherwise they have a surprising number of ways to reduce the impact on their bottom lines.

The effect of the minimum wage hike has been seen in other ways as well. Labor-intensive businesses are finding ways to shed employees:

At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might soon be replaced by a less-labor-intensive cafe. The nearby Cedarbrook Lodge, by contrast, is undergoing a $16 million expansion.

The SeaTac $15 minimum is a great case study because it only applies to businesses which have dealings with the airport; as such, you can see the difference between nearby similar businesses where one is affected by the law and one is not.

I did wonder about an assertion in an article that unionized businesses were not affected; but indeed, the ordinance is clear about this point:

7.45.080 Waivers
The provisions of this Chapter may not be waived by agreement between an individual Covered Worker and a Hospitality or Transportation Employer. All of the provisions of this Chapter, or any part hereof, including the employee work environment reporting requirement set forth herein, may be waived in a bona fide collective bargaining agreement, [my emphasis] but only if the waiver is explicitly set forth in such agreement in clear and unambiguous terms. Unilateral implementation of terms and conditions of employment by either party to a collective bargaining relationship shall not constitute, or be permitted, as a waiver of all or any part of the provisions of this chapter.

So unionized businesses can agree with the workers' union to waive this (e.g. if it's posing a profitability problem that may otherwise result in firings) but non-unionized businesses have no such option even if the workers are willing - they would have to unionize first. A nice touch, and one that seems to have been under-reported in the press. I wonder why?

Hat tip: The Advice Goddess who has a new book coming out this week: "Good Manners for Nice People Who Sometimes Say F*ck".