Former Starbucks chief bemoans Seattle’s $15 wage | WPC panel provides dismal outlook for small businesses

Howard Behar warned Solutions Summit attendees Wednesday that a forthcoming $15 minimum wage in Seattle will have negative impacts for the local economy. The former Starbucks Coffee president foresees price increases on goods and services and a move to eliminate part-time employment.

Howard Behar warned Solutions Summit attendees Wednesday that a forthcoming $15 minimum wage in Seattle will have negative impacts for the local economy. The former Starbucks Coffee president foresees price increases on goods and services and a move to eliminate part-time employment.

Behar was joined by other opponents to Seattle’s minimum wage spike during a panel discussion at the Washington Policy Center’s two-day statewide conference, convening in Bellevue on Wednesday. The former Starbucks executive criticized Seattle Mayor Ed Murray and labor unions for pushing through the city’s new minimum wage — to be phased in over several years based on the size of an employer’s workforce — and called on small and mid-sized businesses to bring a unified voice to the debate because large companies won’t.

“There was this great argument in Seattle about how much the minimum wage was going to lift the economy,” Behar said. “I don’t have a college degree, but I was trying to figure out, how does that work. I always wondered how plus one and minus one, together, can equal plus anything. I think it still comes out to zero.”

He said he expects to see the city of Seattle soon attempting to prevent employers from hiring additional part-time employees in response to existing part-timers asking for more hours. Seatac voters approved such a measure in 2013. Behar said he doesn’t oppose a higher minimum wage, but its enactment should be through the will of voters, not labor unions and politicians. He also chided the Seattle Chamber of Commerce for not supporting its business members and doing more to oppose the wage increase.

The minimum wage debate has shifted to major cities across the United States, said Michael Saltsman, research director for the Employment Policies Institute, adding the outcome of a $15 wage in Seattle will set the tone for other metropolitan communities. Labor unions will highlight the successes, he said, but negatively affected Seattle businesses should also be documented for the good of other major cities considering following suit. Saltsman added 85 percent of research gathered over the past two decades shows significant wage increases result in job losses, and Seattle will not be immune.

“The debate in Seattle is just beginning,” he said.

The city of Bellevue has yet to study the potential impact Seattle’s $15 minimum wage hike will have here and on the greater Eastside, nor has the City Council given staff direction to do so.

Taylor Hoang, who owns four Pho Cyclo restaurants in Seattle, was one business owner who openly debated the $15 wage before its adoption.

“The process was very ugly,” she said.

Hoang said she hires a number of Asian and Hispanic immigrants to work in her restaurants — many with little to no skills — in the hope it will give them experience or time to advance their education to find higher paying jobs in the future. If small businesses are forced to pay a $15 minimum wage, she said, they will hire fewer, but more qualified employees, which would be a big hit to Seattle’s immigrant population. The new Seattle minimum wage may also cause people to leave the workforce, she said, because they would no longer qualify for state and federal subsidies.

Behar told summit attendees they can expect to see across-the-board price increases for goods and services when the new minimum wage finally takes effect, even if businesses are able to leverage technology to supplement a decline in their workforce.

“There are no free lunches, so to say, with this deal,” Behar said.