Wednesday, June 22, 2016

Businesspeople on MoCo Council's quest for $15 minimum wage: "That's a lot of extra Slurpees to sell"

Small business owners already struggling to profit in the moribund Montgomery County economy told the County Council last night that things will go from bad to worse if the minimum wage is hiked to $15. A bill to do just that, and tie future increases to inflation, is now on the table. Surrounding counties and Virginia do not have a minimum wage that steep.

$15? "That's a lot of extra Slurpees to sell," said Peter Gragnano of the Suburban Washington Franchise Owners Association. The hike could make a bad labor market for African-American youth in the County even worse, warned small business owner Stacey Brown. A 2015 survey I reported on showed that in Montgomery County, only 8.7% of black high school students surveyed are employed, and only 30.7% of black high school dropouts have been able to obtain employment.

Montgomery County's young black high school graduates are also being hard hit, with only 39.7% of those surveyed currently employed.

Attaching the minimum wage to inflation - which the bill would do beginning in 2021 - would also be a bad idea, another businessman testified. If inflation spiked as it did in the late 1970s and early 1980s, he predicted, "there won't be a way to wash a dish in a restaurant." Since the last minimum wage hike, touchscreen ordering kiosks have appeared in some County fast food restaurants, replacing cashiers.

Last night's testimony was enlightening in providing some more hard numbers on Montgomery County's floundering private sector economy. According to Maddy Voytek of the Maryland Retailers Association, Montgomery County has lost 2141 retail jobs since the turn of the century (around the same time the core members of this current Council were first elected). She said adoption of the $15 wage would "devastate our economy."

Montgomery County's restaurant sector has "slowed since 2012, and remains flat," reported Melvin Thompson of the Restaurant Association of Maryland. But things are tough all over, as County Council apologists like to tell us, right?

Wrong! Frederick County's dining sector grew by 5.4% in 2015 alone, Thompson said. How about our arch-rival Fairfax County, where Councilmember George Leventhal says he has to go to find a really good restaurant, because there aren't any in MoCo? The dining sector in Fairfax grew by 6% during that same year.

As wages go up, one person familiar with industry statistics testified, Montgomery County residents are being shut out of jobs here as Frederick and Carroll County workers seek our higher wages. They then take that money back to those jurisdictions, where they enjoy a far-lower cost of living, he said. Those counties then enjoy the tax and spending money benefits of Montgomery County retail and restaurant jobs, while putting more cars on our roads during rush hour.

Ilaya Hopkins, VP of public affairs for the Montgomery County Chamber of Commerce, said there are several problems with the proposed increase. First, it provides a "one-size-fits-all" solution to a diverse economy and labor market. Second, the potential impacts haven't been fully studied. And third, it further handicaps Montgomery County in its competition with other local jurisdictions where it is cheaper to start and operate a business.

The failure of the County's Nighttime Economy Initiative, after which there are fewer nightclubs in Bethesda than before it was implemented, is only one challenge for restaurant and bar owners. A previous wage hike, multiple new regulations and fee hikes, and a costly County liquor sales monopoly already make doing business in the hospitality sector here more challenging than in Northern Virginia.

21 comments:

T said...

This article has all sorts of odd inconsistencies that should be explained much better.

1. Maryland law allows people under the age of 20 to be paid 85% of the minimum wage for the first 6 months
2. Maryland law also says that people under 16 who work under 20 hours a week are exempt from minimum wage laws
3. Fairfax County is proposing a Meal Tax yet there's no mention of this or its potential impact.
4. The "insider" says that people outside the county are taking jobs as a result of higher wage...this cannot be attributed to any wage hike as this would simply be an employer hiring the people they want to hire.
5. The Chamber of Commerce spokesperson is clueless. Most new jobs will be service sector oriented - businesses will open to serve the local populace that demands such services. If I live in Bethesda, I'm not going to drive to Frederick County to get my dry cleaning or eat out.

Anonymous said...

That photo is getting ridiculously sad now, it's almost as bad as the snowplow. You need to update your photo stock. Seriously.

Anonymous said...

A month ago Dyer went off (appropriately) on the council for raising property taxes above the charter limit. They should have looked to trim spending to some extent in his view.

Last week Dyer goes off on Floreen wanting to limit the ability of the county employee union to jack up wages through bargaining, including taking as fact the absurd claims from the union that the bill is simply the ALEC model legislation. That's quite hypocritical if you are unhappy with the level of spending in the county.

And now this. Unhappy about the county raising the minimum wage.

In summary ... don't raise taxes, but increase county employee wages, but don't increase private sector wages.

The most schizophrenic policy I've seen. Though Trump may surprise me.

Anonymous said...

WEST WHAT?

WEST KEEPTHEMINIMUMWAGELOW!

Anonymous said...

Or, in summary...Don't raise taxes above the agreed upon limit, give the county employees the increase you previously approved, let the state determine minimum wages and save the county from the expense of researching.

Don't promise things you won't follow through on. Keep your word.

Robert Dyer said...

7:18: The labor agreements have to be approved by the County Council, so they already have the power to veto one they believe is too costly. Government doesn't "increase private sector wages" via minimum wage, but rather forces employers to pay higher labor costs by government demand - essentially a tax that then puts more private sector money into government hands via income taxes.

5:54: No, Hopkins' point was not about going to Frederick for dry cleaning, but about people bypassing us to start businesses elsewhere.

Anonymous said...

"This article has all sorts of odd inconsistencies"

Welcome to the RD blog.

Anonymous said...

Dyer is his own man like Trump. Taxed Enough Already! Make America Great Again!

Anonymous said...

Is this the same Robert Dyer that was shrieking about "gutting workers' rights" just two days ago?

Anonymous said...

"A 2015 survey I reported on showed that in Montgomery County, only 8.7% of black high school students surveyed are employed, and only 30.7% of black high school dropouts have been able to obtain employment.

Montgomery County's young black high school graduates are also being hard hit, with only 39.7% of those surveyed currently employed."

As always, Dyer's "statistics" are completely lacking in context. E.g., comparative statistics for whites, or even a definition of the terms used - "black high school dropouts" and "black high school graduates". I assume that these numbers refer only to those who have RECENTLY left high school? So what is the timeframe for these statistics?

Anonymous said...

"If inflation spiked as it did in the late 1970s and early 1980s, he predicted, 'there won't be a way to wash a dish in a restaurant'."

First, it is unlikely that we will ever see a return to inflation like that during the Republican Nixon and Ford administration.

Second, is this restaurant dude claiming that restaurants have never raised their prices during periods of inflation?

Anonymous said...

"Montgomery County has lost 2141 retail jobs since the turn of the century"

Hahahaha, except all Dyer ever says, year after year, is "the county's job growth is only retail jobs! Look at the new Costco (which pays their employees an average of $50K/year)!" Which Dyer whiny post am I supposed to believe?

Anonymous said...

Another post, another example of Dyer's racist ways. Its the 21st century for crying out loud.

Anonymous said...

10:33AM - I was uncomfortably aware of that also. Where are the Latino or Asian numbers? Maybe they don't release that information and make pretty charts? But these days, it's more a haves and havenots thing rather than just a color thing.

Anonymous said...

Republicans suddenly noticed that they were "Taxed Enough Already" when their fellow Americans elected a black man president.

G. Money said...

Dyer: Hates low wage service and retail job growth. Hates upskilling due to automation of low wage service and retail jobs.

Robert Dyer said...

8:30: I linked to the article, which has a link to the report with all the data. I can't restate a whole report in an article on another topic, but have cited the solid evidence here to support the points being made.

Robert Dyer said...

8:42: Just proves how moribund the County's economy is - even the growth of retail and restaurant is getting whipped by...Frederick County. Time for term limits, folks.

Robert Dyer said...

10:33: Trying to promote job opportunities for African American youth is "racist"? Whatever you're smoking, Hans Riemer wants to legalize it.

Robert Dyer said...

7:58: Yeah - Nancy Floreen's unholy alliance with the Koch Brothers certainly was newsworthy. That's why people read this blog, so they can find out what's really going on.

Anonymous said...

Using Robert Dyer's logic, his opposition to the increase in the minimum wage indicates that he has "an unholy alliance with the Koch Brothers".