Socialism Comes To Seattle

Tyler Durden's picture

Submitted by Pater Tenebrarum via Acting-Man blog,

Seattle Bows to Demand of Socialist Councilwoman Kshama Sawant

Economic science has long shown that labor is not magically exempted from the laws of supply and demand. Therefore, minimum wage laws hurt rather than help workers, especially those with few skills or those just starting out, who are on the lowest rungs of the ladder. If one wants to raise youth unemployment and price unskilled workers out of the market, there is no surer way than introducing a minimum wage – especially one that is far higher than what the market can bear.

Note that a great deal of so-called 'pro labor' legislation that instituted wage minimums has only belatedly adjusted the legal minimum wage to levels the market economy was already able to provide, due to the increase in capital invested per worker.  If the extent of the legally mandated minimum wage does not exceed what the market can bear, it mainly serves to polish the image of politicians, while the harm is at least limited. This is however not to say that there is no harm done at all by the introduction of such wage price controls, even if the levels seem reasonable.

After all, the economy is subject to frequent booms and busts under the current monetary regime, and if wages are inflexible to the downside, unemployment will tend to soar during the bust phases. The huge unemployment rates during the Great Depression were a direct result of president Hoover 'persuading' companies not to drop wage rates, in spite of a sharp fall in prices and a genuine money supply deflation.

Seattle is one of the few municipalities in the US boasting of an openly socialist council member, Ksahma Sawant. As the author of this article at Forbes rightly notes, it is quite astonishing that this purveyor of bad economics (she not only supports minimum wage laws, but also rent controls and it seems she wants Amazon to be nationalized as well) is actually teaching an economics course at the Seattle Central Community College.

As a politician, one of her central demands was the introduction of a $15/hr. Minimum wage in Seattle. The city council has now bowed to this demand, a decision that is likely to prove extremely destructive, especially to small businesses (interestingly, businesses have been allowed to 'phase the wage in over a three to seven year period', a fact that immediately belies the assertion that this legislation won't hurt business. If it is so harmless, why can it not be adopted right away?). NBC reports:

“The Seattle City Council on Monday unanimously approved a $15 hourly minimum wage — the highest in the nation.


The ordinance, which phases in the increase over time, passed a committee last week with a few changes. It would take effect next April and allow a sub-minimum wage for teens.


The ordinance was drafted by an advisory group of labor, business and nonprofit representatives convened by Seattle Mayor Ed Murray. It would phase in wage increases over three to seven years, depending on the size of the business and employee benefits.


The City Council voted 9-0 in front of a sometimes raucous audience that frequently interjected cheers, applause and shouts of "Shame on you!" as the council debated several changes to the measure. Seattle's higher minimum wage would surpass San Francisco's minimum of $10.74 an hour.




Some small business owners worry that a higher minimum wage could put them out of business.

Meanwhile, a group called 15 Now led by Socialist Seattle City Council member Kshama Sawant is collecting signatures for a ballot measure that would create an immediate wage hike for large businesses and a three-year phase-in for small business.


"Our victory is not complete, but we have fought until the last day, the last hour, against all the loopholes demanded by business," Sawant said before the council vote. "$15 in Seattle is just the beginning."

(emphasis added)

Ms. Sawant has actually studied economics, which makes this all the more astounding. Anyway, she and her followers are certain to be taught a real life lesson in economics now. Unfortunately, many small business owners and their employees will lose their livelihood as a result. Ms. Savant herself has of course nothing to fear in this regard,  as her income is paid by taxpayers.



Kshama Sawant, raising her fist in the well-known socialist greeting

(Photo by Elaine Thompson, AP)


The Downward Spiral is Already Underway

Seattle seems eager to become the next Detroit. As 'United Liberty' reports, the negative effects of the minimum wage law can be ascertained already, as the $15 minimum wage has been introduced in advance in the Seatac suburb of Seattle. Predictably, the groups that suffer the most from the negative consequences of the new legislation are workers themselves and small business owners.

United writes:

“The Emerald City may witness the economic dangers of hiking the minimum wage to $15/hour sooner rather than later. SeaTac, a suburb of Seattle, hiked the minimum wage for certain service industry employees to $15 at the beginning of the year, and there are already signs that the sudden increase is having a negative impact.


Earlier this month, Seattle voted to raise its minimum wage gradually to $15 by the year 2020. Unlike the SeaTac wage hike, Seattle’s hike will apply to all businesses.


But 15 minutes south near the Seattle-Tacoma International Airport, employees are already seeing the negative effects of such a hike. A February report from the Seattle Times revealed:


“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… Other businesses have adjusted in ways that run the gamut from putting more work in the hands of managers, to instituting a small “living-wage surcharge” for a daily parking space near the airport.”




“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.


The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.


What else? I asked.


“I have to pay for parking,” she said. I then asked the part-time waitress, who was part of the catering staff.


“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.




The Washington Policy Center, a free market think tank, said the passed-but-not-yet-implemented wage hike is already affecting small businesses in Seattle:


“After decades in Seattle, Northwest Caster and Equipment recently made the difficult decision to move the business to unincorporated Lynnwood, according to a report by KOMO news.  The owner of the family business blames Seattle’s increasingly difficult business climate for the move:  “It just seems like increasingly the city’s become a more difficult place to do business.”


The city’s proposed $15 minimum wage was tops on the list of complaints.  “If I’m going to bring someone in on an entry level, I’d prefer to start them out where I’d like to start them out, rather than having that dictated to me.”


A commercial property landlord echoes those concerns about the $15 minimum wage, noting several tenants have signaled they may not renew their leases if it becomes law: “It’s just too expensive to operate in the city.”


And in a story today, KUOW reports that small businesses throughout the city are panicking over the super high minimum wage.  Multiple small business owners told KUOW they are holding off on opening new business or expanding their current business in Seattle, while others said they are delaying plans to hire new workers.”

(emphasis added)

The problem with minimum wage laws is not only that they are economic nonsense bound to lower growth and destroy job opportunities for young and unskilled workers. A major problem is that they represent an infringement of liberty. As Dr. Machan writes on this point:

“[...] being entitled to a minimum wage is actually unjustified, even if the law affirms it, because it violates the rights of individuals to trade freely—one of the implications of their right to liberty. If people freely enter into an employment relationship that specifies certain work provided for a certain wage, this isn’t something the law may void, since it is their right to do so; the minimum wage law violates this right.”

Most people look at minimum wage laws only from the perspective that they force employers to pay a certain wage to the least productive employees. They forget that they also force workers not to offer their labor services below the prevailing minimum wage rate. And yet, such workers undoubtedly exist, especially in light of the fact that they may otherwise simply not find any employment at all.


Seattle's city council has made a grave mistake by bowing to the demands of the socialist faction. Many small businesses will be forced to close or move somewhere else. Since small businesses create the vast bulk of new jobs, the Seattle city council may eventually not only find itself with a shrinking tax base, but also a growing unemployment rate. This can be expected to be accompanied by rising crime rates and growing strains on social services.

Politicians cannot repeal the laws of economics. They might as well try to repeal gravity or order the sun not to shine. And yet, basic economic lessons seemingly need to be retaught over and over again. Unfortunately, this usually happens at a great cost, as these interventions inevitably cause misery for countless people.



Socialism – ideas so good, they have to be mandatory.

(Cartoon by: Mike Lecter)

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So Close's picture

Who is John Galt?

LetThemEatRand's picture

A fictional douchebag.  The minimum wage is a populist idea pushed stealthily by big business because it destroys small business.  Of course Galt -- were he a real person -- would simply wage arbitrage to China like all of the other asshole oligarchs.

So Close's picture

I don't think you read the same book I did.  Nor did you understand the premise.  

LetThemEatRand's picture

I understand the premise quite well.  So you're saying he would not wage arbitrage to China?

So Close's picture

I am saying it would not matter if he did.  Or that it is happening here/there.  Being mad because the genie of globalization is out of the bottle is pointless.  It aint going back in.  Deal with it.

DaddyO's picture

This is where we're all headed anyway.

Enjoy this from our Dear Leader...


Jam Akin's picture

Sham Savant - descriptive name the Councilwoman has...

toxic8's picture

Lmao! Josh Earnest and Sham Savant... match made in banker heaven

Temporalist's picture

They are both related to Steve LIESman.  Funny how that works.

Vampyroteuthis infernalis's picture

In a sick perverted way I was kind of hoping this would pass. When Seattle implodes economically I can laugh in the faces of libtards and show them how their economics suck!

This commie councilwoman is one ugly cow. Hilary has a competitor for the most repulsive female politician in the US these days.

jeff montanye's picture

as we look about the world it seems harder to find economics that don't suck.

James_Cole's picture

Seattle's city council has made a grave mistake by bowing to the demands of the socialist faction.

Just stay out of Seattle, no one wants you there anyway. Stick to texas where you and your cool friends can bring your beloved sex toys aka semi-auto rifles to mcdonalds. Everyone wins. 

Agstacker's picture

You know, in the movie James Cole gets shot in the end.  Don't mess with Texas.

Save_America1st's picture

Seattle goes full-retard and my guess is that the socialist scumbags who run the Portland metro area will do the same thing.  Bunch of mental midgets in Portland.  Socialists spread like a cancerous disease and destroy the host until it's nothing but a rotted out shell.  Just look at Detroit.

Lost My Shorts's picture

Actually, Seattle is a special case, and the high minimum wage might be sensible there in a way that it wouldn't be other places.  Key feature: Seattle is currenty perceived as a highly desirable place to live (culture, style, schools, etc.) and real estate prices and rents are over the moon.  It's getting to where no one but brogrammers and the idle rich can afford the city.  So don't be surprised if the locals want to shake things up and try out a new equilibrium.  Several considerations:

1) If the high minimum wage eliminates 10,000 service jobs and drives that many people out of the city and lowers rents, not too many who remain would think it was a bad thing.  Would you rather that:  beer costs $7 and you can afford a house; or beer costs $6 and you can't afford a house? 

2) There will undoubtedly be attrition among small business, which means weakness in commercial rents, which means that a little bit of the higher service wages can be funded from lower commercial rents.  High minimum wage has the effect of transferring some cash from the pockets of real estate (Blackstone et al.) to workers who actually live and spend in the city.  Seattle suffers perhaps more from being a high-rent desert than from high minimum wages.

3) In the gentrified north-central sections of the city, service wages already tend to be close to $15 or even above and the adjustment will be modest.  Retail and food service will be hollowed out in the poorer sections (ironically) but who cares.

The biggest unknowns are:  when 10,000 service jobs disappear, will those people leave the city, or stay around and go on welfare?  Will the high wage raise the taxpayer cost of child care, elder care, and home health care, or will it drive those people out of the city to nearby towns?  Depending on how it's managed, the high minimum wage could be a stealth program of gentrification rather than Detroitification. You just need to look at a place like Monaco to realize that sometimes an enclave of high prices and high wages is sustainable.

p.s. the case of Seatac is quite different.  There it's all about the airport -- driving up wages at a logistical choke point in the economy.  It's possible to pry more cash out of the pockets of air travelers, and they have no choice.  Looking at service workers outside the airport is missing the point.

Lore's picture

You sound like some sort of dogma-downloaded institutional-diploma-carrying back-room government apologist.  Have you actually gotten out of your chair and shopped around SeaTac lately?  The situation is terrible. Long-time mom'n'pop small retailers, salt-of-the-earth American capitalists, are hanging on by a thread, on the verge of being wiped out.  Never mind this intra-city regional bullshit:  the big picture is that the American consumer in general is drowning in debt, and if you jack wages, the operator passes the added expense to his customers by jacking prices, and sales drop accordingly.  THERE IS NO MORE DISCRETIONARY SPENDING. THERE IS ONLY MORE AND MORE DEBT. MINIMUM WAGE IS A TAX, AND THE BASIC RULE OF ECONOMICS IS THAT YOU NEVER RAISE TAXES IN A DOWNTURN. The only winner is government-food-stamp-subsidized Wal-Mart.  Seattle is just another city taking baby collectivist steps toward the global plantation. It's a good thing that they keep throwing up those stack'em-and-pack'em apartments on the waterfront. In time, they'll become the new Welfare Towers. At least the view is nicer than your traditional British redbrick.

James_Cole's picture

Have you actually gotten out of your chair and shopped around SeaTac lately?  The situation is terrible. Long-time mom'n'pop small retailers, salt-of-the-earth American capitalists, are hanging on by a thread, on the verge of being wiped out.  

Seven weeks in and mom n' pops is hangin' by threads!! I seen starving babies everywhere, crawling on de floor, desperate to find food donations from gracious patriots who courageously rejected prop 1, but none is to be found, dey all washed out!!!!!

Took only seven weeks to destroy the formerly beautiful capitalist utopia known as the (government built and run) seatac airport!!!

Why hast thou forsaken us Obama!!

Lore's picture

James - Your post seems largely nonsensical. Can you rephrase?

I refer to the region, not the airport. Local retail is depressed.

For those who are interested, Prop 1 is about cuts to regional transit:

With Prop. 1 defeated, King County to eliminate 72 bus routes (, 23-Apr)

James_Cole's picture

Region huh? Interesting that you referred specifically to seatac and the minimum wage hike specifically there (proposition 1).

This would be the same proposition 1 cited when seattle moved ahead on $15.

Lore's picture

Ah. Wrong Prop 1. That's a nice bit of pseudo-analysis from MyNW.  Notice the absence of basic profitability and solvency as determinants of wage growth and job creation (so passé). 

drendebe10's picture

Yea, Deathroit coming... no loss

drendebe10's picture

The totally moronic liberal democraps with their socialist fanatacism never seem to get how money doesn't come out of thin air and they can pass out it willy nilly without consequences.... regretfully, the consequences do not reach these liberal democraps in their own pocket book.... how stupid do you have to be to not realize that if you raise the minimum wage, businesses will respond to ways to compensate for that which ends up hurting the recipients of the new minimum wage, i.e., lost benefits, higher income taxes..... and then businesses jack up their prices which in turn hurts the consumer who has to pay more  and given obamanomics with hidden inflation, higher taxes, obamacare costs, they will have less discretionary funds to pay for the things that help the economy, given the economy is allegedly 70% driven by consumer spending.... liberal democraps may have good intentions (which gives them the benefit of the doubt) but they behave like they are dumber than a bunch of old cat turds when it comes to money and the economy.... 

BTW, a recommended reading is Charles Ramsey's Dead Giveaway and his comments about the democrap party... he says he is the democrap party's worst nightmare, ..... a thinking black man.... 

HardAssets's picture

She seems to be another obvious twit - - - flashing the socialist/communist salute like it was back in the 60s.

Are these people even aware of youth unemployment levels today ?

She says $15 is 'just the beginning'. Hell, just make it $100 per hour and be done with it.

'Power to the people' ?     Yeah . . . . right.

nmewn's picture

Yeah, she's married to a Microsoft engineer pulling down 150k+...her salary as a councilwoman is 120k, so quarter million a year.

Same old-same old, socialists love playing with other peoples money with no regard to the lady (in the article) who now has to pay for her parking, bring a bag lunch and makes less in tips.

Power to the peo...errr, ummm...state! ;-)

Siniverisyys's picture

Retarded. Employers who pay minimum wage are subsidized by tax payers. Since minimum wage is not enough to live on, low-wage earners rely on a plethora of government services to keep them able to eat and off of the street. The effective minimum wage is already much higher than you believe, perhaps higher than $15/hr when you consider the overhead of managing all of these government services that the working poor are forced to utilize in order to survive. The cost of employment has been transferred to YOU, the tax payer.

jeff montanye's picture

the deficits of the household and government sectors provide the profits of the "private" or "productive" sector.

as john hussman has noted: the current surplus of corporate profits is the mirror-image of corresponding deficits in household and government savings. Recent profits data, as well as the entire historical record, are tightly explained by these factors. after-tax corporate profits as a share of national income are currently about 70% above historical norms; these profit shares are heavily mean-reverting and strongly (inversely) associated with subsequent profit growth over the following 3-4 year period.

nmewn's picture


Minimum wage is an entry level LOW SKILL wage. What entity caused the fiat price of all goods & services to go up? How do you define inflation and where does it come from?

silverserfer's picture

Just look at it as TARP for the masses NMEWMWNM. You do realize the game is rigged right? You do know we are in the death thros of a fiat system right? Its not your pocket thats getting picked right? The monetary system is broken.  The slaves are not keeping up with inflation so quite being a SLAVEMASTER. Heah Heah. Your avatar is not fitting of your good old boy roots.

Warning: there are some hard pills to swollow ahead for everyone ahead with the predicted and forecast wage inflation ahead. It has been mentioned repeatedly here on ZH that wages have been stagnant for workers throughout ALL the past QE's. It is goingg to be unnerving for many as they still live in a fantasy land as if the money spply was still at pre -2008 levels. Its fucking not!

If someone is making less than $20 they are are a SLAVE. PERIOD. 

nmewn's picture

The only ones living on a plantation around here are those who allow themselves to be shackled to the slavemasters post.

Help me massa! I's stahved. Help me massa, I's po! Fucking please. Government created their situation and they (and you apparently) instinctively turn to it like dogs returning to their vomit. Trained to the task at hand pretty well I'd say.

Does this explain my avatar to you?

Siniverisyys's picture

I do believe that the future is entrepreneurship and passive re-distribution of wealth through popular competition.

On my trip to Mexico, I noticed that many Mexicans were self-employed. I had the impression that if the Mexicans waited for low-wage positions from mega-corporations like McDonald's, the situation would be much more grim. It's really interesting that large chain stores seem to struggle in the Mexican market because they can't compete with the low-overhead Ma & Pa shoppes. It was really inspiring to see the strong entrepreneurship in Mexico.

But, you still can't ignore that the rise of quality-of-life in North America directly correlates to to the rise of unionism. The quality-of-life in the States is lock-stepped with the prevalence of unionism. Google it.

Now, more than ever, labour supply will always exceed demand. 

So what happens with all of these unemployed people? Let them starve to death? And the remainder? Should they work for "almost free?" Enjoy your race to the bottom.


Siniverisyys's picture

So you're suggesting the cause of inflation is minimum-wage & low-wage earners? "Retarded" still stands.

Furthermore, I can make the argument that almost all positions are now "low skill" with the commoditization of technology skills and on-demand access to information on just about everything. I haven't called a lawyer in quite some time.

GernB's picture

Please explain to me how I was subsidized by taxpayers when I was a teenager making minimum wage and living at home. And to me that was a lot of money. So you are willing to screw people like I was because you want to dictate to me what I'm willing to work for. That's real compassion for ya.

monkeyshine's picture

Makes me wonder whether jacking the rate to $15 will push some families off some of the dole - though I'm sure this has been debated and calculated.  Reminds me of the way the ACA has made a number of people worse off.  

mumcard's picture

Why not make it $100 an hour then and close down all the government programs.

HoleInTheDonut's picture

Why the phase-in over 5 years?  Why exempt teenagers?  Why do these full-retard socialists hold back?  Seems they don't really believe what they say, its just "a victory", then the low wage workers have to wait 5 years to get their "living wage"?    

The_Dude's picture

Demographics are destiny....let`s just keep importing intellectuals like this ( fucking economists that can`t figure out how a basic labor demand curve works) and see what happens.

 How low does our collective IQ need to drop before we start worshipping cows and shitting in the streets?

plane jain's picture

Guess you missed that sub-minimum wage for teens thing?  Terrible, but one of the nice things about this depression has been overall better service IME with adults working as cashiers and such.  When I read that they would have a lower rate for teens I figure it was back to the 80s when employers hired lots of part time teens and pressured them to work late hours on a school night because then only teens would take those crap jobs.

Kahn E. Lingus's picture

This link is total bullshit. It took a snippit out of context. Listen to the full damn speech and you will see that he is making the exact opposite point.

DaddyO, you are jackal-faced carrion eater for submitting this. There is enough confusion and dis-information without your promulgating this BS.


DaddyO's picture

Certainly, it was taken out of context.

But do you deny it is the full throated world view of dear leader and his minions?

Why would he use such a message on the world stage?

Always watch what dear leader does, this message is the embodiment of the full thought of the current regime and socialist movement.


stev3e's picture

This link provides an example of why people blow off non-conventional ideas and label you as a tin-foil hat numbskull.

The link is a short segment of Obama's speech in Europe taken out of context.  The part of the speech you hear was said in making a contrast to the ideal of democratic power, not the promotion of authoritarian power.

Anusocracy's picture

au·thor·i·tar·i·an (-thôr-târ-n, -thr-, ô-thôr-, ô-thr-)
1. Characterized by or favoring absolute obedience to authority, as against individual freedom: an authoritarian regime.
2. Of, relating to, or expecting unquestioning obedience.

Dumbocracy IS authoritarian. What world do you live in?

August's picture

The statements quoted were sufficiently outrageous, that a savvy reader (i.e. me) could tell they had to be taken out of context.

Obama might be ignoraant enough to think along those lines, but he's certainly not so stupid as to say so publicly.

balanced's picture

Regardless of your intent, your comment is a well written piece of propaganda. You hit all of the standard propaganda points:

1. Attempt to discredit by claiming that it was inaccurate or taken out of context.

2. Try to frame the message as ridiculous (not to be taken seriously).

3. Imply that others agree with your assertions.


stev3e's picture

double post - please delete

mjcOH1's picture

I've been going to the same Mexican restaurant about once a week for 3 years.   They added a $1 ACA surcharge to my usual bill.   I deducted $1 from the tip, and  put it all on a credit card, rather than use cash. 

Everybody's happy now, right?   Because I know I'll pay whatever total is put on the check, rather than throw my own shrimp on the grill.

Malachi Constant's picture

Rather than stand up to the management for their dignity, they will spit in your food to strip you of yours. On the bright side, their smile will be genuine. Don't go there again.

mjcOH1's picture

You've convinced me.   And I happen to already have a bag of Kingsford Edge from last year.

Another victory for the workers of the world agains their oppressors.


NidStyles's picture

When they are all unemployed will they still call themselves workers?

FeralSerf's picture

No, they'll call themselves permanently disabled and, with the help of an attorney, get Social Security disability payments for the rest of their lives. Medical and dental insurance suddenly becomes very affordable too.

With a bit of under the table side work, they should be able to do better than they did when they worked. Welcome to the Third World.

August's picture

>>>Medical and dental insurance suddenly becomes very affordable too.

After two years on disability, medical insurance (i.e. Medicare) becomes free for life.

Is the USA a great and generous nation, or not?