Wednesday, January 18, 2017

Just when you thought MoCo Council couldn't get any more anti-business...$15 min. wage

The Montgomery County Council burnished the county's reputation as the most-hostile-to-business jurisdiction in the region yesterday, voting to raise the minimum wage to $15. That's the highest minimum wage in the D.C. Metro area, putting the already-moribund county in an even more disadvantageous job creation position.

In a county that is the only one in the region to experience a net loss in private sector jobs (3885, according to the U.S. Bureau of Labor Statistics)  - including the loss of 2141 retail jobs - since 2000,  local Dunkin' Donuts franchise operator Boris Lander has been a one-man job creation machine. In just the last few years, he has opened up so many locations in Montgomery County that I've lost count. The jobs these stores create are opportunities for those at the entry level of the job market, exactly the type of person the Council purports to care so deeply about.

Lander has become the point man for the business community's concern over the latest wage hike. He has put real numbers on the table, to quantify just what the negative impact a $15 wage will be on jobs. The Council ignored the data, and actually even boldly stated it was doing so.

One thing that really jumped out in the wage discussion, was that the Council is not conducting any legitimate research on the fiscal impacts of the laws it passes. It's left up to private business owners like Lander to take their time to produce such data - and then the Council simply dismisses the evidence.

Montgomery County started behind the 8 ball even before this Council passed two minimum wage increases. The high-tax jurisdiction hasn't attracted a single major corporate headquarters in two decades. Its wealthiest residents are fleeing in numbers so significant, their exit has cratered county revenues, and shuttered the vaunted "Rodeo Drive" retail strip in Chevy Chase.

But the impact of the previous wage hike has been explosive - and not in the way the Council promised. Many fast food restaurants I patronize all across Montgomery County - all of them except one - have radically slashed the number of employees. You'll often find one cook in the kitchen, and one or two cashiers out front (depending if there is a drive-thru) - and that's it. Some restaurants have even installed touch screen ordering systems.

It turns out the touted "success of Fight for $15" was a complete failure. And this is in a Montgomery County where restaurant growth has "slowed since 2012, and remains flat," according to Melvin Thompson of the Restaurant Association of Maryland (by comparison, Frederick's grew 5.4% and Fairfax's by 6% in 2015 alone).

The impact on us, the residents who patronize businesses here, has been even greater. Prices of Big Macs and fries have significantly increased. There's essentially no such thing as a Dollar Menu anymore at McDonald's. Not only have workers lost jobs, but those at the bottom have lost the ability to get a substantial amount of food for a low price (and if you feel the urge to make a snarky comment about those who get by on fast food, you're probably a paid Guy Friday for the $130K-salaried Whole Foods elites on the Council).

CEOs - and the relocation firms they contract with - are getting the latest headlines from Montgomery County, and the news is not good. Even though the new $15 wage doesn't target the kind of high-wage firms we should be convincing to move here, it is a strong indicator of MoCo's hostility to business. The Council's willingness to recklessly jump off the $15 cliff by itself in the region for purely-self-serving political reasons sends a clear message to businesses here and around the world - Montgomery County is closed for business.


  1. Absolutely we should be "anti-business" when it comes to businesses who pay their employees >$10. We're sitting at a stunningly low 3.1% unemployment; the idea that adding thousands of low paying jobs would be a positive is absurd. What would that accomplish? Attracting thousands of poor people who need to be on social services just to survive on their shit-pay job isn't beneficial to the county or its current taxpayers. Let Alabama have them.

    I'm an actual conservative (not a "pro-business" Republican trying to trick the working poor into taking shit wages): I'm tired of my taxes subsidizing McD's bottom line. They can - and should - pay their own damn employees enough to live on rather than relying on social services to cover the difference.

    1. 12:27: Ok, but to take that argument to its logical conclusion, why $15? We know for sure that is not a living wage in Montgomery County. So they'll still need social services (which used to be known as "a second job"). Would you support a $21 or $24 minimum wage?

    2. $15 is absolutely a living wage for a majority of residents:

      Of course $15 isn't enough for everyone, e.g. 1 person raising 1 or more children, but it's enough for most county households. The county pegging it to inflation after 2020 also is a logical step to take both in that it'll maintain its purchasing power and in that employers will know what to expect and can plan accordingly.

    3. 8:27: "$15 is enough for most county households." Are you kidding me? How would a person get housing, food, insurance, and pay taxes and fees in MoCo on $15 an hour? Have you been apartment or grocery shopping since the early 1990s?

      Tying the wage to inflation is a terrible idea - can you imagine what would happen to the local economy if we had inflation like the 70s and early 80s, and business owners had to pay that much more in wages during such a crisis?

      This is what happens when you have a bunch of amateurs on the Council who know nothing how business works. Only Sid Katz has ever actually run one, and you'll notice he smartly opposed the wage hike.

    4. Ugh. Of course you'd want lower income people to be stiffed, even (especially?) during a time of rising CPI-W. Thank god you can't even get elected dog catcher.

    5. 1:27: That's what George Clooney said about Trump. How'd that work out for him?

  2. The fact remains, this will be another MoCo job killer in a long line of MoCo job killers. There's just no way to get around the numbers.

    All I can say is we should have enacted terms limits sooner, for it may be too late to save the patient.

    1. Yes, that all makes sense, if you're completely oblivious to fact and simply base your opinion on garbage you're fed by people like Dyer.

      The actual facts about minimum wage in MoCo and its effect on unemployment, sans fear mongering:

      Raised to $8.40 in October 2014: Unemployment rate of 4.2%
      Raised to $9.55 in October 2015: Unemployment rate of 4%
      Raised to $10.75 in October 2016: Unemployment rate of 3.3%
      Unemployment rate today (ahead of the next increase to $11.50): 3.1%

    2. 12:50: If you are truly up on your statistics, you'd know that unemployment rate is woefully inaccurate, one of the reasons Trump won the rust belt.

      They have increasingly removed more and more of the unemployed out of the count to create fake news about America's "fabulous recovery" from the "Great Recession."

      The fact is, we have lost over 2000 retail jobs, and it's a net loss. Every jurisdiction around us had net *gains* in private sector jobs.

    3. "They have increasingly removed more and more of the unemployed out of the count"

      Who the heck is "they?" Pretending there's some grand government conspiracy - which would involve thousands of government workers across dozens of departments all keeping their mouths shut - is beyond absurd and makes you lose all credibility.

    4. 8:33: "They" is the U.S. Government - where have you been for the last decade?

      "A quick refresher on how the unemployment rate works: The government only counts people as 'unemployed' if they are actively looking for work. Everyone else who isn’t working is considered out of the labor force entirely. Ordinarily, that makes sense: People who are retired or who choose to stay home to raise a family aren’t unemployed; they’re just choosing not to work. But the recession messed with the formula: The economy was so bad for so long that millions of jobless workers simply gave up looking for a job, meaning they no longer counted as unemployed. The unemployment rate topped out at 10 percent during the recession, but it would have been higher — possibly a lot higher — if those so-called 'discouraged workers' had been included."

      In short, as the article (in a very liberal publication, to boot) explains, the unemployment rate does not accurately account for the long-term unemployed.

      YOU lost all credibility, not me.

    5. The U-3 rate is the U-3 rate. Just because you didn't previously understand its definition doesn't mean there's a government conspiracy to hide the truth; it means you're rather uneducated.

    6. Fortunately, I am well-educated. And, unlike the original commenter, I knew long-term unemployed are being excluded from the unemployment rate, making it inaccurate.

  3. The county does have a low unemployment rate but I'm not sure it makes sense to point to that to justify the $15 minimum wage. After all, people who are priced out of the county by losing a retail job or have their hours cut can move to PG county or a different county with cheaper housing costs. I'd be interested to see the U6 rate which includes people who have stopped looking for work. Overall though the county is so expensive to live in that it's not surprising to me that people without jobs can't live here though.

    Given that even pro minimum wage economists have said $12 makes a lot more sense than $15 this decision strikes me as ideological rather than sensible.

  4. Dyer is the perfect example of pro-business = anti-people. "How would a person get housing, food, insurance, and pay taxes and fees in MoCo on $15 an hour?" So you admit that $15 an hour in MoCo is a stretch but still favor a lover minimum wage...this just blows my mind!

    So what would your suggestion be for creating a pro-business environment and still giving people the fair wage they deserve (keyword: deserve)? Bc all I hear from you is criticisms with NO suggestions.

    The fact of the matter is lack of innovation is whats killing businesses in the US not wage hikes. Bc really how many of the same Dunkin Donuts does one need in a neighborhood?? If businesses don't innovate there products and re-think the bottom line, they will lose! Btw, DD products are full of sugar that will kill you anyways!! That goes for all the fast food joints you sited above and may site in a future post.

    1. @ 10:19

      So what exactly is YOUR suggestion to create or retain those jobs beyond "innovate"?

    2. 10:19: So you figure government should tell us what wages to pay, AND what we should eat? My point about $15, is that it isn't a living wage. So they're destroying jobs and low profit-margin businesses, while still not providing a living wage.

      Instead of trying to get blood out of the entry-level job market stone, we should be trying to attract the companies - such as defense and aerospace - that have high-wage jobs. The Council has utterly failed in that department.

      The Council, not Dunkin' Donuts, should be punished for their failure and incompetence.

  5. The $2.50 increase at my second job would be $2000 a year. Makes up for shitty federal attorney salaries and property tax increases.

  6. The $2.50 increase at my second job would be $2000 a year. Makes up for shitty federal attorney salaries and property tax increases.