Posts filed under “Current Affairs”

Jobless in Seattle? Not Yet, Anyway. Part 2

@TBPInvictus

On Wednesday, I threw in my $0.02 about the controversy surrounding the increase in Seattle’s minimum wage. Unlike any of those who have been decrying the new law and its impact, I used some data to demonstrate the absence (as yet) of any ill effects. Specifically, I looked at restaurant permit issuance and found nothing out of the ordinary. Today, I’ll double down on Wednesday’s $0.02 with a bit more data and a bit of backstory.

Best I can tell, our story starts with a March 4 piece in Seattle Mag titled “Why Are So Many Seattle Restaurants Closing Lately?” There was no data that I could find in that piece and, as I mentioned in my previous post, buried in the story was this, with my emphasis added:

Though none of our local departing/transitioning restaurateurs who announced their plans last month have mentioned this as an issue*, another major factor affecting restaurant futures in our city is the impending minimum wage hike to $15 per hour.

Despite not a shred of actual proof that restaurants are feeling any ill effects from the minimum wage hike, the story took off in the conservative blogosphere and elsewhere. Here is just a sampling:

The Weekly Standard regurgitated the story:

However, there’s little doubt that the city’s heralded food scene is running scared.

Mark Perry jumped aboard over at AEI, citing the Washington Policy Center’s article “Seattle’s $15 wage law a factor in restaurant closings.”

Tim Worstall, who’s written about little else of late, also appeared to give a nod to the Washington Policy Center’s piece:

Restaurants are closing at higher than normal rates.

The NY Post weighed in:

According to the Washington Policy Center, it’s already having unintended consequences: namely, forcing restaurants to close.

Seattle magazine calls the minimum-wage hike a “major factor,” given that labor costs acccount for 36 percent of restaurant earnings.

Taking the Post’s comments in reverse order, I’ll note first the despicable way in which they took “major factor” out of context. See above for that phrase in its original context, and note that it was preceded by “none of our local departing/transitioning restaurateurs…” and was forward-looking (i.e. “restaurant futures”).

The Washington Policy Center’s piece would appear to be the one from which many others were spawned. It was published one week after the Seattle Mag piece, and had this opening line, with my emphasis added:

As the implementation date for Seattle’s strict $15 per hour minimum wage law approaches, the city is experiencing a rising trend in restaurant closures. 

You can see in that one line where Worstall and others got their hook. Certainly such a claim would be both supported by data and easily verifiable.

Curious about that claim, I contacted its author and asked him to share or point me to the data he used in coming to that conclusion. Unsurprisingly (at least to me), he said he didn’t have any. How then, I asked, could you make that claim? “I relied on the other sources I cited in the piece,” he replied. But, I countered, those have no data, either. “Well,” he responded, “if you’re looking for data you should contact the authors of the pieces to which I linked.” And this is journalism and policy-making in 2015? Data? We don’t need no stinkin’ data! We know what we know. I sometimes feel a tinge of embarrassment for people who operate this way. It passes very quickly, but still. I’ll vent my spleen about the state of journalism in another post at another time.

Because I didn’t want to waste my time talking to journalists who I knew had not researched the issue or had the data, I got it on my own, straight from the source. So let’s take a look.

Question: Is the city of Seattle experiencing a rising trend in restaurant closures?

Screen Shot 2015-04-09 at 7.04.59 PM

Let’s look at that another way, shall we. Behold the death of Seattle’s restaurant business:

Screen Shot 2015-04-09 at 7.06.00 PM

Now, let’s be clear here: It is conceivable that the trend of restaurants closing in Seattle is rising. However, if that is the case, the trend of restaurants opening in Seattle obviously must be rising even more, or the graph above would look a helluva lot different than it does. That said, I am quite comfortable claiming that the city is not, in fact, experiencing a rising trend in restaurant closures. And the data – the permits data from Wednesday and the food business counts above – prove it. So let’s get to the bottom line: There is no evidence (yet) that the increase in Seattle’s minimum wage – which was known almost a year ago and implemented earlier this month – is having any adverse effect on Seattle’s restaurant business. That is a data-driven conclusion. Everything else I’ve looked at on this issue was bullshit.

To those named above who should be ashamed but I’m sure are not, you’re all disgraceful, apparently lazy, and intellectually dishonest. Not that folks don’t know that, I suppose, but it does bear repeating occasionally. Any ethical outlet would retract its story with an apology and an explanation about how lazy their writers and editors are. I won’t hold my breath.

See another chronology of how the conservative echo chamber ran amok on this here.

I must give a huge shout-out here to Tony Cacallori in the City of Seattle’s Office of Economic and Financial Analysis. Dude, you totally rock. Neither piece I’ve written on this subject would have been possible without you, and I so appreciate your responsiveness and cooperation. You guys have an interesting experiment underway, and I’m happy to have spoken with you and discussed how it can and should be monitored over time. A most sincere thank you for all your help.

Thanks also to Alan Pyke over at ThinkProgress for his March piece on this issue, which was very useful to me. And for our very instructive conversation yesterday.

Category: Current Affairs, Data Analysis, Economy, Employment, Really, really bad calls

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Category: Current Affairs, Data Analysis, Economy, Employment, Really, really bad calls

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Category: Consumer Spending, Current Affairs, Really, really bad calls, Travel, Web/Tech

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Category: Current Affairs, Investing, Video

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Category: Current Affairs, Digital Media, Legal, Psychology

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Category: Current Affairs, Markets

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Category: Current Affairs, Cycles, Data Analysis, Economy, Employment, Politics

Containing Ukraine

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Category: Current Affairs, Think Tank, War/Defense

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Category: Current Affairs, Weekend

About Our “Spending Problem” (Revisited)

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Category: Bad Math, Current Affairs, Data Analysis, Economy, Really, really bad calls