This editorial appeared in the March 21 ’14 issue of the Capitol Hill Times.
At a recent Town Hall forum, the proposal to raise Seattle’s minimum wage to $15 an hour received varied commentary. Most participants expressed unequivocal support for the increase, although a vocal minority opposed it or demanded exemptions.
Many opponents to the measure were small business owners, who spoke about how a higher minimum wage would hurt not just them, but also their employees. More than one of these owners told the forum that workers are “like family” to them, and that an increase in the minimum wage would force businesses to lay off workers, cut benefits, cease hiring, or otherwise pass costs onto the very low-wage workers $15 an hour is meant to benefit. While a couple of employers came out in support of the measure, most presented some variation on “I support the idea of a higher minimum wage, but actually raising it will hurt my employees, who I care about.”
The economic ramifications of the minimum wage increase have been widely discussed, but what has received less attention is small business owners’ suggestion that they treat their employees like members of their own families. This is nothing new, of course: small businesses often strive to contrast their own neighborly intimacy against the impersonal hierarchy of a Walmart or Starbucks. But however charismatic their owners may be, the truth is that small businesses aren’t families; they’re just businesses that are small. And they’re just as subject to market forces as Safeway and McDonald’s—arguably more so, since big corporations can use economies of scale, collateral-backed loans, and other strategies to temporarily resist the dictates of the invisible hand.
To an owner of any firm, workers are basically inputs in the production process—ingredients in a recipe, where the end product is the survival of the business. In a competitive market, an employer who spends more on their workers than law and necessity force them to will soon find themselves undercut by ruthless competitors who peddle the same good or service at a lower price. The market does not abide a benevolent boss any more than the savanna abides a forgiving predator.
As tiny boats in this giant ocean of competitive market forces, small businesses can least afford to unilaterally treat workers “like family.” Let’s remember what that word connotes: the family is a realm where loyalty trumps profit, and money is only a means to the end of collective well-being. Almost by definition, families stick together. Employees, on the other hand, generally do not leave their home each morning and expect to find this kind of mutual support at their job, whether they work at Microsoft or Joe’s Computer Repair. They know that the norms of the workplace are different from the norms of the household; the survival of the business matters, and they matter primarily or exclusively on the basis of their contribution to its survival. At work, employees trade in their dignity for a contingent paycheck and a uniform, donning practiced smiles for customers and for the supervisors they know could fire them tomorrow. Indeed, the closest thing to a family in the workplace is the sibling-like mutual support of the very unions that are agitating for $15 an hour, in which workers habitually refer to one another as “brother” and “sister.”
Business owners who say that their employees are like family to them should reflect on whether they’re being honest with themselves. They may like their workers, and they may strive to manage their firms as honestly and compassionately as the market will allow them to. But market relations are fundamentally different from family relations; the private space of the family houses all the emotions, needs, values and relationships that are crowded out of an efficient workplace. Businesses can’t be familial, but homes can—if their denizens aren’t working 60 hours a week to make rent.
Employers who truly care about their workers “like family” should try to return those workers to their actual families by supporting $15 an hour. By forcing all businesses to pay workers more, the wage increase would allow caring employers to pay their workers a living wage without being undercut. This is a collective action problem, for which government intervention is well-suited: if one restaurant pays its workers $15 an hour while everyone else sticks to $9.32, that one high-paying restaurant won’t be in business for long. But if every player in the market is required to pay a minimum of $15, then no one gets an advantage.
Small business owners may be about to get a lot more comfortable with $15 an hour. On Saturday, Councilor Sawant announced that she and other labor organizers are proposing a compromise in which the minimum wage for small Seattle businesses will gradually rise over the next three years, starting at $11 an hour in January. This might be enough to win over small business owners, whose cash flows will rise from increased consumption by big-business employees long before they have to pay their own workers a living wage. If this compromise succeeds in wooing small business owners, though, it will not be because of an abiding, familial loyalty to their employees. It will be because they see a good business opportunity, plain and simple.