Business

Minimum wage debate flares at Tacoma merchants meeting

Raising Tacoma’s minimum wage to $15 an hour as early as the end of the year is too much, too fast, said owners of several restaurants and small shops in downtown Tacoma.

Members of the Downtown Merchants Group, at its regular meeting Thursday, had tense exchanges with two representatives of 15 Now Tacoma, the advocacy group currently gathering signatures to require the wage boost. DMG President Judi Hyman said she invited them to the meeting “to better understand the reasoning and also to understand how to prepare” should the ballot measure become law.

“Fifteen dollars an hour is not a princely sum,” Alan Stancliff, a volunteer for 15 Now Tacoma, told the 30 or so DMG members who attended the meeting in the lobby of the Pantages Theater. “This initiative has legs, and it will happen.”

The group’s proposed law would require businesses making gross revenues — the amount of income before expenses — of more than $300,000 to pay its employees a minimum of $15 an hour.

Unlike Seattle’s law, which went into effect this week, the Tacoma ballot measure has no tiers based on number of employees, no phasing in over time, and no credits for things such as tips or other benefits.

The proposed Tacoma law is more radical than Seattle’s, said Hyman, who also owns Two Koi Japanese Cuisine. And, she said, “it goes into effect practically overnight.”

Embellish Multispace Salon owner Patricia Lecy-Davis, among others in the 30 or so people in attendance, acknowledged the concern about wages but said 15 Now Tacoma was focusing on the wrong players.

“We do have a problem with minimum wage and living wage in this country,” she said. “But the businesses whose behavior you are trying to change aren’t in Tacoma. You want to change Walmart and McDonald’s. This measure would kill small businesses in Tacoma.”

Lecy-Davis said even the phrase “small business” is misleading. The federal government defines that as one with 500 or fewer employees. Tacoma doesn’t have small businesses, she said — it has micro-businesses that have as few as one employee to around a dozen.

Inevitably, the discussion veered into disputes over what the minimum wage would be if it had kept up with inflation; implications that business owners were exaggerating the financial harm of a $15 hourly wage; and rhetorical questions for the higher-wage advocates about whether they’d ever owned a business or held a job.

Stancliff and Sarah Morken of 15 Now Tacoma said working people need to be able to support themselves, and employers should bear more of that burden than they do now.

“Labor has a cost and a price. When the price is far below the cost, something has to make up the difference. Now, it’s the welfare system,” Stancliff said. “We believe employers should pay the full price for labor.”

Hyman said she wasn’t sure what else she could give. “I’ve not collected a paycheck in four years,” she said. “I can’t afford health care for my 25 employees, but I pay for their doctors’ visits and buy new shoes.”

Philip Panagos owns Social and Paesan, two restaurants on Dock Street. He said the idea that Tacoma’s small businesses were rolling in dough is simply fantasy. His business card reads “head janitor.”

“I have employees that make $60,000 a year because of wages and tips,” he said, adding that he estimates he’ll break even on his investments in four years. He said he employs 50 people in the summer and a skeleton crew in the winter. This winter, he took out a $50,000 line of credit to survive the season.

Restaurant owners aren’t in business “to make money today,” Panagos said. “We’re building an asset.”

If Tacoma implements a $15 minimum wage, Panagos said, he’ll probably move out of Tacoma.

15 Now Tacoma has to collect at least 3,160 signatures by mid-June. Stancliff said Thursday the group has enough but are continuing to gather signatures for a healthy margin. Once the signatures are deemed valid, the City Council can elect to pass the measure as written. If the council doesn’t act, voters would decide the issue next November.

David Schroedel of the Tacoma-Pierce County Chamber asked Stancliff if there was anything the DMG could do to dissuade 15 Now Tacoma from moving ahead on their initiative.

“I can’t imagine what it would be,” Stancliff said. “We represent the interests of low-wage workers. This is a political process.”

“We’re not political; we’re business owners,” Hyman responded. “You have the opportunity now to not submit (the signatures) and bring business to the table. We ask you as the DMG not to submit.”

Stancliff said the Tacoma City Council had a chance to act after 15 Now supporters attended several meetings and demanded higher wages during the general public comment period. “So we’re going to the voters,” he said.

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