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Fox Pundits Lie About Minimum Wage Hike Closing Businesses

Yet another show on Fox "news" spreads lies and fearmongers about the minimum wage hike in Seattle.
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Yet another show on Fox "news" spreads lies and fearmongers about the minimum wage hike in Seattle. Two weeks ago, it was the pundits on Cashin' In. This Saturday, the regulars on Bulls & Bears took their turn.

Here's Gary B. Smith when asked what the recent minimum wage hike was going to do to jobs:

SMITH: Well, it's going to kill jobs. Brenda, look, we just went through this in Seattle, where effective April 1st they had to raise their wages to $15 per hour. Already you've had numerous restaurants closing, just a few of them, you had Grub in the Queen Anne neighborhood, you had Little Uncle, Boat Street Cafe. That's just the tip of the iceberg, because I said, the wages, the raise just went into effect. It comes down to simple mathematics. Thirty three percent of a restaurant's expenses are on wages. They only have about a one and a half to three percent profit margin. Do the math. If you raise the wages fifty percent for your... from ten to fifteen dollars, guess what happens to your profit margin? It goes to zero. Profit margin goes to zero Brenda, there's no reason to be in business.

Except, as we already discussed here when Cashin' In was fearmongering over a wage hike that hadn't even begun yet, that's not why the restaurants were closing: Conservatives Say $15 Minimum Wage Is Killing Seattle Restaurant Scene, Restaurateurs Disagree:

As Seattle prepares for the April launch of the highest minimum wage law in America, conservatives are warning that businesses are already shuttering under the pressure of higher labor costs and pointing to a recent report of a rash of restaurant closures as evidence. The problem is, the actual owners of those restaurants say that they’re not closing because of wages, and the city seems to be enjoying robust growth in that industry.

The New York Post editorial board, American Enterprise Institute scholar Mark Perry, Forbes contributor Tim Worstall, and Rush Limbaugh all cited a Seattle Magazine article from March 4 that claimed a “rash of shutterings” was afoot in the Seattle restaurant world. The magazine suggested that the minimum wage law might be a contributing factor in the closures of the Boat Street Cafe, Little Uncle, Grub, and Shanik.


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“That’s weird,” Boat Street Cafe owner Renee Erickson told the Seattle Times when fact-checkers emailed to confirm the Seattle Magazine story. “No, that’s not why I’m closing Boat Street.” Erickson’s three other restaurants remain open, and two brand new ones are in the works in Seattle. “Opening more businesses would not be smart if I felt it was going to hinder my success,” said Erickson, who described herself as “totally on board with the $15 min.”

Poncharee Koungpunchart and Wiley Frank of Little Uncle “were never interviewed for these articles,” they told the paper. They are closing one of their two locations, “but pre-emptively closing a restaurant seven years before the full effect of the law takes place seems preposterous to us.” Frank reportedly asked one conservative writer who had picked up the wage-menace red herring to “not make assumptions about our business to promote your political values.”

The owner of Shanik told the Times that closing has “nothing to do with wages,” and Grub’s owner explained that they’re being bought out and rebranded by new ownership because the breakfast and sandwich bistro has been “a huge success.”

Heaven forbid anyone on Faux "news" is going to allow a story already being debunked keep them from repeating it over and over again. Their one token "liberal" Chuck Rocha was actually the voice of reason on the panel, talking about a race to the bottom on wages and the fact that workers with more money in their hands to spend actually helps stimulate the economy. Of course he was met with sneers and suggestions that we don't need any minimum wage at all and that businesses should just be allowed to decide how little they want to pay their workers because market forces are somehow going to drive wages up. I think we all know how well that tends to work out.

I'd like to see any one of these talking heads try to get by on minimum wage for even a few months or maybe a year or so and let's see how horrible they still think it is to pay someone $15 an hour.

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