In late June, economists at the University of Washington published a study that showed just how harmful the $15/hour minimum wage hike was for the city of Seattle. And despite that evidence, CBS ran a story Wednesday evening bemoaning how the city of St. Louis was planning to reverse their $10/hour minimum wage hike back down to $7.70/hour. “Well, cities all over America have been boosting their minimum wage. It's up to $15 an hour in Seattle,” announced fill-in Anchor James Brown at the start of the segment. “But it's going in the opposite direction in St. Louis.”
Reporter Dean Reynolds began his report by talking to a local restaurant owner who was struggling to keep is business afloat because of the hike. “Along with rising sales taxes and meat prices, a minimum wage hike to $10 an hour two months ago made it expensive to stay open,” he noted. “So he's cut back from five to two days a week for lunch. His hamburgers are smaller, his entrees pricier, and his customers scarcer.”
Despite the clear evidence that the hike was hurting small businesses, Reynolds dug in and defended the increases.
He dismissed the Republican governor who called the hike “a mistake” and said that “despite what you hear from liberals, it will take money out of people's pockets.” Reynolds touted how the nationwide protests in the “Fight for 15” had resulted in the hike. He also sought the advice of a local McDonald’s worker to explain to him the economic benefits of the hike:
WANDA ROBERTS: If we're making $10 an hour, we’re going to go right back out and spend that money.
DEAN REYNOLDS: And now that it's being reversed: What will that do to you?
ROBERTS: I will go back to struggling…
And as Reynolds wrapped up his report, he complained that “by one estimate, James, 38,000 workers could miss out on a raise.”
But Reynolds never made the simple logical connections shown by the economic problems the hikes created. If the restaurant owner he talked to goes out of business, then that would be a number of workers that are no longer receiving wages at any pay rate. And according to his own report, the hikes were causing prices to increase while quality decreased. That means even though people were getting paid more, their spending power did not increase.
The study of Seattle’s minimum wage hike proves the damaging effects do exist. “The University of Washington paper asserts the new wages boosted worker pay by 3 percent, but also resulted in a 9-percent reduction in hours and a $125 cut to the monthly paychecks,” reported Fox News. And on top of that 5,000 jobs were lost as a result of the wage hike.
And that’s not to mention that it has long been understood by reputable economists that there existed a correlation between the increases in the minimum wage and the increases in unemployment. Also, the minimum wage worker Reynolds talked to works for a company that’s replacing some employees with touch screen kiosks to place orders.
CBS’s deafening silence of not reporting the damaging finding of the Seattle study while bemoaning the correction St. Louis is attempting, demonstrates just which side of the issue they prefer.
Transcript below:
CBS Evening News
July 5, 2017
6:42:33 PM EasternJAMES BROWN: Well, cities all over America have been boosting their minimum wage. It's up to $15 an hour in Seattle. But it's going in the opposite direction in St. Louis. Dean Reynolds is there.
[Cuts to video]
DEAN REYNOLDS: Amer Hawatmeh's family-owned restaurant in downtown St. Louis is struggling. Is your business in jeopardy right now?
AMER HAWATMEH: Absolutely.
REYNOLDS: Along with rising sales taxes and meat prices, a minimum wage hike to $10 an hour two months ago made it expensive to stay open. So he's cut back from five to two days a week for lunch. His hamburgers are smaller, his entrees pricier, and his customers scarcer. Hawatmeh believes it's not the government but a combination of worker determination and customer demand that should set the correct wage.
HAWATMEH: That's how I built myself. That's how I'm teaching my children to build themselves. Don't ask what do I get, ask what can I do?
REYNOLDS: And Missouri Governor Eric Greitens agrees. Next month the minimum wage will return to $7.70 an hour. $10 an hour was “a mistake,” he says. “Despite what you hear from liberals,” he added, “it will take money out of people's pockets.” After nationwide protests, the minimum wage went up on July 1st or will go up soon from Chicago to Flagstaff and L.A. to D.C. Wanda Roberts, a minimum wage worker in St. Louis, said the new $10 wage brought in an extra $400 a month and helped the local economy.
WANDA ROBERTS: If we're making $10 an hour, we’re going to go right back out and spend that money.
REYNOLDS: And now that it's being reversed: What will that do to you?
ROBERTS: I will go back to struggling, trying to worry about how I'm going to pay my rent, how I'm going to pay my bills, and how I have money left over to buy household supplies and food.
[Cuts back to live]
REYNOLDS: Here in St. Louis, the minimum wage was supposed to go up to $11 an hour in January, but now that's not going to happen. And by one estimate, James, 38,000 workers could miss out on a raise.
