Seattle 'Higher Meal Delivery Pay' Mandate Predictably Backfires

P. Gardner Goldsmith | March 19, 2024
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Reality can be brutal, but it’s never false.

For example, all claims of validity for the polis are fraudulent, and breaches of Natural Law. Human beings have Natural Rights, and such a predicate tells us that all interactions must be consensual to be valid. Since, by definition, all statist systems -- all political systems -- are impositions, not voluntary contractual agreements, they breach Natural Law and our Natural Rights to be left alone.

It’s easy to test this axiom through the application of core logic, or just by claiming to own all the fruits of your labor and then not paying the political tax goons.

Everyone knows that such a request to be left alone will be met by more obvious aggression from the polis.

And, like Natural Law does not bend or support claims of political power over other people, so, too, do the laws of economics stand, regardless of political claims and mirages of “government” heroics.

The city of Seattle, Washington, just ordered-up a heaping meal of this economic reality, in the form of its big politicians’ heroic claims supporting a minimum wage imposition, and… the inevitably harsh economic reality that such diktats are creating.

Reason Magazine’s C. Jarrett Dieterle reports:

“In 2022, Seattle's City Council passed an ordinance mandating a minimum earnings floor for app-based food delivery drivers in the city. The law finally went into effect in January 2024, but so far the main result has been customers deleting their delivery apps en masse, food orders plummeting, and driver pay cratering.

The ordinance, part of a legislative package called ‘PayUp,’ was passed under the banner of protecting gig workers. By setting a compensation floor for app-based delivery drivers based on miles driven and amount of time worked, the ordinance operates as a (supremely complicated) minimum wage.”

Perhaps you’re asking, “If the politicians don’t like the way other people are offering employment to willing workers, why don’t the politicians start their own businesses, create apps, and run competing companies? Why don’t they follow Natural Law and, instead of bossing around others, become their own bosses and see what consumers and potential employees prefer?”

Of course, that reminds us that, generally speaking, the people who populate the halls of political offices don’t want to operate peacefully, they assume that it’s perfectly fine to tell other people how to live.

They entered government, after all.

Some might be trying to reduce the size and burden of government, but that’s not many, and the general trend of politicians is to expand the power of the polis, control more people and control more facets of their lives and livelihoods.

All for YOUR good – which, of course, you’re not free to discern for yourself.

Related: Shocker! Study Shows Seattle's New Minimum Wage Laws Are Harming Low-Skilled Workers! | MRCTV

But, just to appear “fair,” the mafia came up with a byzantine “formula” for how their coercion will work, so don’t bother worrying or complaining about the underlying immorality of the imposition.

And don’t pay any attention to the predictably disastrous consequences. Writes Dieterle:

“Heralded as a ‘first-of-its-kind’ legislative breakthrough when it passed, the first two months of the ordinance's operation have provided a grim real-world Economics 101 lesson. First, the delivery companies were forced to add a $5 fee onto delivery orders in the city to cover the sudden labor cost increase. On cue, news stories started popping up of $26 coffees, $32 sandwiches, and $35 Wingstop orders in which taxes and the new fee comprised nearly 30 percent of the total.”

See that happen three times, and you’re talking almost an entire order worth of money, eaten by diktats of the government.

The results?

“Local news station King 5 reported that Seattle residents started deleting their delivery apps from their phones in response to the spiking exorbitant delivery prices. Uber Eats experienced a 30-percent decline in order volume in the city, while DoorDash reported 30,000 fewer orders within just the first two weeks of the ordinance taking effect.

In turn, this decrease in demand directly impacted the pocketbooks of the delivery drivers themselves. A driver who made $931 in a week this time last year saw his earnings drop by half to $464.81 in a comparative week this year. Another reported consistently making $20 an hour prior to the ordinance, only to see his earnings likewise fall by more than half since its enactment.”

The laws of economics in action.

In a world of limited resources, where only human ingenuity can reveal new resources, allow them to be tested on the market, and allow consumers to allocate some of their limited resources to their acquisition and use, a political mandate that prices some resource above what the consumer is willing to pay will see the consumer step away from that and try to find an alternative, or completely drop the entire category of resource and spend money and time on other things.

“In other words, while the ordinance theoretically raises driver earnings to over $26 per hour—a number that ironically far exceeds Seattle's $19.97 standard minimum wage—drivers are barely logging any hours as a result of the drastic decrease in demand for food delivery. As one Seattle driver summarized: ‘It was dead. Demand was dead.’ A second driver put it more bluntly: ‘I've got nothin'. I'm not gonna sit here for hours for one frickin' order.’”

As I oft get to mention to students, when politicians and pop media pundits attempt to depict business owners as “exploiters” of their employees, they not only engage in an inappropriate judgment of those others’ consensual arrangements, they, by implication, malign the consumer at the end of the transaction. The final buyer is the real employer, and to deride the classic “boss” and claim that he or she is not paying enough is to imply that the consumer, to whom the employer AND the employee must answer. Technically, both parties offering the thing or service from a business are employees of the final consumer.

And, even more to the core, each of them is both a buyer and a seller. The employer buys the services of the employee by offering financial compensation as well as a place to work, tools, etc. -- all of which have seen the employer shell out saved capital or get a loan from “the wealthy” who have saved their capital by, yep, pinching pennies and getting good buys and offering products and services, themselves.

In telling the people classically seen as “employers” to pay more, the politicians really are telling the consumers to pay more, they are costing everyone more, and they are sucking up the potential for consumers to save pennies that, again, could be spent investing in new ventures to employ more people.

Related: The Definition of Insanity: Biden, Dems Push For More Job-Killing 'Minimum Wage' Mandates | MRCTV

And this problem of soaking up the free choices and capital of consumers means that many low-skilled people simply won’t be working, or will not be working as much. It also means that people who might depend on cheaper offerings simply won’t be able to get them.

As it is with minimum wage mandates pricing low-skilled people out of the market, because their skills won’t fetch that amount from consumers, so it is for people who would like to buy the item or service at a low price.

They will be shut out, deprived, due to the “benevolent” diktats of politicians.

Thus, we see:

“In addition to drivers, those who have been hardest hit include local mom and pop restaurants that have seen delivery orders dry up, and even the city's elderly and disabled population who often depend on affordable delivery options for meals. One might imagine that progressive politicians would be quick to repeal a law that hurts workers, noncorporate local businesses, and the elderly and disabled all at the same time, but Seattle's government officials are busy either doubling down or dissembling.”

But, have no fear. Someone will gain at the expense of the innocent.

Observes Dieterle:

“The near future looks even grimmer for Seattle delivery customers and drivers. After passing the PayUp package, the City Council then decided that implementing the minimum earnings portion of the ordinance would require five new full-time government employees in the city's Office of Labor Standards (expanding to nine employees by 2027) and $1.2 million per year (escalating to $1.56 million annually by 2027). To fund these additional costs—as well as other parts of the PayUp package—the Council voted this past November to tack on a 10-cent per-delivery fee, which will take effect in 2025 and is projected to generate $2.1 million in annual revenue for the city coffers.”

So, the laws of economics, being part of the Natural Law, stand. People suffer at the expense of government impositions.

The two forces cannot be reconciled. This is a truism that is as old as man.

It’s too bad the political forces in charge of Seattle’s government don’t understand that.