Democrats’ hubris in thinking they can outsmart basic economics is matched only by how reliably economics drags their policies back to reality.
In 2024, the city of Seattle boldly introduced a minimum wage law for food delivery drivers, targeting companies such as DoorDash and Uber Eats. The law required those companies to pay drivers a minimum per-mile rate and a minimum per-minute rate, or a minimum per-delivery rate. The logic was that gig workers should be paid more and that the government could force companies to do so. This resulted in a minimum wage of about $26 per hour, more than the city’s general minimum wage of $21.30.
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To offset these increased costs, the companies chose, believe it or not, to raise prices. And after companies raised prices, the most expected thing happened: Customers stopped ordering food for delivery.
One delivery driver estimated that one night of orders that earned him $58 to deliver under the new law would have earned him around $17 previously. Wages were indeed higher in the first few months after the law went into effect, and then they dropped. Now, delivery drivers have to wait even longer for an order to appear on the app. Tips went down, as did orders, meaning that most drivers have not actually seen any benefits under the new law after that surge in the first few months.
The new law has been bad for businesses, too. One Indian restaurant owner said a meal that may cost around $15 in the restaurant would cost around $35 through a delivery app. He said he wouldn’t even buy his food for that price. The restaurateur estimates that he has lost about 50% of his business since the new law went into effect. Drivers aren’t benefitting, and businesses are bleeding.
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The problem is clear. Denver and Portland have seen average monthly sales increase by 30%, and neither city has a gig worker minimum wage law in effect like Seattle’s. Seattle has, unsurprisingly, seen the biggest decline in delivery orders. Trying to impose an artificial minimum wage on businesses, especially in the gig economy, does nothing but strangle the finances of everyone involved.
Seattle Democrats, in their hubris, forgot the undeniable reality of the minimum wage: It is always set at zero. If you make delivery food drivers more expensive, their delivery app companies raise prices, which causes people to stop using those drivers. If those drivers are no longer delivering food, their wages drop to zero, as do those of any restaurant employees who may be laid off as restaurants lose business. When it comes to the battle of Democratic arrogance and the laws of economics, the laws of economics remain undefeated.
