Wins for workers

Western cities lead the national movement for a higher minimum wage.

 

Labor rights activists and supporters of the 15 Now movement at the Seattle City Council session last June, when raising the minimum wage to $15 per hour — highest in the nation — was approved unanimously.
Eino Sierpe

On April 15, protesters swarmed downtown Seattle carrying signs displaying slogans in English and Spanish: “Raise the Minimum Wage,” “Because the Rent Won’t Wait,” “4 Jobs No Time to Sleep Help Momma Get $15 per Hr.” They occupied fast-food restaurants and clustered outside Uber’s corporate offices, chanting, “We can see your greedy side!” Twenty-one people linked arms and sat in the street in front of a glass-enclosed Ferrari dealership, moving only when arrested.

All over the country, adjunct professors, home health-care workers and employees of McDonalds, Taco Bell, Wal-Mart, Target and other corporations took to the streets to demand a $15-an-hour minimum wage. In Seattle, the protests were partly to support workers elsewhere, because on April 1, that city had already become one of the first to offer a $15 minimum wage, which will be phased in over the next few years.

Other West Coast progressive hubs have started to follow suit, and so far, they’re the only places in the country where the “Fight for $15” has prevailed. Seattle’s raise followed the success of a 2013 ballot measure in SeaTac, a suburb to the south, which gave a small subset of workers in this airport town $15 an hour and paid sick leave. Last fall, San Francisco voters approved a phased-in $15 minimum; Los Angeles and the state of Oregon are considering the same.

The West’s low-wage workers are steadily losing economic ground. Wages haven’t kept up with cost-of-living increases in many communities, whether the booming tech centers like Seattle and San Francisco, where rents are soaring, or the service-driven “amenity” and tourist towns like Aspen, Flagstaff and Durango, where second-home owners and retirees distort the housing market for working stiffs.

And in many states, average folks have benefited only marginally, if at all, from recent economic growth. According to a recent Economic Policy Institute report, between 1979 and 2007, only the wealthiest 1 percent in Nevada, Wyoming and Alaska enjoyed rising incomes; the average incomes of the 99 percent in those states fell. Over the same time period, the wealthiest 1 percent in Arizona, Oregon, New Mexico, California, Washington, Montana and Utah claimed between 50 and 84 percent of all income growth. “Today SeaTac, tomorrow the nation?” asked a Seattle Times columnist in 2013. Many Western workers hope the answer is a resounding “yes.”

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Their dream may not be completely quixotic. It’s not just Left Coasters who support raising pay. Last fall, voters in Arkansas, South Dakota and Nebraska voted to hike their lowest pay above the $7.25 federal minimum wage, which adjusting for inflation, is more than $3 lower than it was in 1968, when its real value peaked. Alaska voters raised theirs from $7.75 to $9.75 by 2016.

While minimum wage workers in Seattle, SeaTac and San Francisco were already making more than $7.25, the new $15 minimum represents a raise of between 40 and 60 percent. And yet it still might not be enough to allow them to live in the cities where they work. According to Massachusetts Institute of Technology’s living wage calculator, a single adult supporting a child and working full-time in Seattle would need to earn $20.53 to cover monthly expenses; in San Francisco, that worker would need $26.03.

Higher minimum wages alone won’t rectify income inequality. There’s no guarantee, even, that every low-wage worker will see higher take-home pay, explains University of Washington economist Jacob Vigdor. A restaurant owner adjusting to higher labor costs might notice she does little business in the first hour, for example, and start opening at 11 a.m. instead of 10. “Every worker on payroll from 10 to 11 is not getting paid for that hour anymore,” Vigdor says. “If your higher wage is offset by lower hours, your income might not go up.” From another perspective, when your time is valued more, you might be able to choose to work less, in order to, say, spend more time with your kids.

Opponents of minimum wage increases argue that they kill jobs, raise prices for consumers and may force some small businesses to close. However, a study conducted for the city of Seattle on wage hikes in places like Santa Fe and San Francisco, two of the first to raise wages above their states’ minimums, found no statistically significant impact on overall job numbers, or rates of business openings and closings.

Still, there’s no precedent for a raise this substantial. The only way to determine the impact is to carry out the experiment. Vigdor and his university colleagues will study its outcomes over the next five years. Among other things, they’ll follow workers and businesses to capture the nuances — like the aforementioned restaurant example — that are often lost in faceless, data-driven studies. Vigdor expects to find that the raise helps some and hurts others. Whether the benefits ultimately outweigh the costs, he says, is a question not for science but for society: It’s a question of values.

From a policy perspective, Vigdor thinks the minimum wage is a relatively blunt tool for alleviating poverty. More focused, he says, is the Earned Income Tax Credit, which, through a hefty tax refund, increases the year-end take-home pay of low-wage workers in low-income households, though not, say, a teenager who works but doesn’t need to help his parents pay rent. But Washington has no state income tax, so instituting such a credit in addition to the federal one wasn’t an option. And politically — even morally — the minimum wage is a powerful symbol. “It’s easier to rally people around,” Vigdor explains. “If you want to talk about a policy to benefit the poor that you can actually get done, we’ve seen the evidence come in from all over the country: The minimum wage is something you can get done.”

Indeed. Between the time Seattle Mayor Ed Murray convened the labor-business task force that crafted Seattle’s ordinance and the city council’s passage of it, less than six months passed. “History has its way of unfolding in moments,” says David Rolf, the head of Service Employees International Union 775 in Seattle, and co-chair of the task force. “There is pent-up demand for something to be done about stagnant wages.” Perhaps it’s surprising that $15 happened so quickly in Seattle, he says, “or perhaps it’s more surprising it hadn’t happened sooner.”