Since before Seattle city government embraced the $15 minimum wage, it’s been clear that proponents of the higher wage had larger aspirations and national momentum. (SeaTac can be better understood as a trial balloon in a small town with a unique local economy.) Tacoma voters went to $12. Oregon adopted the wage, allowing for regional variation. And so on across the country, capped this week with California Gov. Jerry Brown signing legislation imposing a $15 statewide minimum wage hours after New York Gov. Andrew Cuomo signed a similar law for the Empire State.
A wage hike initiative will likely be on the November ballot here.
The drive to boost the wage has launched introspection, economic analysis, and speculation. We could fill the blog daily with reports and musings on the minimum wage. Don’t worry; we won’t.
But there are a couple of recent articles we wanted to mention. One cited in this morning’s Friday roundup is important because it suggests changes in the traditional framing of the wage issue. Typically economists have examined minimum wage increases in the context of their effect on job creation. Higher wages lead to job losses, it’s commonly been understood. A slight variant suggests higher wages slow down hiring, particularly for young and unskilled workers.
And losing employment opportunity, the way the young and unskilled enter the workforce and gain the skills that lift them out of the minimum wage, has been seen as a legitimate deterrent to large wage hikes.
Until now. The Washington Post reports on a panel discussion that included experts arguing that the job loss should not be a primary consideration, perhaps not even a consideration at all.
“What should be the criterion about setting a minimum wage?” [Mark Levinson chief economist for the Service Employees International Union] asked. “Should it be the level which produces minimal job loss? Or should it be, in the language of the Fair Labor Standards Act, the maintenance of the the minimum standard of living necessary for the health, efficiency, and general well-being of workers?”
“Why shouldn’t we in fact accept job loss?” asks New School economics and urban policy professor David Howell, who’s about to publish a white paper on the subject. “What’s so bad about getting rid of crappy jobs, forcing employers to upgrade, and having a serious program to compensate anyone who is in the slightest way harmed by that?”
That line of thinking fundamentally challenges the long-held understanding that jobs help forge identity, lead to skill development, and inculcate the discipline and values that support upward social and economic mobility.
Joel Kotkin writes in New Geography that the press for a high minimum wage amounts to a retreat of sorts.
Low-wage workers have been losing ground for decades, as stagnant incomes have been eroded by higher living costs.
This has been particularly tragic for workers in high-priced cities like San Francisco, Seattle, Los Angeles and New York, where the movement has achieved irresistible momentum…
Yet if the campaign to boost the minimum wage reflects progressive ideals, the underlying rationale also exposes the failure of these high-priced cities to serve as launching pads for upward mobility for the vast majority of their residents. In effect, the fight for $15 is a by-product of giving up – capitulating on the idea that better opportunities can be created than the menial service jobs that increasingly are the only opportunities for the urban poor.
He makes a provocative and thoughtful argument. We won’t summarize it further here, but do encourage you to read the whole thing. And, we also recommend Davey Alba’s Wired article, “The $15 minimum wage wins where Silicon Valley fails hard.” Alba writes,
Critics of the $15 minimum wage say it could force businesses to counter their higher labor costs by raising prices or even cutting jobs. Economists are still in disagreement about its possible effects. But some early research shows that the negative effects may not be too great—at least in big coastal cities such as Los Angeles and Seattle, where the costs of living and labor are already high.
But if a higher minimum wage isn’t likely to have a huge impact on Silicon Valley businesses’ bottom lines, it also isn’t likely to do much to help workers on the losing end of the wage spectrum.
In other words, the economic divide between well-compensated coders and the people who drive their buses and clean their offices is stark. And for all of its promises of technological advancement, Silicon Valley has still shown little evidence it’s figured out how to innovate its way out of the inequalities it’s helped to stoke.
The high cost of living in Silicon Valley means that the small boost in the minimum wage — while a large percentage increase for workers at the bottom of the wage scale — “won’t get anyone very far” in high cost metros. Again, Alba raises questions pertinent to this state’s coming minimum wage debates.
We’re not endorsing any of these analysis. The facts will tease out over time. Rather, we’re calling attention to a significant reframing of the debate that will likely influence the coming campaigns.
At Opportunity Washington, we’re not prepared to retreat on the notion that better opportunities can be created through innovation, workforce training, education, and economic growth. Our roadmap charts a better course.