Political slogans crowd out reason on minimum wage

The News TribuneMay 4, 2014 

Honks of support in a driving rain generated smiles from protesters March 8 during a rally in Tacoma of labor unions and low-wage earners in support of a $15 hourly minimum wage.


Like most issues ginned up for a political season, this year’s argument over the minimum wage suffers from a severe case of black-and-white thinking.

In Congress, for example, the partisan fight on the federal minimum wage turns around a Democratic push to increase it to $10.10 an hour from the current $7.25 an hour. Senate Republicans on Wednesday killed that measure.

Maine Republican Susan Collins, one of the most rational people in the Senate, was trying to engineer a compromise. “There’s a lot of room between $7.25 and $10.10,” she said. “Today’s vote is an attempt to score a political point.”

Political points can be costly. The $10.10 minimum – part of a Democratic election strategy to stress income inequality – would probably eliminate around 500,000 jobs, and perhaps as many as 1 million. That’s not a Republican line; it’s the conclusion of a dispassionate and credible study by the nonpartisan Congressional Budget Office. Hardest hit would be poor, low-skilled workers, the very people the increase is supposed to help.

The CBO’s February report also concluded that a $9 minimum would produce a much smaller job loss, somewhere in the neighborhood of 100,000. As Collins asks, why does this have to be an everything-or-nothing debate?

Yet the U.S. Senate looks like the soul of reason compared to Seattle, whose leaders have been stampeded by advocates of a $15 minimum wage.

Various pressure groups have been demanding that Seattle require all employers to pay a $15 minimum in the immediate future – “now,” as the slogan goes.

The shock of an increase that large would be a noose jerk for some small businesses; they’d either fold or lay off employees. Many restaurant servers say the increase could badly hurt their incomes; they make most of their money from tips and fear customers will tip less if they know the help is already getting $15 an hour.

Seattle Mayor Ed Murray has so far outflanked the “15 Now” crowd. With the help of an expert task force spanning labor and business interests, he produced a plan Thursday for phasing in a $15 wage, with more years allotted to small employers and those who offer health benefits. (Big leaps in mandated wages are a threat to optional benefits; to stay in business, some employers will inevitably cut the “extras.”)

Given the realities of Seattle politics, Murray probably can’t do much else.

It’s worth noting, though, that a University of Washington study done for his task force suggested that a half-step toward $15 – $12.12 an hour – could deliver 80 percent of the poverty-fighting effect. Going all the way to $15 wouldn’t buy that much more.

Even in Seattle, there’s a lot of room between $9.32 and $15. It’s just that “Fifteen now!” is a lot easier to chant.

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