Minimum wage fight growing
Battle is contentious heading into 2018 midterm elections
State, local battles heat up heading into midterm elections
After her state’s minimum wage rose in January to $9 from $7.50 an hour, Kathy Rondone got an extra $20 a week in her paycheck.
“To me that’s not coffee money or spare change,” says Rondone, an administrative assistant who lives in Augusta, Maine. “It is a set of windshield wipers when mine broke in a storm last February. I had $20 in the bank and I was able to replace those wipers when I needed them ... “It’s a really big deal.” As the nation heads into a midterm election year, a movement to raise the minimum wage continues to pick up steam on the heels of pay hikes that have lifted the earnings of low-income workers from Alaska to Washington D.C. Advocates in Massachusetts, Maryland, New Jersey and Vermont are teeing up campaigns for a $15-an-hour minimum wage in 2018.
“Some of them started to move forward this year, but typically the minimum wage tends to advance in state legislatures in election years,” says Paul Sonn, general counsel at the National Employment Law Project, which researches and advocates on worker pay issues.
With the federal minimum wage at a standstill since reaching $7.25 in 2009, advocates and unions have banded together to boost the earnings of the lowestpaid at the city and state level, arguing that higher wages shore up finances for low-income families who then fuel local economies with their extra spending power.
The latest efforts come in the wake of low-wage workers in 19 states getting a pay bump at the start of this year, while the minimum wage increased in Oregon, Maryland and Washington D.C. as of July 1, the National Conference of State Legislatures says.
Altogether, 31 states, as well as the District of Columbia, have a higher minimum wage than the one set by the federal government, says the U.C. Berkeley Labor Center.
And there has been a wave of wage hikes at the local level, with 39 cities and counties approving increases versus just five municipalities that had done so prior to
2012, says Ken Jacobs, chair of the U.C. Berkeley Labor Center. House Democrats have proposed raising the minimum wage to $15 an hour by 2024, but they may not get far. President Trump did say during the election campaign he would support a $10 minimum wage but that the decision should be left up to individual states.
Despite recent momentum, lifting the minimum wage remains contentious, with some critics saying rapidly rising wages burden businesses and ultimately cost jobs.
In Missouri, the city of St. Louis raised its minimum wage to $10 an hour in May, but a state law recently went into effect that prevents local municipalities from having a minimum wage higher than the state’s. The result: The pay of more than 30,000 St. Louis workers will shrink back to $7.70 an hour as of Aug. 28.
The battle may not be over. If advocates for a wage increase gather enough signatures, a statewide initiative could be placed on the ballot next November, setting up what Michael Saltsman, a research fellow at the conservativeleaning Employment Policies Institute, calls one of “the biggest fights” on the horizon.
“Even at smaller levels you have seen a reduction of employment to low-wage workers,” Saltsman says. “And now we’re seeing an increased rate of business closures.”
But some business owners don’t believe raising the lowest wages will force entrepreneurs to shut their doors.
“I’m just not buying it that anyone will go out of business,” says Ken Weinstein, owner of the Trolley Car Diner in Philadelphia. Weinstein, who has roughly 80 employees at two restaurants, pays a minimum wage of $8 — higher than the statewide wage of $7.25. He plans to increase the pay a dollar a year until it hits $11. With a higher wage, “we’ll have more loyal, hardworking employees,” says Weinstein, adding that more money in workers’ pockets boosts the local economy.
The specific impact on various local economies has been hard to measure, either because the minimum wage increases are too recent or a pay hike is just one of several forces that may affect the jobs market and other economic conditions, labor officials say.
In June, two studies bolstered arguments on both sides. They focused on Seattle, a frontier in the experiment to boost pay. With an initial hike to $11 in 2015, the minimum wage is now as high as $15 for some employees.
A report from the University of Washington concluded that when wages rose to $13 from $11 an hour in 2016 — the second phase of an increase that ultimately will see the minimum wage hit $15 for all workers by 2021 — businesses may have cut the hours of lowwage employees. Those workers logged roughly 9% fewer hours, and saw an average cut in pay of $125 a month, last year.
But a separate study from U.C. Berkeley that specifically looked at the restaurant industry found the Seattle law led to an increase in the pay of restaurant workers and did not lead to job losses.
The University of Washington study, which looked at various industries, also says the wage hike had little impact on the restaurant sector. The left-leaning Economic Policy Institute says the University of Washington study had issues with its data and methodology, including its exclusion of employees who worked for chains and other companies with many locations.
Jacob Vigdor, director of the University of Washington study, says while there were limitations, a separate survey based on the Seattle business license directory found chains and multilocation businesses were more likely to say they had reduced employment as a consequence of the minimum wage increase.
“It’s true that there is a blind spot in our data,” Vigdor says. “But information from the survey suggests we’re likely underestimating employment impacts.”
Jacobs added that the benefits go beyond the purely financial.
“There have been studies that raising the minimum wage improves the health and future health of low-wage workers and their children,” he says. “It also leads to less child neglect, lower rates of infant mortality and improved mental health. The effects of raising the minimum wage on workers’ lives and the lives of their children are long lasting.”