Washington Town to Serve as Test-Site in Minimum Wage Battle
The Dow Jones Industrial Average is up almost 26% year-to-date. As the stock market continues on its rapidly ascending trajectory, so too has the call to raise the minimum wage. The federal minimum wage, which is currently pegged at $7.25 per hour, has not risen since 2009. In fact, when adjusted for inflation, it has steadily decreased over the past several decades. According to the Bureau of Labor Statistics Inflation Calculator, the minimum wage of $1.60 an hour in 1968 would be worth $10.74 today.
A 2013 report released by the University of California, Berkeley, Center for Labor Research and Education reveals that 52% of the families of fast food workers rely on public assistance programs, costing taxpayers nearly $7 billion a year. In New York, the situation is even more extreme, as 60% of workers rely on assistance. To make matters worse, the traditional conception of fast-food jobs as a safe-haven for teenagers gaining experience before moving on to higher-paying work has all but disappeared. 67% of fast-food workers are adults 20 and older. 68% are the main earners in their families and over one-quarter are raising children.
Organizations such as Fast Food Forward, which provided funding for the study, have organized and participated in strikes, protests, and other community events in an effort to raise the minimum wage to $15 an hour. While pressure on corporations like McDonald’s and Wal-Mart has increased, company spokesmen insist that employment matters are controlled by individual franchisees. Such structuring complicates the issue, as franchisees do not necessarily share in lavish profits and must pay rent and royalties.
Opponents of an increase argue that such a hike would result in higher prices for consumers and greater competition for a smaller number of open positions. Proponents point to new studies that indicate wage increases have little impact on unemployment levels. Either way, the race to $15 is gaining traction. Last week, the Seattle suburb SeaTac passed an ordinance that would raise the minimum wage to $15 an hour (with an annual adjustment for inflation). The measure, known as Proposition 1, affects about 6,300 people who work at the SeaTac International Airport, hotels, and rental-car agencies. The measure also requires that if covered employers have additional hours of work available, “then it shall offer those hours of work first to existing qualified part-time employees before hiring additional part-time employees or subcontractors.”
The results of the election were certified late Nov. 26 after tallies revealed 3,040 “yes” votes (50.64%) and 2,963 votes in opposition (49.36%). While the state’s election laws do not require a recount, one can be obtained by paying 25 cents per ballot. The organization Common Sense SeaTac has said it will make such a request. Opposition groups had earlier failed in a legal challenge to stop the council from adopting the ordinance or putting it on the ballot.
Elsewhere around the country, five states have increased their hourly minimum rates. In November, New Jersey voters approved a measure to raise the minimum from $7.25 to $8.25 after a bill passed earlier in the year was vetoed by Governor Christie. In New York, the minimum wage is set to increase to $8.00 an hour on December 31 of this year and again to $9.00 by the end of 2015. In response to the Berkeley report, New York City Mayor-elect Bill de Blasio stated, “This report shows that not only are fast food chains making inequality worse by paying poverty level wages, but they are also costing New York taxpayers millions by refusing to pay a decent wage. These workers deserve the right to organize, so they can bargain for better pay for the work they do. These economic inequalities are why I am committed to fighting to lift the wage floor in our city and create good-paying middle-class jobs in all five boroughs.”
Whatever the outcome, SeaTac will serve as a fertile testing ground for other cities and states debating increases to their own wage floors. If local businesses run for the hills in SeaTac, the Chicago-economists may be proven right. On the other hand, if the lower and middle-classes gain much-needed financial relief without a corresponding increase in prices for consumers, the fight for $15 may have a chance at national success.