$15 When?

Evan Manvel

The debate about the minimum wage has arrived – again – in Portland.

From an in-depth article in the Portland Mercury:

Spurred on by [City Council candidate Nick] Caleb's call to arms—and emboldened by successes elsewhere in the Northwest—Portland activists were finally ready, on March 14, to rally for higher wages. To say our progressive city is late to the party doesn't quite capture how far we've trailed the rest of the nation.

In the small city of SeaTac, Washington, voters last November had a brutal ballot measure fight – election spending topped $300 per vote as organized labor took on Alaska Airlines and others. The $15/hr measure was more of a living wage ordinance than a minimum wage, as it applies to large airport-related employers, with exemptions for smaller employers.

But voters passed the measure, by 77 votes out of 6,106 cast, and hundreds of employees are seeing benefits. The city is now working through its first enforcement lawsuit. Similar living wage ordinances exist at several airports; given the captive consumer base there’s less worry about border-crossing businesses. (A judge subsequently ruled the SeaTac measure does not apply to the airport, but does apply to nearby businesses.)

While the measure applies to a relatively small number of people, it sparked a larger conversation in Seattle, and around the country – “If little ol’ SeaTac can do it, why not us?”

Also last November, Seattle City Council candidate Kshama Sawant used the "$15 Now" slogan as shorthand for her campaign against, she asserted, an out-of-touch incumbent councilmember. A vote for her, ran the implication, was a vote for economic justice. Helped by a campaign by Seattle’s alt-weekly The Stranger, Sawant managed to pull out an upset win. The debate spilled over to other races, and during the campaign now-mayor Ed Murray pledged to work towards a $15/hr minimum wage as well. After his election, Mayor Murray instituted a $15/hr minimum for city workers.

Seattle’s battle over $15/hour continues, with a mayoral Income Inequality Advisory Committee scheduled to make recommendations by the end of April. Issues such as tip credits, total compensation (benefits, taxes, etc. counting toward the $15), training wages, teenage wages, small business and nonprofits versus large corporations, phase-in schedules and the like are being debated and fought over. An anti-$15 wage group, Sustainable Wages, has formed. And labor groups and other supporters are preparing to take the issue to the ballot if the Council doesn’t move significantly or quickly enough to a $15/hr wage, citing a poll showing 68% support for a $15 minimum wage.

The best part is the public discussion is deepening past a slogan. For years, the effects of minimum wages have been highly debated and studied, with scores of economic studies asserting a variety of effects. Venture capitalist Nick Hanauer co-signed a long piece for The Stranger, “How a $15 Minimum Wage Would Make Everyone Richer”:

The fundamental law of capitalism is that when workers have more money, businesses have more customers. Raising the minimum wage shifts money in the economy to those with the highest propensity to spend, increasing sales for businesses, which in turn leads to hiring, and more sales...

But the term "unintended consequences" implies that all consequences must be negative. That's just not true. There will be unforeseen positive consequences, too, as most studies show: business benefits like higher worker satisfaction and productivity, lower turnover and absenteeism. And those positives cancel out the negatives. Minimum-wage increases have no net negative effect on employment—and a definite positive effect on community health.

While some business owners worry about the large, quick boost in wages the $15 minimum would require, various Seattle activists are pointing to studies demonstrating $15/hour might not be enough to afford living in even a small apartment, especially for an adult with children.

The national debate is also moving, with President Obama calling for an increase in the minimum wage in his State of the Union, and FiveThirtyEight weighing in on the demographics of minimum-wage earners. The New York Times opinion page ran this compelling piece:

With the national debate stuck in the same old rut, states and cities have again become laboratories of democracy. Are they on the right path? For the last 15 years we have been doing research on just this question.

One city we have studied in detail, San Francisco, has passed a dozen labor standards laws since the late 1990s. After adding the effects of other local laws mandating employers to pay for sick leave and health spending, the minimum compensation standard at larger firms in San Francisco reaches $13. Our studies show that the impact of these laws on workers’ wages (and access to health care) is strong and positive and that none of the dire predictions of employment loss have come to pass...

... A full analysis must include the variety of other ways labor costs might be absorbed, including savings from reduced worker turnover and improved efficiency, as well as higher prices and lower profits. Modern economics therefore regards the employment effect of a minimum-wage increase as a question that is not decided by theory, but by empirical testing.

It’s good to see Portland joining the discussion. For too long, Oregon’s second-in-the-nation state minimum wage has left many Oregonians complacent.

If the point of a minimum wage is to ensure people can earn enough to live on, there’s no reason for a standard statewide minimum wage – other than boosting the profits of certain employers. Bill Perry, a lobbyist for the Oregon Restaurant and Lodging Association, lives in a different world: “It’s a political diversion... There's no proof that [the minimum wage] helps or hurts anybody.”

One would think Perry’s tune would change if he were paid the minimum wage. For me, it’s incredibly hard to imagine supporting my family of three on $9.10/hour. (The New York Times has a helpful calculator to see if you can do it.)

What the right minimum wage is for Portland is a tough question –- should it be linked to the Federal poverty line, should it be coordinated with neighboring communities, should it be a living wage, should it be based on 30% of income for housing, should it assume any debts, etc.? Portland is cheaper to live in than Seattle, but the $15/hr minimum probably isn’t enough for Seattle. Also, there’s a state law pre-empting local minimum wages that has to be worked around or overturned.

These are difficult questions, but it's time to grapple with them. Even just raising the minimum wage to Obama’s proposed $10.10/hour would affect hundreds of thousands of Oregonians.

It’s time to organize. From the Mercury:

”I don't believe elected leaders have an appetite for any big social change, frankly,” says Felisa Hagins, political director for SEIU Local 49, which represents thousands of hospital, custodial, and security workers. “It’s up to the grassroots folks to change that appetite. Obama didn’t wake up one morning and say, ‘You know what would be awesome? Raising the minimum wage.’ It was workers standing up.”

There are various groups organizing in Portland; I’m not quite sure which to direct folks to, so here’s the national effort. UPDATE: other groups are below in the comments.

By Evan Manvel March 29, 2014