Seattle’s higher minimum wage is actually working just fine

Seattle do-gooders just shot themselves in the foot

The Seattle City Council is very pleased with itself. Answering President Obama’s call to address what he has decided is “the defining issue of our time” – income inequality – the Council voted unanimously last week to raise Seattle’s minimum wage to $15 per hour. “This is a victory for our movement,” said council member Kshama Sawant, a socialist. “Fifteen in Seattle is just the beginning.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday For the sake of low-wage workers, I hope not. Increasing the minimum wage increases the cost of employing minimum-wage workers. Because of this, many economists worry that a higher minimum wage will translate into fewer jobs for these workers, as businesses take steps to keep their payroll costs down. This debate usually takes place at the federal level. A recent poll of elite economics professors asked whether raising the federal minimum to $9 from its current value, $7.25, “would make it noticeably harder for low-skilled workers to find employment.” Thirty-four percent of the professors agreed with the statement, 32 percent disagreed, and 24 percent were uncertain. The nonpartisan Congressional Budget Office weighed in with a recent study of the effects of raising the federal minimum from its current value to $10.10 – as Obama and congressional Democrats want to do — and concluded that it would probably cost hundreds of thousands of jobs.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Seattle’s new $15 minimum wage is a whole lot more than $9 or $10.10 and therefore offers more reason to be concerned for low-wage workers trying to find jobs. It’s not just the high dollar value of Seattle’s new minimum that is troubling. The current minimum wage in the state of Washington is $9.32 per hour, so Seattle’s new minimum represents a whopping 61 percent increase. Roughly one-quarter of all Seattle workers earn less than $15 per hour. So what we’re talking about is a very large increase in the minimum price of labor for a very large share of Seattle’s existing workforce. This isn’t small beer.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday It is true that the new minimum will be slowly phased in — depending on the size of the business, the period will range from three to seven years. But wages for low-skilled workers have been stagnant or falling for years, so the long phase-in period probably won’t mitigate much of the bite.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Another major source of concern is that only Seattle-based firms are affected. Because it will cost firms located outside the city about 60 percent less to employ minimum-wage workers, fast-food restaurants, retail and grocery stores and other businesses in the Seattle suburbs will be able to offer lower prices than competitors inside the city limits. That is likely to translate into fewer jobs for low-wage workers in Seattle. In some cases, a policy that (may) make sense at the federal or state level doesn’t make sense at the local level. Would a $15 minimum wage that applied only to four blocks in downtown Seattle make sense? Eight blocks? You get the point. The Council summoned the left’s hero _du jour_ in its ordinance: “Whereas, the noted economist Thomas Piketty wrote in his landmark book _Capital in the 21st Century_ , the need to act on income inequality is profound.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Like many who call upon Dr. Piketty, the council seems not to have read his book. Here is what Piketty says about the minimum wage: “It seems likely that the increase in the minimum wage of nearly 25 percent (from $7.25 to $9 an hour) currently envisaged by the Obama administration will have little or no effect on the number of jobs. Obviously, raising the minimum wage cannot continue indefinitely: as the minimum wage increases, the negative effects on the level of employment eventually win out. If the minimum wage were doubled or tripled, it would be surprising if the negative impact were not dominant.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Indeed, it would. Many economists and policymakers favor modest increases from time to time in the federal minimum wage, with modestly higher state minimums as circumstances dictate, judging that the reduction in employment is worth the increase in earnings accruing to low-wage workers. In addition, many economists believe that a modest increase in the federal or state minimum wage will be associated with negligible employment losses. But Seattle’s increase is far from modest, and it applies only to one city. It is very hard to imagine that a Seattle-specific minimum wage of such generosity won’t noticeably hurt the very people its authors are trying to help. The council is correct to worry about the economic condition of the working class. American workers have been suffering for many years now, and the perception that “the top 1 percent” is doing great is widespread and correct. It is natural and commendable for policymakers to want to take steps to help workers. But even a modest increase in the minimum wage isn’t the answer.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday And a city-specific $15 per hour minimum wage is simply reckless.

Seattle’s bold minimum wage experiment

Vying for the title of the United States’ most progressive city, Seattle this week decided to raise its minimum wage to $15 an hour. Depending on which pundit is nattering away, this means Seattle is either going to fall off the map and become a “Mad Max”-style economic wasteland or transform into an egalitarian utopia that inspires sweeping pro-labor activism nationwide. Both sides claim to know, with impressive certainty, how Seattle’s bold experiment will turn out. But that’s exactly what it is: a relatively unprecedented experiment whose effects on workers, businesses and the local economy are unknowable. Anyone who claims otherwise is either lying or misguided. Despite literally hundreds of studies focusing on the minimum wage, top economists are still uncertain about the consequences of raising it. In a survey of several dozen elite academics last year, exactly zero said they had a strong sense of what happens to the lowest-skilled workers when you require companies to pay them more. In the absence of a reliable forecast, here’s a framework for thinking through both what’s likely to happen as Seattle adopts the highest minimum wage in the nation and whether other cities should follow suit. Those opposed to raising the minimum wage typically argue that if you increase the cost of something, people will buy less of it, whether we’re talking about socks or labor. That’s true to a point, but the magnitude of the effect really depends on how sensitive buyers are to changes in price. For small changes to current costs, demand for labor looks pretty inelastic. In other words, studies have found, you’re not likely to see mass layoffs if the minimum wage goes up a touch. Instead, a modest minimum-wage increase is likely to be a transfer from employers to employees that will not discernibly depress low-wage employment. That’s a good thing, if you want to improve the lives of the working poor. It’s why the proposal to gradually raise the federal minimum wage to $10.10 seems like a pretty safe idea. At some point, though, if you raise the wage floor too much, you probably do more harm than good. Even Thomas Piketty, a strong proponent of raising the minimum wage (whose work is cited somewhat inaccurately in Seattle’s new ordinance) agrees. “Obviously, raising the minimum wage cannot continue indefinitely: as the minimum wage increases, the negative effects on the level of employment eventually win out,” he writes in “Capital in the Twenty-First Century.” It’s hard to know, based on the evidence we have, exactly when you reach that tipping point. My own guess is that by the time you get to $15 per hour, some more marginal low-skilled positions — grocery baggers, shopping-cart retrievers, busboys — will start disappearing. To the extent that minimum-wage jobs are “tradable” — i.e., moveable across borders — some jobs will just be shifted to where labor is cheaper. But most very-low-wage jobs are probably not tradable; they tend to be concentrated in sectors such as retail, restaurants, hotels, cleaning crews and health care, all services that are hard to perform from afar. One other possible consequence of a $15 minimum wage is that companies will invest in more automation. Think self-checkout machines instead of cashiers. Again, not all low-skilled work can be automated, at least not as quickly as firms will want to reduce headcounts. So some of the burden of a higher minimum wage might fall on consumers, through some combination of higher prices and worse service (longer waits at the coffee shop, say). The good news for Seattle: It’s a pretty rich area with low unemployment. It seems better equipped to absorb the shock from a $15 minimum wage than a lot of other places. Which is maybe why the city feels emboldened to try its “living wage” experiment, and why lots of other cities may not be able to follow in its path. All that said, even if Seattle’s plan does improve the pay of the working poor without reducing employment, raising the minimum wage is still not necessarily the best strategy for cities, states and the nation to combat poverty and inequality in the long run. Mandating higher pay, after all, is a band-aid for much deeper structural problems in the U.S. economy. It addresses the outcomes rather than causes of inequality, which begins in utero and widens throughout childhood and early adulthood. Raising the minimum wage may be the easiest policy to sell to voters, but expanding access to high-quality education (preschool all the way through higher ed), good nutrition and safe, affordable housing are probably more potent ways to improve the lot of the United States’ most disadvantaged families. **Read more about this topic:** Howard Meyerson: Raise wages, create jobs Robert J. Samuelson: Minimum-wage mirage? Katrina vanden Heuvel: Let’s stop subsidizing economic inequality Catherine Rampell: Big Potato’s demand: More taters for tots

Why raising the minimum wage in Seattle did little to help workers, according to a new study

Things seem to be going pretty well since Seattle bumped the hourly minimum wage for large businesses up to $11 last year, from the statewide minimum of $9.47 an hour. Low-wage workers are getting more time on the job and making more money. Fewer businesses are closing, and more new ones are opening. The technology and construction sectors are booming. Even the weather cooperated for a change. The spring was unusually dry in Seattle, which was good for the city's fishing fleet. Yet the actual benefits to workers might have been minimal, according to a group of economists whom the city commissioned to study the minimum wage and who presented their initial findings last week. The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle's overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike. Accounting for these factors, the average increase in total earnings due to the minimum wage was small, the researchers concluded. Using their preferred method, they calculated that workers' earnings increased by $5.54 a week on average because of the minimum wage. Using other methods, the researchers found that the minimum wage hike actually caused total weekly earnings to drop -- by as much as $5.22 a week.   There can be negative effects. Increasing the minimum wage increases the costs of hiring workers. As a result, employers must accept reduced margins or customers must pay steeper prices. If employers cannot stay in business while paying their staff more, they will either hire fewer people or give their workers fewer hours. As a result, even if wages per hour increase, workers' total earnings could decline. Jacob Vigdor, an economist at the University of Washington and one of the authors of the report, speculated that technology could limit the benefits of increasing the minimum wage. If it becomes easier for employers to replace their workers with machines, they will be more likely to respond to wage hikes by making fewer hires. "The economy has changed in ways that give businesses more options for cutting back on labor," Vigdor said. "If you are a person who is trying to make ends meet at the lower rungs of the economic ladder, you might be used to this idea that forces conspire against you. The minimum wage is an effort to try to keep some of these forces at bay, but there are definitely questions about how effectively and for how long." Vigdor and his colleagues used detailed data from the state of Washington on where workers were employed, how many hours they had and how much they were making. They compared the data from Seattle to data from other places across the state to estimate how things might have gone for workers had the minimum wage not changed, a standard method in economic research. They attributed a wage increase of about $0.73 an hour for low-income workers to the minimum wage, and another $0.45 an hour to the improving economy. After the increase, Seattle's workers got about seven more hours in a quarter. Workers' hours increased even more in other parts of the state, however, leading the researchers to conclude that the minimum wage reduced the number of hours worked quarterly by 3.2, roughly 15 minutes each week. Those figures do not include workers without jobs. The economists estimated that the minimum wage decreased the share of workers with jobs by about 1.2 percentage points. Overall, there was almost no effect on workers' average total earnings, but Vigdor pointed out that the average could be misleading. The consequences for many individual workers — both positive and negative — could have been more significant. Workers employed by thriving businesses who did not lose any hours could have enjoyed welcome gains. On the other hand, workers who had a hard time finding a second job to make up for their lost hours might have been earning much less. Vigdor said his group will try to answer these questions in future research with more data from the state on individual workers. An important question is whether among people working in this sector of the economy, younger and less-skilled workers are affected more negatively by increases in the minimum wage, while more experienced workers benefit. "There are parents trying to raise kids on the basis of low-wage work," Vigdor said. "There are teenagers living in families with six-figure incomes." Then there is the question of how businesses and workers will react as Seattle's new minimum wage continues to take effect. This year, the minimum is $13 an hour for workers at large firms, and it will increase to $15 an hour next year.

Forget the $15 minimum wage. Here’s what a sensible compromise would look like.

There’s bad news from Seattle for advocates of a $15-an-hour minimum wage law. Turns out the measure’s costs to the city’s low-wage workers have outweighed benefits by 3 to 1, according to a new city-commissioned study by University of Washington researchers. The average low-wage worker has lost $125 a month because of the higher-wage decree, the study found — even before it is fully phased in. David Autor, a leading labor economist at MIT, told The Post the study seemed “very credible” and suggested that it might have enough “statistical power” to “change minds” in the perennial argument over the minimum wage. Autor was wrong — not about the study’s credibility, but about its potential for moving people off their “priors.” The Seattle study met a furious counterattack from proponents of a $15 minimum. Defenders of the law came armed with a much rosier assessment of its impact by economists at a pro-labor University of California at Berkeley think tank, produced a few days before the more skeptical one came out. It seems that Seattle’s mayor, a big advocate of the $15 minimum, had gotten a heads-up on the impending negative study and asked the Berkeley group to weigh in. Seattle Weekly called it “an object lesson in how quickly data can get weaponized in political debates like Seattle’s minimum wage fight.” We need a more intellectually honest minimum wage debate, one that acknowledges both the intuitive moral appeal of preventing exploitation of the least-skilled, lowest-paid workers — and the countervailing risk of a wage so high that it harms the very people it’s supposed to help. Years of contention have established two points: Very high minimum wages would be counterproductive economically, and a $0 minimum is impossible politically. Between those realities, economists, activists and politicians haggle endlessly. Meanwhile, better-targeted policies for rewarding work by low-income people — such as the earned-income tax credit wage supplement — get short shrift. And so perhaps we should change the subject, from how high we set the wage to how __ we set it, period. The goal: a relatively objective process, as opposed to just picking a number that sounds good to Bernie Sanders or, for that matter, the restaurant lobby. Undemocratic, you say? The author of the federal minimum wage, President Franklin D. Roosevelt, believed that this was an issue best left to technocrats. His first proposal for a minimum wage called on the Labor Department to fine-tune it, industry by industry. Congress rejected that idea, sparing the country a bureaucratic nightmare while creating a political one: a federal minimum wage that can be changed only if lawmakers act. FDR’s methods were clumsy, but his instinct was sound: If government is going to make a rule for the labor market, the least it can do is base it on facts about the labor market. Congress should benchmark the minimum-wage level to historical data, then connect it to an independent adjustment factor, so that when it rises, it does so consistently and in response to shifts in the economy — not the political winds. Consider: Since 1938, the federal minimum wage has not exceeded 54 percent of average private-sector hourly wages, a level it hit in 1968, nor fallen below 28 percent, which is where the $7.25 federal minimum ranks today. The midpoint between those extremes is 41 percent, a number that felicitously resembles ratios between minimum and average wages in other advanced industrial countries. Multiplying 41 percent by the current average hourly wage, $26.22, yields a new federal minimum of $10.75. Phase it in over a few years, index it to wage growth or an equivalent factor — and move on to less contentious topics like health care, or how many angels can dance on the head of a pin. It would require Republicans to make a huge ideological concession. But the payoff for them would be significant: the immediate, and permanent, defusing of an issue that naturally favors Democrats. Businesses might complain. But a 41-percent-of-average-wage minimum wage would not be that big a hit to them, given that more than half of all workers already live in states or cities, such as Seattle, that have raised the minimum wage above the federal level, in response to political campaigns that sprouted in the absence of congressional action. Indeed, to account for local labor markets, Congress might grant states waivers to set their own minimum wages higher or lower than the federal one, provided that they do so by applying the federal methodology to state wage levels. Heaven knows our states and cities could do with one less thing to argue about, too. _Read more fromCharles Lane’s archive, follow him on Twitter or subscribe to his updates on Facebook._ **Read more here:** The Post’s View: $15 is the wrong goal for minimum-wage advocates Ben Spielberg: Seattle’s higher minimum wage is actually working just fine Charles Lane: The risks of California’s minimum-wage increase Katrina vanden Heuvel: How a $15 minimum wage went from ‘extreme’ to enacted

Is Seattle headed for a $15 minimum wage?

Washington State already has the nation’s highest minimum wage. But if the leading contender to become Seattle’s next mayor gets his way, the state’s largest city could raise the bar even higher. State Sen. Ed Murray (D), who finished first in the city’s Aug. 6 primary election, said Tuesday he would press for a $15-an-hour minimum wage if he wins in November. Murray said he would phase in the new wage, beginning with city employees and contractors, then expand it to include fast-food and big-box store employees. Murray is seen as the more centrist candidate in the race. Incumbent Mayor Mike McGinn (D), a neighborhood activist known for riding his bicycle to work, is trying to portray Murray as the business-backed candidate in a city where business backing can be more of an albatross than an advantage. Murray would also create a new Office of Labor Standards to require compliance with city labor laws. Murray finished first in a crowded field in August, taking 29.8 percent of the vote. McGinn, who ousted incumbent Mayor Greg Nickels four years ago and has had a rocky tenure leading the Emerald City, finished second, with 28.6 percent of the vote. Murray is seen as the front-runner ahead of the November general election showdown.    *[WSU]: Wayne State University There’s a political aspect to Murray’s proposals. As the Seattle Times’s Jim Brunner writes, making the case for a higher minimum wage “serves as a counter to McGinn’s effort to portray himself the true progressive and Murray as a tool of downtown business interests.”    *[WSU]: Wayne State University It’s not clear the city council would pass a minimum wage hike even if Murray wins in November. Even some of the more liberal members of the city council have questioned the wisdom of raising the rate, and the city’s Chamber of Commerce, which still holds some sway at City Hall, says it wants to pursue other options before hiking the minimum wage. The state’s minimum wage, at $9.19 an hour, is already the highest in the nation. Earlier this month, California Gov. Jerry Brown (D) signed legislation that would eventually raise his state’s lowest wage to $10 an hour.    *[WSU]: Wayne State University Seattle isn’t the only city in the region pushing for a higher wage. Voters in SeaTac, a small town in south King County that surrounds the region’s international airport, will vote on an initiative to raise the minimum wage in their city this November. Supporters and opponents of that measure had raised $440,000 to spend for or against the initiative in a city of just 11,852 registered voters. That’s about $37 per vote, the Seattle Times reported in August.    *[WSU]: Wayne State University

Cities are passing higher minimum wages – and leaving the suburbs further behind

Last week, Seattle's city council voted to raise the local minimum wage to an unprecedented $15 an hour, more than twice the federal wage threshold and well above the next most generous cities in America. That rate, which will be phased in over seven years for the smallest businesses, currently tops $10.74 in San Francisco, $10.66 in Santa Fe, N.M., and $10.15 in San Jose. It's significantly higher than the $11.50 wage planned for the District, and the $13.09 hoped for in San Diego.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday In the rush to measure these cities against each other, though, a more relevant comparison often gets left behind: Nearly all of these cities has hiked or plans to hike the minimum wage well above the suburbs right next door. "Seattle is a particularly interesting example in that the city is moving pretty quickly to pay what is going to be a significantly – _significantly_ \-- higher minimum wage to its workers than will be the case in surrounding King County," says Alan Berube, a senior fellow with the Brookings Institution Metropolitan Policy Program. "It’s opened up about a 60 percent difference between itself and the state of Washington minimum wage."    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday And Washington has the highest state minimum wage in the country. By Berube's calculation with colleague Sid Kulkarni, there are actually more low-wage jobs currently paying less than $15 in the King County suburbs outside of Seattle than inside of the city itself. And many of the workers who will benefit from the new wage in Seattle -- 40 percent of them according to a University of Washington analysis -- actually live outside of the city.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday The landscape of minimum wage increases points to a significant but seldom- discussed trend that has been taking place across the country: The poor who would benefit most from higher wages increasingly live in the suburbs. And a lot of the kinds of jobs they do have been moving out there, too.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Those shifts underscore why cities and suburbs, where they can -- as Washington D.C., Montgomery County and Prince Georges County have -- should aim to coordinate minimum wage hikes. Or, at least, they should try to in the absence of consensus among state or federal policymakers. As for the alternative, Seattle in particular now raises questions at a scale we've never seen before about what happens when you boost wages in just one piece of a labor market.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday "I’m sure there will be much to study," says Lawrence Mishel, the president of the Economic Policy Institute.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Says Berube: "If a city is raising its minimum wage by a dollar or two dollars relative to its surrounding jurisdictions, the tradeoffs aren’t that large. But at six dollars, I think people will begin to sit up and take notice." What we might expect to happen, he says, are border wars between neighboring jurisdictions, although the competition theoretically crosses borders in both directions. Suburban communities could lure businesses (and the employment that comes with it) with the promise of lower labor costs. But so, too, could a city like Seattle win the competition for workers with higher wages. Michael Reich, an economist at the University of California at Berkeley, has studied with Arindrajit Dube and T. William Lester the impact of higher minimum wages on county pairs across the country that straddle state borders separating different wage standards. Consistently, their work has found no negative employment effects in those areas that have raised the minimum wage.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday "What’s going on?" Reich asks. "A lot of the attention goes to the demand side of the labor market and the argument that if you raise the price of labor, you’re going to want to demand less of it if you’re an employer. It’s almost like a law, a downward sloped demand curve. But, we teach in Econ 101 that markets are determined by labor demand and supply sides." Most of the jobs we're talking about here are in sectors like retail, hospitality and restaurants. Those businesses spend a lot of money on employee turnover. But with better wages, Reich says, employees are likely to stay longer, meaning they become more experienced and productive, and the costs of replacing them and retraining workers declines. Those benefits offset some of the higher costs of labor. The rest of the costs, Reich says, may be passed onto consumers in barely perceptible ways -- a few cents on the dollar in restaurants. One question, though, is whether these more productive, higher-paid workers will come into a city like Seattle from the suburbs at the expense of teenagers and the poor already living there.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday None of this existing data has considered a wage hike as high as Seattle's, or a differential as large as the one that will open up between Seattle and surrounding communities with the state minimum wage of $9.32. It's likely that those suburbs will benefit in other ways. Suburban residents who earn $15 an hour working in Seattle will bring that money back home to the suburbs. And to the extent that this wage alleviates poverty there, suburbs that have been ill prepared by history to provide services for the poor will need to invest less public money on such subsidies. Whatever happens in Seattle in the coming years, though, may not necessarily tell us much about how similar scenarios could play out elsewhere. Seattle has a strong labor market and tourism economy. It's unlikely that hotels and restaurants who cater to high-income residents and visitors would be willing to relocate to the suburbs just to save on low-wage labor. That's not a gamble every city can make. In a city like Hartford, Conn., Berube says, the median income is actually lower than in surrounding suburbs, making it much harder for the city to go it alone on a minimum wage hike. The same could be true in a city like Atlanta, which contains a smaller share of the metropolitan region's population and economy than Seattle does relative to its region. Washington, D.C., is more akin to Seattle. It's a comparably sized city with a strong economy, nested within a larger region of about four-and-a-half million people. Washington and two of its neighboring counties in Maryland, though, have gone a different route, coordinating minimum wage increases in the last year (without Virginia, that is). "That was a superb, thoughtful, innovative move, to have everybody move together," Mishel says. The politics of accomplishing that won't work everywhere, though. And cities like Chicago, New York and Los Angeles currently considering a higher wage aren't making plans right now in conjunction with their neighbors.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday "I think if they take their time and they do the research, and they look at where their workers live and where low-wage work is in the region," Berube says, "they’ll come to the realization that this should be about the metropolitan labor market rather than what’s going on in the city alone." Of course, the much simpler solution would be a federal minimum wage increase, or state hikes. But so much of the momentum on this issue right now is in cities. In Seattle, that $15 standard was set by two newly elected local politicians, a new progressive mayor and a socialist city council member. It's possible that they'll prove a $15 minimum wage isn't as harmful as critics warn, and then the suburbs will find it easier to follow them.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday "Right now it’s just about first movers, seeing who else comes along, where the conversation moves," Berube says. "It’s probably going to occur in these elite and successful cities. And then it’s a question of does it try to trickle down to the next layer of cities who might be less well positioned to undertake this? Or does it move out to their wealthy suburbs, the Montgomery Counties of the world who also can probably afford to do this?"

A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals

When Seattle officials voted three years ago to incrementally boost the city's minimum wage up to $15 an hour, they'd hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect. The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found. The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed. On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum. The paper's conclusions contradict years of research on the minimum wage. Many past studies, by contrast, have found that the benefits of increases for low-wage workers exceed the costs in terms of reduced employment -- often by a factor of four or five to one. "This strikes me as a study that is likely to influence people," said David Autor, an economist at the Massachusetts Institute of Technology who was not involved in the research. He called the work "very credible" and "sufficiently compelling in its design and statistical power that it can change minds." Yet the study will not put an end to the dispute. Experts cautioned that the effects of the minimum wage may vary according to the industries dominant in the cities where they are implemented along with overall economic conditions in the country as a whole. And critics of the research pointed out what they saw as serious shortcomings. In particular, to avoid confusing establishments that were subject to the minimum with those that were not, the authors did not include large employers with locations both inside and outside of Seattle in their calculations. Skeptics argued that omission could explain the unusual results. "Like, whoa, what? Where did you get this?" asked Ben Zipperer, an economist at the left-leaning Economic Policy Institute (EPI) in Washington. "My view of the research is that it seems to work," he said. "The minimum wage in general seems to do exactly what it’s intended to do, and that’s to raise wages for low-wage workers, with little negative consequence in terms of job loss." Economists might not readily dismiss the new study as an outlier, however. The paper published Monday makes use of more detailed data than have been available in past research, drawing on state records of wages and hours for individual employees. As a result, the paper is likely to upend a debate that has continued among economists, politicians, businesses and labor organizers for decades. In particular, the results could exacerbate divisions among Democrats, who are seeking an economic agenda to counter President Trump's pitches for protectionism, reduced taxes and restrictions on immigration. Meanwhile, states and cities around the country are continuing to implement increases in the minimum wage. In November, voters in Washington approved an increase in the statewide minimum to $13.50 an hour by 2020. The idea is popular in conservative states as well. In Arizona, for instance, the minimum wage will be $12 an hour in 2020 after voters there cast ballots in favor of a hike. "If I were a Seattle lawmaker, I would be thinking hard about the $15 an hour phase-in," Autor said.  Card and Krueger conducted a survey of fast-food restaurants in the two states while New Jersey was implementing an increase in the minimum wage. They found that restaurants in New Jersey had, in fact, added more workers to their payrolls more than restaurants in neighboring Pennsylvania, where the minimum wage remained constant. Since then, economists have brought better data and more sophisticated statistical methods to bear on the question of the minimum wage, but without resolving the debate. Their studies examined the overall numbers of workers or their annual incomes, but lacked precise information on how much workers were being paid by the hour. As a result, past research might be less reliable because the results might reflect many workers who are not paid low wages, said Jacob Vigdor, an economist at the University of Washington and one of the authors of the new study. Their research, using detailed records from the state of Washington, addresses that problem. "That’s really a step beyond what essentially any past studies of the minimum wage have been able to use," said Jeffrey Clemens, an economist at the University of California, San Diego who was not involved in the research. When the authors of the study took the same approach as Card and Krueger, measuring overall employment in the restaurant industry, they found similar results. The minimum wage did not substantially affect how many people were working in the industry or how many hours they were working. The data, however, shows that about seven in 10 workers in Seattle restaurants make more than $13 an hour, suggesting that the overall level of employment in the industry might not be a reliable guide to how the minimum wage affects workers with low pay. Indeed, while employment overall did not change, that was because employers replaced low-paying jobs with high-paying jobs. The number of workers making over $19 an hour increased abruptly, while the number making less than that amount declined, Vigdor and his colleagues found. Vigdor said that restaurateurs in Seattle -- along with other employers -- responded to the minimum wage by hiring more skilled and experienced workers, who might be able to produce more revenue for their firms in the same amount of time. That hypothesis has worrisome implications for less skilled workers. While there those with more ability might be paid more, junior workers might be losing an opportunity to work their way up. "Basically, what we’re doing is we’re removing the bottom rung of the ladder," Vigdor said. There could be another explanation for the results, however: the fact that large employers are not included. It could be that even if employers with only a single location cut payrolls, large firms expanded at the same time, giving low-wage workers other opportunities to earn money.   Reich's study uses more conventional methods in research on the minimum wage, relying on a publicly available federal survey. His group's data did not allow the researchers to distinguish between high- and low-wage workers at a given firm, but they were able to separate large firms' locations in Seattle from those outside the city. Their results from the University of California accorded with past research. The minimum wage increased wages for workers in the restaurant industry, without reducing employment overall -- in contrast to the findings from the University of Washington. "Their results are so out of the range," Reich said. One way of explaining the disagreement could be that small businesses in Seattle have been forced to downsize in response to the increased minimum wage, while larger firms have expanded. Yet when Vigdor and his colleagues examined the overall number of workers at small firms with a single location, they did not find that employment had decreased. That fact could could suggest that small businesses have responded to the increase not by downsizing but instead by hiring more experienced workers. There's another explanation for the growth in high-paid jobs and the decrease in lower-paid ones. The authors of the study argue that that's occurring because employers are focusing on high-paid workers and leaving low-paid workers out, but it's possible that something far more positive is happening. Seattle's economy is booming, and in a booming economy, more workers are likely to get raises or find jobs that pay better, and it may be that phenomenon -- of workers getting raises, promotions or better paying jobs -- that explains the shifts in the labor market the researchers see in Seattle. Vigdor and his colleagues sought to address this problem, in essence, by constructing an index based on data from other parts of the state of Washington where local economies performed similarly to Seattle's before the increases in the hourly minimum. Low-wage employment declined in Seattle relative to this benchmark. Even compared to parts of the state with similar economies, there was less low-wage work in Seattle, suggesting that the minimum wage might have forced employers to cut some of those positions. The method Vigdor's group used to develop this index is on the cutting edge of economic research, but it is not perfect. It is possible that Seattle's economy simply took a different direction at the same time as the minimum wage began to increase -- even compared to economies in other places that seemed similar to Seattle's before the vote. EPI's Zipperer argued that was the best explanation, given how pronounced the gains were for workers making more than $19 an hour. "You’re just seeing an independent shift in the Seattle labor market toward higher wage employment," he said, calling the figures for better-paid workers "a red flag." The broader national economy could have an effect on the results as well. In the past, noted San Diego's Clemens, increases in the minimum wage have occurred when the economy was expanding rapidly and prices are going up. Employers could expect to ask consumers to pay more and to give their workers wages anyway. Increases in the minimum wage might just have been part of the cost of doing business. Currently, though, inflation is at historically low levels, and the minimum wage in Seattle will be indexed to inflation after it reaches $15 an hour, forcing firms to plan for the long term. Vigdor agreed that the effects of increasing the minimum wage could differ by time and place. "The effect of the minimum wage depends on a lot of things. It depends on where you’re starting from. It depends on what kind of economy you’re raising it in," Vigdor said. "There is no one 'the effect of the minimum wage.' " That means that future research on the question could come to different conclusions. Vigdor said he looks forward to receiving criticisms of his group's paper and suggestions for improving their approach. "It’s really important to emphasize it’s a work in progress," he said.

The consequences of raising the minimum wage aren’t surprising

Regarding the June 27 Economy & Business article “Low-income workers hurt by pay hike”: A new study on Seattle’s minimum wage experiment is not an outlier. It is consistent with the best empirical research published on the subject, according to a summary published in 2015 by the Federal Reserve Bank of San Francisco. The article referenced a 1994 study by economists David Card and Alan Krueger that suggested that an increase in New Jersey’s minimum wage had increased employment. While this study is often mentioned as having overturned the economic consensus, it was debunked in the same economics journal that originally published it. The flawed data set used by Mr. Card and Mr. Krueger implausibly reported dramtic employment shifts after the New Jersey wage hike — in both directions. An analysis using better data confirmed that a higher wage requirement did indeed reduce employment in New Jersey. The federal minimum wage, adjusted for inflation since its creation in 1938, has averaged $7.40 an hour. We shouldn’t be surprised that cities such as Seattle experience consequences when they move far beyond this. ****Rick Berman** , Washington** The writer is executive director of the   Employment Policies Institute.

So far, the Seattle minimum-wage increase is doing what it’s supposed to do

What happens when a study shows that a minimum-wage increase is simply having its intended effect? When it’s found to raise the pay of low-wage workers without causing much in the way of the job displacements that critics rail about? Unfortunately, one thing that apparently happens is the findings get misinterpreted (though, as I’ll show, this is partly due to the omission of key statistical information).  The study also found that, relative to historical trends, the rate at which low-wage workers affected by the increase stayed employed rose by about three percentage points. For workers in the control group, it was up four points. Thus, absent the minimum-wage increase, there’d arguably be one percentage point more affected workers employed in Seattle. Putting aside for a moment the critical question of whether these changes are actually meaningful in a statistical sense, these outcomes fit comfortably into a view well understood by minimum-wage advocates and increasingly accepted by economists: most increases have their intended effect of lifting the pay of low-wage workers with little in the way of job losses. To be clear, the fact that the policy has its intended effect doesn’t mean every affected worker ends up ahead (there is no policy on Earth that is always and everywhere costless to its intended beneficiaries). It means that the vast majority of low-wage workers end up with higher earnings. Even if some workers lose some hours of work, their annual income often goes up (which, in fact, is another finding from the study). Minimum-wage opponents who claim that increases will cripple local economies, either overall or even in their low-wage sectors, thus get no help from the Seattle results. The study’s authors point out that one challenge in teasing out minimum-wage effects was that the Seattle economy “boomed” over this period, posting growth rates that “tripled the national average” and “outpaced Seattle’s own robust performance in recent years.”  The study also has several important limitations, noted by minimum-wage scholar Michael Reich. First, as Reich explains, “The authors did not report the standard errors of the estimates, even though their calculations indicated that the employment effect was not distinguishable from zero.” This is a serious omission; policymakers cannot make informed decisions without that information. Second, because of data limitations, the study analyzes employment changes solely in single-establishment firms. That means, for example, that retail and restaurant chains — groups significantly affected by the minimum wage — are generally left out of the study (multi-establishment employers account for half of Seattle’s jobs). In fact, when all establishments are included in the analysis, employment outcomes were relatively more positive in Seattle than in the control group, both for all firms and for lower-wage firms. These and other problems, especially the omission of standard errors, need to be resolved. But for now, here’s what we can conclude: After Seattle raised its minimum wage, low-wage workers’ employment, hours and wages all rose substantially. Neighboring areas that had similar trends in these variables before the increase — and that, by the way, were also bound by the highest state minimum wage in the country when the increase took effect — saw even larger employment and hours gains. In other words, relatively high minimum wages in Seattle and in Washington more broadly have had their intended impact and have been perfectly compatible with a strong economy, one that’s handily beating national averages. As the Seattle minimum wage phase-in progresses, and the differential between the wage there and elsewhere grows larger, perhaps we’ll get results that really do fall outside the bounds of the standard outcomes. But that hasn’t been the case thus far.

‘Free lunches’ like the $15 minimum wage may hurt the people they’re meant to help

Progressives generally support better labor protections, including policies meant to provide higher wages, more predictable working hours, increased bargaining power, and greater access to paid family leave, sick leave and overtime. And given the raw deal that workers get so often, these are all policies that I generally support as well. But lately, as Democratic leadership has increasingly embraced the far-left impulses of its base, I’ve become convinced that the left needs to think harder about the unintended consequences of such benevolent-seeming proposals. In isolation, each of these policies has the potential to make workers more costly to hire. Cumulatively, they almost certainly do. Which means that, unless carefully designed, a lefty “pro-labor” platform might actually encourage firms to hire _less_ labor — or at least to shift toward contract labor that’s exempted from these cherished protections. These are not mere hypotheticals. A two-tier labor market, in which some lucky workers are entitled to generous compensation and job security and the rest are hung out to dry, already plagues countries, such as France and Japan, with traditionally stronger labor protections than the United States. But these are not outcomes that lefty politicians and policy wonks seem keen to grapple with. It’s easier, or perhaps more politically convenient, to assume that “pro-worker” policies never hurt the workers they’re intended to help. Take the proposal to raise the federal minimum wage to $15 an hour, a policy endorsed in the Democratic Party’s new “Better Deal” platform. An increase in the federal minimum wage, stuck at $7.25 for eight years, is long overdue. But more than doubling it would likely result in massive job losses and cuts in work hours. We’ve already seen preliminary evidence that raising wages in Seattle to $13 has produced sharp cuts in hours, leaving low-wage workers with smaller paychecks. And that’s in a high-cost city. Imagine what would happen if Congress raised the minimum wage to $15 nationwide. In West Virginia, the median hourly wage is just $14.79; in Arkansas, it’s $14.48; and in Mississippi, it’s a depressingly low $14.22. A $15 minimum wage could be binding on more than _half_ of jobs in these states. In fact, in every state (not including D.C.), it could cover at least a quarter of positions. That might seem like good thing. Why wouldn’t you want to improve the living standards of as many people as possible? The answer: You won’t actually be helping them if making their labor much more expensive, much too quickly, results in their getting fired. Similarly, a year ago, the Obama administration issued a new overtime rule. This rule massively expanded the universe of white-collar employees entitled to time-and-a-half pay for working beyond 40 hours per week. Before, white-collar workers earning salaries up to $23,660 were generally entitled to overtime. The new rule more than doubled the threshold, to $47,476. The new threshold was to be implemented in one fell swoop, starting last December. There was fierce debate within the Obama administration about the wisdom of such an abrupt increase, but those who mentioned this to me declined to ever do so on the record. Meanwhile, left-leaning groups cheered the millions whose pay was about to go up. Then, a court blocked the rule in November, and several weeks ago the Trump administration began the process of revising it. During his confirmation hearings, Labor Secretary Alexander Acosta cautiously suggested that a cutoff of about $33,000 might be appropriate, though he wanted to spend more time looking at the effects on workers and firms. As strange as it feels to say something nice about policies being pursued by the Trump administration, this might be a better approach. On this and other labor issues, says Michael Strain, director of economic policy studies at the conservative American Enterprise Institute, “We need to be debating whether a cost-benefit test is passed, something on which reasonable people can disagree.” Instead, Strain says, a lot of thoughtful, well-meaning people on the left seem to be looking for a free lunch — that is, for policies with all winners, no losers and no costs. (Kinda like the right’s attitude toward tax cuts, I might add.) Here I confess that I’ve been guilty of this. I’m often drawn to studies and stories about pro-labor policies that “pay for themselves.” And while there often _is_ a pro-business or macroeconomic case to be made for policies that help workers, I pledge to be more mindful about potential unintended costs as well. Readers, I hope you’ll hold me to this. And anyone else peddling free lunches, too. **Read more on this topic:** The Post’s View: Sobering news for $15 minimum-wage boosters Charles Lane: Forget the $15 minimum wage. Here’s what a sensible compromise would look like. E.J. Dionne Jr.: Obama, overtime, and the value of hard work Catherine Rampell: Macron attempts a feat that Trump wouldn’t dare The Post’s View: What does it mean to be progressive?

The decreasing value of the minimum wage in every state, visualized

Seattle's enactment of a $15 minimum wage is a dramatic increase for the city. (Or, it will be, once it is fully enacted in 2017.) (And if it survives legal challenges.) But as is often pointed out when a minimum wage increase is improved, minimum wages rarely keep up with the devaluation of the dollar.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday We decided to visualize that. Using conversion metrics created by Oregon State University and data on the minimum wage from the Department of Labor, here's how the federal minimum wage has evolved over time, in nominal dollars (what the wage was set to that year) and in 2014 dollars.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Every so often, the minimum wage goes up — but it hasn't kept up with the value of the dollar. The picture doesn't look much different when you do the same calculation for the states. Watch the jump from 2013 to 1968 when the animation below loops. (We had to make some editorial decisions on the values here. If a state didn't have a minimum wage, for example, we used the federal limit. If it had a range of minimum wages, we used the highest value.) The highest minimum wage in 2014 dollars was Alaska's $2.10 in 1968 — over $14 today. Or, in other words, slightly less than Seattle residents may see in three years' time. Assuming the dollar's value doesn't change too much.

One thing the new CBO minimum wage report proves: state policies matter

_CORRECTION: An earlier version of this post incorrectly cited the range of hourly earnings affected by a federal minimum wage hike to $10.10. It would affect anyone with earnings within a range of $4.25 _in states that currently match the federal level_.   _    *[WSU]: Wayne State University Expect to hear a lot from both sides of the aisle about the new minimum wage report out Tuesday from the nonpartisan Congressional Budget Office. On one hand, it found that a federal minimum wage hike would bump up earnings for 16.5 million people. On the other hand, 500,000 people will lose their jobs. It’s not exactly the most stunning conclusion—a minimum wage hike will help a lot and hurt a few. But embedded in the nearly 40-page report are two other takeaways — both of which show why states matter so much to federal policy. There’s the obvious: State policies serve as laboratories of policy. And CBO compared them to one another to suss out what effect a national wage hike might have. The other may not be so clear, but it’s an important one: the population affected by a new federal policy can vary widely by state thanks to how state and federal policies interact. Here’s how:    *[WSU]: Wayne State University The nation is a patchwork of minimum wage laws. About half of America’s workers live in the 29 states where the minimum wage matches the federal minimum of $7.25. A fourth live in states where it’s $8.01 or higher. (Washington state’s is highest, at $9.32.) And a fourth of workers live in states where it’s somewhere in the middle. As with almost all economic policies, there would be ripple effects from a federal hike. Obviously, anyone earning below the new proposed federal minimum of $10.10 would be affected. But so, too, would some workers who are just above that level. If you’re earning four dollars above the current minimum wage and suddenly that rises by nearly three dollars, your pay might get bumped by market forces even if it’s still technically above minimum wage. But the size of that ripple effect, it turns out, is directly related to a state’s minimum wage. In fact, it’s kind of easy to calculate, according to CBO, and it can have a big impact on what slice of a state’s residents is affected. The size of the ripple effect above and beyond the proposed federal $10.10 level is about half of the difference between that and the state’s current minimum. Here are some examples from CBO that show how the math works out: Some 29 states currently match the federal minimum of $7.25. If they do nothing and Congress passes a federal hike to $10.10, then the hike would affect the lives of anyone whose hourly earnings fall within a $4.25 range — a wide swath of people. In California, however, the range of workers affected by 2016 falls within a $0.15 range — a narrow slice of earners. State policies on their own have direct effects on the lives of residents, but they also interact with federal policy. A worker earning $10.25 in California might not be affected by a $10.10 federal minimum wage — perhaps because the ripple effect would already be absorbed by hikes to the state minimum wage. But someone earning the same amount in neighboring Arizona might see pay bumped up thanks to the interactive effect of state and federal policies.

The downside of doubling the federal minimum wage

Bernie Sanders, Martin O’Malley and a host of other well-intentioned liberals want to hike the federal minimum wage to $15 an hour. This is a badly misguided idea. And Hillary Clinton has been right to avoid endorsing it, despite strong pressure from the left. Don’t get me wrong. At just $7.25 an hour, today’s federal minimum wage is absurdly low. This Friday marks exactly six years since it was last lifted, and it looks especially paltry compared with its peak value in 1968 ($10.97, in today’s dollars). It could stand to rise more than a smidgen above what Sanders has rightly called today’s “starvation wage.” And research has indeed shown that modest minimum-wage hikes need not kill jobs. Depending on how price-elastic — that is, price sensitive — you think employers are, they can absorb a small increase in labor costs by, for example, accepting narrower margins or passing along higher costs to customers. In some cases, higher wages might even benefit employers of low- skilled labor, by attracting more productive workers and reducing turnover. Raising the federal minimum wage to $10.10 — a policy change that most Americans support — would likely boost the earnings of about 16.5 million workers while reducing total employment by about 500,000, according to the Congressional Budget Office. This is a trade-off that many allies of low-wage workers are willing to accept — particularly those of us who worry that anti- poverty spending programs may allow employers to further depress worker pay. But none of this suggests that there aren’t limits. Even the most diehard of labor advocates probably wouldn’t endorse a $50-an-hour minimum, because they know such a wage floor would price pretty much all low-skilled laborers out of a job. So if a $10.10 minimum probably would help more low-wage workers than it would hurt, and a $50 minimum would almost certainly hurt more than it would help, what about $15? In some parts of the country, where the cost of living is relatively steep, a $15 minimum wage might put more money into the pockets of workers while eliminating relatively few jobs. Think of cities such as New York, San Francisco, Chicago, Los Angeles, Seattle and the District, all of which have either proposed or already adopted a $15 minimum. Even in these expensive cities, though, don’t be surprised if you see fewer busboys, grocery baggers and other low-level jobs. The higher wage floor will make at least some such positions cost-prohibitive. In other, lower-cost parts of the country, however, a $15 minimum — which, remember, is more than double the current federal level — would likely throw many, many more people out of work. In Arkansas, the median hourly wage is $14.01. In Mississippi, it’s an astoundingly low $13.76. It’s likewise below $15 in six other states, and three U.S. territories. That means a $15 minimum wage could be binding on more than half of the jobs in these places. In economically troubled Puerto Rico, where the current federal minimum of $7.25 is arguably already too high relative to labor productivity, it could affect more than three-quarters of all jobs, depending on how many employers found a way to wrangle an exemption. Yes, it’s distressing that wages in these states and territories are so low. But trying to change the prevailing wage — rather than just the bottom of the income distribution — by fiat is likely to cause massive job losses. There are better ways for federal policymakers to raise the minimum wage and effectively grant the lowest-paid workers a much-needed raise. One approach is to phase in any minimum wage increases gradually (which, to Sanders’s credit, will be a feature of the $15-minimum legislation his office told me he’ll introduce Wednesday). Another is to adjust wages based on regional cost of living, and then index those levels to inflation going forward. This may sound impossibly cumbersome. It’s not. Multiple resources out there calculate variations in costs of living, such as MIT’s Living Wage Calculator. IKEA uses this tool to help determine how much to pay workers in different parts of the country. The impulse to boost the wages of the neediest workers is a good one, particularly given how low-skilled workers’ bargaining power has been ground down over the decades. And by all means, we should throw our support behind workers who are organizing to try to extract fairer pay from well-heeled multinational conglomerates. But doubling the federal minimum in one fell swoop would hurt many of the workers it’s intended to protect. **To read more on this topic:** Dylan Matthews: $15 minimum wage is a terrible idea Mike Konczal: Raising minimum wage reduces poverty George F. Will: It’s iffy Robert J. Samuelson: Minimum-wage roulette?

Economists disagree on whether the minimum wage kills jobs. Why?

What happens when the minimum wage goes up? In theory, this should be simple. A hike in the minimum wage raises the cost of low-wage workers. That should make firms less likely to hire those people. Unemployment should rise. Basic Econ 101, right? Except that the real world seems to be much murkier. Yes, a number of studies have found a link between a higher minimum wage and higher unemployment. But many others, such as this recent paper from U.C. Berkeley that exploited differences across state borders, have found no effect at all. Quite often, hiking the minimum wage by a buck or two doesn't appear to worsen unemployment in any noticeable way.    *[WSU]: Wayne State University This poses a conundrum. Why might the basic theory be wrong? That's a question that John Schmitt of the Center for Economic and Policy Research explores in this new paper (pdf). He runs through a slew of theories for why a modest minimum-wage hike might not affect employment levels much. Basically, there are a variety of ways that labor markets can respond — and they don't all involve more unemployment: _   _    *[WSU]: Wayne State University **1) Employers can respond by cutting back on benefits or hours or training:** Yes, a higher minimum wage means that companies have to pay their low-wage workers more. But that doesn't mean they have to hire fewer workers. Perhaps businesses adapt by cutting back on other things, like health-care benefits or hours. Schmitt notes, however, that there's little conclusive evidence that employers do this.    *[WSU]: Wayne State University **2) Employers can respond by cutting wages for _other_ , higher-paid workers.** One survey found that half of employers faced with a minimum-wage hike "would delay or limit pay raises/bonuses for more experienced employees." If that actually happens, then the minimum wage might help low-wage workers at the expense of better-paid workers. This could even boost GDP in the short run if poorer workers are more likely to spend the cash.    *[WSU]: Wayne State University **3) Companies can raise their prices in response.** One obvious possibility is that firms with lots of low-wage workers — say, fast-food restaurants — simply pass along their extra costs to customers. One major literature review found that a 10 percent hike in the minimum wage leads, on average, to a 4 percent increase in prices at companies affected.    *[WSU]: Wayne State University **4) Companies can just settle for fewer profits.** Another possibility is that companies just take the hit and accept lower profits rather than laying people off. Research on whether this happens is pretty inconclusive, however.    *[WSU]: Wayne State University **5) Employers can respond by becoming more efficient.** If minimum-wage workers suddenly cost a bit more, perhaps businesses will react by trying to squeeze more productivity out of them. Schmitt notes that there's some evidence that this happened in fast-food chains in Georgia and Alabama. Managers started requiring better attendance and asking their employees to take on extra duties in response to a minimum-wage hike.    *[WSU]: Wayne State University **6) Workers themselves might respond by voluntarily working harder.** Schmitt notes that there have been plenty of theoretical papers written about how people might work harder and be more productive if they're suddenly paid more. Some of these models could even explain why a hike in the minimum wage doesn't lead to higher unemployment. But, Schmitt adds, there's not much empirical evidence here.    *[WSU]: Wayne State University **7) Companies might actually _save_ money from a minimum-wage hike because there's less employee turnover.** If minimum-wage workers get a raise, they're far more likely to stay on the job longer. And that's good for employers. After all, constant worker turnover is a pain — there's the cost of screening, of training, of vacancies. Schmitt notes that lower turnover could ease the costs of higher wages. That could explain why employment levels don't really change.    *[WSU]: Wayne State University So what's the right answer? A mix of these, most likely. "Individual establishments will follow different paths that depend on a complex set of circumstances that economists... cannot fully capture or explain," Schmitt concludes. Some companies bump up their prices in response to a minimum-wage hike. Others make their workers take on more tasks. Still others reap the benefits of reduced turnover. This could explain why economists often have trouble establishing a clear link between a higher minimum wage and higher unemployment. There are lots of possible ways that companies can adjust to modest wage hikes besides hiring fewer people. (Obviously if the minimum wage shot up to $100 per hour, that'd be much more disruptive, but no one is proposing that.) The basic economic theory is alluring. But the world isn't always that simple. **Further reading:**    *[WSU]: Wayne State University \--The full paper (pdf) by CEPR's John Schmitt, titled "Why Does the Minimum Wage Have No Discernible Effect on Employment?"    *[WSU]: Wayne State University \--Four things to know about President Obama's proposal to raise the federal minimum wage to $9 per hour.    *[WSU]: Wayne State University \--Adam Ozimek argues that we could settle this debate by experimenting with randomized trials for the minimum wage.    *[WSU]: Wayne State University

Seattle’s smart take on how to help the poor: subsidize their transit

Earlier this week, transit agencies in and around Seattle launched a new, two-tiered fare system: one rate for most riders in a region full of high-wage tech jobs, and another for those living on less than 200 percent of the poverty line. The project — from the same city that last year brought us a $15 minimum wage, and a higher property tax to fund preschool for the poor — was designed to blunt rising inequality in the region, and it could aid as many as 100,000 low-income people there. Riders who qualify get a special "ORCA Lift" card for use on all of the region's transit systems that will automatically deduct $1.50 fares, as low as half of the standard rate on some services. A couple of other U.S. cities, including San Francisco, have tried something similar, but none has aspired to reach as many riders as Seattle hopes to. From the New York Times:    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico To make matters even simpler, riders can verify their eligibility by showing that they've already qualified for other benefits like Medicaid, food stamps, or Temporary Assistance for Needy Families. This kind of transit discount is one of the smartest subsidies any city can offer to the poor for a host of reasons. It's much cheaper — and politically more feasible — to enable the poor to commute to cheaper housing than to try to build that affordable housing in the expensive neighborhoods where many of them work. Transit is already heavily subsidized by public money, and this system directs that subsidy to the people who need it most. Improving public transit is also a tangible way to tackle unemployment among would-be workers who have a hard time keeping a job because they have a hard time getting to it. A discount transit program is also, quite simply, a way to boost the incomes of the poor by returning more money to their pockets. If you spend as much on coffee as you do commuting every day, the difference doesn't sound like much. But it's the equivalent of a modest raise for people making minimum wage, even in Seattle.

Maybe raising the minimum wage isn’t such a good idea after all

It’s been almost five years since the federal minimum wage went up from $6.55 to $7.25. Now, House Democrats are demanding to “Raise the wage” to $10.10 and just filed a discharge petition calling for a vote on The Fair Minimum Wage Act that will do just that. This move follows President Obama’s recent executive order to raise the minimum wage to $10.10 for federal contractors starting next year.    *[WSU]: Wayne State University As the president said, “In the wealthiest nation on earth, nobody who works full time should have to live in poverty — nobody, not here in America.”    *[WSU]: Wayne State University But is raising the minimum wage the best way to reduce poverty? Douglas Holtz-Eakin, who is a former director of the Congressional Budget Office, doesn’t think so. In fact, he doesn’t think the federal government should have a minimum wage at all. In a speech to the National Economic Club on Thursday, Holtz-Eakin said that raising the minimum wage “is an incredibly unwise thing to do.” Not only does it put low-skilled, low-educated workers at risk of losing their jobs, but also it prevents those who most need a job from getting one, he said. This conclusion comes from recent research by Jonathan Meeks and Jeremy West of Texas A&M University showing that raising the minimum wage reduces net job growth primarily by hampering job creation in expanding industries. The effect is especially strong for younger workers and in industries with a higher share of low-wage workers. Nearly five years after the recession officially ended, less educated and inexperienced workers are still finding it hard to get a job. And, if Meek and West’s analysis of how the minimum wage affects job creation is right, these people are going to be unemployed for even longer and bear the brunt of a federally mandated wage increase. As Holtz-Eakin explained, although increasing the minimum wage might cause some people to lose their jobs, it’s more likely to keep people out of work. But, there’s more to the story. Holtz-Eakin pointed out that the dividing line between those who are in poverty and those who aren’t is whether the person has a job. The poverty rate is four times higher for people who aren’t working than for those who are, he said. Holtz-Eakin isn’t opposed to paying people more. What he opposes is a federal mandate making employers pay more. He would prefer allowing companies to decide whether to pay workers more, as the retailer The Gap has said it will do, or to allow states to set their minimum wage rates above the federal rate, as 21 states and the District of Columbia have done. Having a job is a good way to climb out of poverty. A recent report from the Congressional Budget Office showed that raising the minimum wage from $7.25 to $10.10 would lift 900,000 people out of poverty.    *[WSU]: Wayne State University That figure partly explains why Holtz-Eakin dismissed the CBO’s estimates as not being big enough to worry about. With 45 million people in poverty, helping fewer than one million doesn’t give much bang for the buck. Holtz-Eakin made it clear that there’s a better way to win the war on poverty. The earned income tax credit is that way. The EITC, which has been around since the Ford administration, gives workers a refundable credit against their taxes that varies with income and family size and that phases out as earnings increase. The Urban-Brookings Tax Policy Center describes the earned income tax credit as a subsidy for low-income working families and estimates that 26 million households will receive $60 billion in reduced taxes and refunds due to the EITC in 2015. (The tax reform proposal released by Rep. Dave Camp (R-Mich.) would raise more than $200 billion over 10 years by significantly scaling back the EITC.)    *[WSU]: Wayne State University When people say that the EITC lifts families out of poverty they’re referring to statistics, like those from the Census Department, that show that the EITC and other refundable credits cut the poverty rate by 3 percentage points.    *[WSU]: Wayne State University Policy analyst Ben Gitis of the American Action Forum gave another reason to prefer expanding the EITC to raising the minimum wage. A lot more of the people living in poverty get the EITC than earn the minimum wage.    *[WSU]: Wayne State University Regardless of whether it’s the minimum wage or the earned income tax credit, you have to have a job to get the benefit. And, with mounting evidence that raising the minimum wage stifles job creation, that may be why raising the minimum wage isn’t such a good idea after all.

Don’t leave tipped workers behind in the fight for fair wages

As the cost of living in the District skyrockets, it should be no surprise that workers are pushing for a $15 minimum wage. Parts of the District are awash in wealth, and yet many of us are struggling to make rent and pay for groceries. What should be surprising — given our city’s restaurant boom — is that the DC Restaurant Association would go out of its way to spread absurdities about the horrors of paying a decent wage to workers.  Including tipped workers ensures their survival without hurting restaurants — despite what the DC Restaurant Association says to the contrary. Here is what is at stake: The “sub-minimum wage” allows D.C. restaurants to pay tipped workers $2.77 an hour. Ending it would mean tipped workers get the same minimum wage as everyone else, plus tips.  Higher wages for tipped workers haven’t hurt the restaurant industry like the DC Restaurant Association claims. There are more choices for places to eat out in San Francisco and Seattle, despite no sub-minimum wage. The DC Restaurant Association claims that total income of tipped workers declines without a low sub-minimum wage — as if consumers suddenly stop tipping. In reality, Seattle and San Francisco tipped workers make more than their D.C. counterparts.  If you earn $10/hour, you make $20,800 a year — if you work 40 hours with no vacation. We aren’t talking luxury here, we are talking survival. The DC Restaurant Association also says customers won’t be able to afford eating out. But research shows the average increase for a meal would be less than a cup of coffee. I found identical restaurant menus online for three national chains in the District, Seattle and San Francisco. The “Legendary Garlic Fries” appetizer at Gordon Biersch is $6.50 in DC, and a quarter more ($6.75) in Seattle. At the Daily Grille in San Francisco, the Grilled Idaho Trout will cost you $21.50, compared with $19.95 in DC. Braised beef tacos at Rosa Mexicano are $17 in DC, but $18 in San Francisco. For me, it’s worth an extra quarter for Legendary Garlic Fries so my waiter can afford groceries. There is a huge divide in the District. The rich keep getting richer while the rest of us struggle to get by. But we shouldn’t be forced to struggle because a few rich restaurant owners don’t want to pay hard-working people a decent wage. D.C. residents will vote on $15 an hour this November on a ballot measure that includes tipped workers. But we can’t afford to gamble. In a city as wealthy as the District, there’s no reason to leave any workers behind. Everyone should benefit from D.C.’s boom, especially the people who live and work here. The mayor’s proposal compromises the well-being of workers choosing between groceries and rent. That isn’t a compromise any member of the council should be a part of. The DC Restaurant Association is trying to scare us into believing that decent wages are beyond their means. That’s false. It’s time for the mayor and the D.C. Council to join us in advocating for workers to get a minimum wage of $15 an hour. Anything less is unacceptable.

Seattle to enact $15 minimum wage

The Seattle City Council voted unanimously Monday to raise the minimum wage to $15 an hour, equaling the highest minimum wage in the nation. The law will phase in the higher wages over a three- to seven-year window, depending on the size of a company. Corporations that employ more than 500 workers will have to pay $15 an hour by 2017  if their employees don’t receive company-paid health care. Smaller businesses can wait until 2019 to reach the higher rate. All workers will receive the highest wage by 2021. “The people who work for a living have basically seen no increase in their incomes since the 1970s,” Mayor Ed Murray said in an interview. “With the federal government fairly stuck, and as we see states more and more adopting that same dysfunction, cities are the place to lead right now.”  Murray spent his first four months in office hammering out an agreement to raise the wage through a task force that included labor, business and nonprofit representatives. Labor groups had threatened to put a wage hike on the ballot this year if the city didn’t increase the wage on its own. In the end, 21 of the 24 members of the task force agreed on the outlines of the bill. Some representatives of the business community said they backed the agreement because the bill gives credit to companies that provide generous benefit packages.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday But the measure isn’t in the clear yet. The International Franchise Association will file a lawsuit seeking to overturn what it called the “unfair and discriminatory minimum wage plan” adopted by the council,  IAF President Steve Caldeira said. The bill counts franchises as large corporations, so the owner of a single restaurant franchise would be treated as if he or she employed more than 500 people. “These hundreds of franchise small-business owners are being punished simply because they chose to operate as franchisees. Decades of legal precedent have held that franchise businesses are independently owned businesses and are not operated by the brand’s corporate headquarters,” Caldeira said. Murray said the negotiations were difficult  but worth the effort. “I realize for business, it seems too radical, and I realize for some it seems not radical enough,” Murray said. “I think it’s an answer to the radical experiment that’s been going on in this country since the 1980s,” he went on. “It’s destroyed the middle class, and it almost destroyed the economy. … It’s time to take the risk.” Washington already has the highest minimum wage in the nation, at $9.32 an hour. In November, voters in Seatac, a small suburb that’s home to the region’s international airport, voted to impose a $15 minimum wage for airport workers. That measure, too, is being challenged in courts.

Harold Meyerson: A higher minimum wage may actually boost job creation

The standard argument — really, the only argument — against raising the minimum wage is that it will lead to job loss. The argument is beloved by die-hard opponents of raising the wage because it provides them with a veneer, however flimsy, of concern about the welfare of the working poor. Economic studies have repeatedly shown that argument to be spurious. Now the latest survey of 350,000 small businesses from Paychex, a payroll provider company, and IHS, a business analysis firm, provides strong indications that the exact opposite may be true. In April, the Paychex/IHS survey, which looks at employment in small businesses, found that the state with the highest percentage of annual job growth was Washington — the state with the highest minimum wage in the nation, $9.32 an hour. The metropolitan area with the highest percentage of annual job growth was San Francisco — the city with the highest minimum wage in the nation, at $10.74. This suggests that the relationship between a high minimum wage and job creation needn’t be inverse. If anything, it suggests that relationship is direct. To be sure, the Bay Area economy is booming, but minimum-wage opponents would nonetheless have us believe that mandating the payment of close to $11 an hour must cause job loss at least in fast-food joints and Chinatown’s kitchens. San Francisco shouldn’t be creating more small-business jobs than any other city. It’s theoretically impossible. So much for the theory. San Francisco is doing exactly that. The compatibility of higher wage standards and job creation shouldn’t come as a surprise. A classic study of fast-food employment by former White House economic adviser Alan Krueger and Berkeley economics professor David Card demonstrated that raising the minimum wage does not lead to an appreciable decline in employment. Opponents of a higher wage have invoked a recent study by the Congressional Budget Office that argued a raise in the national minimum wage from $7.25 to $10.10, as President Obama has advocated, might cost up to 500,000 jobs. But even that study said that the raise would increase the wages of 16.5 million Americans — at least 33 times the number of those who might lose jobs — and elevate 900,000 people out of poverty. What critics of a higher minimum wage ignore is that, by putting more money into the pockets of the working poor — a group that necessarily spends nearly all its income on such locally provided basics as rent, food, transport and child care — an adequate minimum wage increases a community’s level of sales and thereby creates more jobs. The Los Angeles Economic Roundtable recently concluded that raising the hourly minimum to $15 in Los Angeles County — the nation’s largest, home to 10 million people — would generate an additional $9.2 billion in annual sales and create more than 50,000 jobs. The Seattle City Council is expected to enact a proposal from Mayor Ed Murray, developed by a business-labor task force, to phase in a $15 citywide minimum wage over seven years. The progress of the measure is a testament not only to the fast-food workers nationwide who’ve been campaigning for $15 hourly pay from McDonald’s and other chains but also to local labor and community leaders. They injected that issue into last year’s mayoral election, winning a pledge from Murray to push for the $15 standard. With direct employee-employer collective bargaining close to a dead letter in the private-sector economy, the likely success of the Seattle measure points to a new model for bargaining, in which progressive governments respond to worker pressure by legislating the wage increases employees can no longer win in the workplace. In a nation where most people’s wages have been stagnant or dropping for many years, and where the combination of globalization and de-unionization has stripped from workers the bargaining power they once possessed, the role of government in addressing wage issues has become more central than ever. By investing in job-creating public works, by raising the minimum wage, by lowering taxes on those corporations that give their workers annual productivity increases and raising taxes on those that don’t, government can take up the slack created by the suppression and near-disappearance of private-sector unions. But first, it must dispel the canard that raising wages destroys jobs. Now it can point to San Francisco and Washington as evidence that it doesn’t. _Read more fromHarold Meyerson’s archive or follow him on Twitter._ ****

Wonkbook: Will Seattle’s $15 minimum wage experiment spread across the nation?

_Welcome to Wonkbook, Wonkblog’s morning policy news primer by Puneet Kollipara. To subscribe by e-mail, clickhere. Send comments, criticism or ideas to Wonkbook at Washpost dot com. To read more by the Wonkblog team, click here._    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Wonkbook’s Number of the Day:** 2.9 million. That's the number of Americans whose applications for Medicaid as part of the health-care overhaul still haven't been processed.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Wonkbook’s Chart of the Day:** The decreasing value of the minimum wage, visualized and animated.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Wonkbook's Top 5 Stories:** (1) Seattle's minimum wage experiment; (2) climate rule's hurdles; (3) turning around the VA; (4) health-care technical difficulties; and (5) the legal-but-illegal NSA program.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _ **1\. Top story: The likely limited spread of Seattle's minimum-wage boost**_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Seattle's new minimum wage sets a standard for big cities.** "The City Council here went where no big-city lawmakers have gone before on Monday, raising the local minimum wage to $15 an hour, more than double the federal minimum, and pushing Seattle to the forefront of urban efforts to address income inequality. The vote, economists and labor experts said, accentuates the patchwork in wages around the country, with places like Seattle — and other cities considering sharply higher minimum pay, including San Diego, Chicago and San Francisco — having economic outlooks increasingly distinct from those in other parts of the nation. Through much of the South, especially, the federal minimum of $7.25 holds fast." _Kirk Johnson inThe New York Times_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Will Seattle's hike spread? Depends.** "The agreement came together with remarkable speed because Seattle Mayor Ed Murray appointed a committee of labor, business, and community leaders to hash things out on their own with a firm deadline....The looming deadline for everyone was to head off a battle of ballot initiatives in the fall....Not every state has the type of binding ballot proposals that posed a real threat if talks had collapsed....Seattle also lacks much in the way of mega-retailers and major fast-food chains, so the largest national companies weren’t involved in negotiating the compromise....Don’t forget that Seattle is quite progressive, too....So many factors converged to make Seattle a trailblazer that its path will be tricky to follow." _Karen Weise inBloomberg Businessweek_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Charts:** The decreasing value of the minimum wage, visualized. _Philip Bump inThe Washington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Background reading:** Focus of minimum wage debate goes local. _Ricardo Lopez in theLos Angeles Times_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **How the minimum-debate could tilt the Senate control battle.** "Democrats who are trying to get an initiative raising the minimum wage on the ballot in Arkansas tell me they have now collected more than the requisite number of signatures — which, if certified, could boost turnout for Dem Senator Mark Pryor, possibly helping determine control of the Senate in this fall’s elections....A minimum wage ballot initiative could give Pryor a turnout boost among core voter groups who tend to drop off in midterms, and any single race could sway the battle for the Senate....Dems hope it will give core voters a reason to vote amid a bad national environment." _Greg Sargent inThe Washington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Guess who isn't an ally of Seattle minimum-wage hike advocates: Piketty.** "Thomas Piketty, the economist and author of Capital in the Twenty-First Century, has ignited the economic left in a way that hasn't been seen since the first flames of the Occupy movement. The nerdy, unassuming Frenchman has become the patron saint of the class struggle. But did everyone read every page of Piketty's entire 600-page tome before quoting it? Nope, if Seattle's new minimum-wage law is any evidence." _Heidi Moore inThe Guardian_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Charts:** What if the rise in income inequality had never happened? _Josh Zumbrun inThe Wall Street Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **** **CASSELMAN: When living wage is minimum wage.** "Ultimately, low-wage workers are the victims of a broader trend of stagnant wages that stretches back long before the most recent recession. Adjusted for inflation, average hourly wages of all non-managerial workers rose less than 1 percent between 2002 and 2007, when the recession began, compared to nearly 7 percent growth in the five years before that. Economists aren’t sure what’s behind that stagnation: outsourcing, automation, the decline of unions, changes to the tax code, or, more likely, a combination of several factors. But whatever the causes, anemic earnings growth means more people are trying to get by on low wages." _Ben Casselman inFiveThirtyEight_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **SCHAEFFER: A feel-good policy that will backfire in the end.** "Certainly a raise of this magnitude sounds compassionate. News stories profiled the likes of Somali immigrants and working mothers who were excited about this wage hike. But while boosting the minimum wage is promoted as a way to alleviate poverty and makes many of us 'feel good,' it’s likely to backfire on the very workers it’s intended to help....Far better for states and communities to focus on targeted assistance programs to help those who are truly in need and then get out of the way to ensure greater economic growth and job creation for all." _Sabrina Schaeffer inForbes_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **HILTZIK: The minimum wage is hardly radical at all.** "The $15 minimum is nearly 50% higher than the federal minimum of $10.10 an hour being pushed by President Obama and implemented by his executive order for new federal contracts — but it's not as radical as some doubters claim. For one thing, inflation will pare it down by the time it's fully implemented in 2021 (though it will be indexed to inflation after that). For another, in a high-wage city like Seattle, $15 is not as far out of line as it might seem on first glance. As calculated by Arindrajit Dube, a minimum-wage expert at the University of Massachusetts, it's about 59% of the median wage in the city." _Michael Hiltzik in theLos Angeles Times_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _ **Top opinion**_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **THOMA: How bad data hurts economics.** "To make progress in economics, it is essential that theoretical models be subjected to empirical tests that determine how well they can explain actual data. The tests that are used must be able to draw a sharp distinction between competing theoretical models, and one of the most important factors is the quality of the data used in the tests....Progress in economics is frustratingly slow, and a key reason for this is the lack of quality data — sometimes the data does not exist at all....While the passage of time will increase the amount and span of economic data, the data will never be as good as it is for disciplines that have access to experimental data, and the ability to move economic theory forward will suffer as a result." _Mark Thoma inThe Fiscal Times_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **ORSZAG: Toward a progressive tax policy.** "In the hoopla over whether Thomas Piketty’s data on growing global inequality are correct, an important question about how to address the problem has been obscured. Piketty describes his own global wealth tax idea as more of a 'useful utopia' than a practical policy suggestion. Is there anything more plausible that can be done?...Neither a progressive consumption tax nor an inheritance tax may be politically viable in the U.S. at the moment, but everything in life is relative. Compared with a global wealth tax, they seem eminently doable." _Peter R. Orszag inBloomberg View_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **WINSHIP: Nuance on wealth inequality.** "The fair-minded take-away is that we don’t know whether or not wealth concentration in the hands of the top one percent has risen, though it is safe to say that it has risen in the rest of the top ten percent. Zucman and Saez may prove right that the top one percent’s share has increased, but even in that case their estimates may overstate the rise. If you think I am reaching a tortured conclusion, again consider that the most careful analysis of wealth inequality trends up until 2014 (the Kopczuk-Saez study) showed wealth inequality flat to declining through 2000. It received a small fraction of the attention that the Zucman- Saez results are getting, for reasons that are useful to ponder." _Scott Winship inForbes_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **BERNSTEIN: The cost of inequality to growth in households' income.** "Occasionally I run into people who want to argue that the increase in inequality is just the benign outcome of 'just desserts' as economist Greg Mankiw frames it. It may boost those at the top, but not at the expense of others. By this metric, not so. The growth of unequal outcomes has been and will continue to be costly to those on the wrong side of the divide." _Jared Bernstein inThe Huffington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **COHN: Why the Obamacare subsidy errors (probably) aren't that big of a deal.** "Could the problem actually be a lot worse than Administration officials think — or are letting on? Sure. Even if it's not, there are undoubtedly some people getting the wrong amount of financial assistance. Those who are getting too much will have to pay the difference, presumably by next year's tax deadline. Those who are not getting enough are entitled to more assistance — and in many cases they need it, because they are extremely poor. The amounts might not be big in most cases. But there are bound to be some exceptions....The question is how widespread the problems are — and how long it takes the Administration to fix them." _Jonathan Cohn inThe New Republic_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Random acts of kindness interlude:** Formerly homeless man helps homeless people.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _ **2\. The EPA climate rule has more hurdles than a track meet**_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **What challenges does the EPA climate rule face?** "The carbon rule that the Environmental Protection Agency issued Monday is President Barack Obama’s last best hope for a legacy on climate change, and could fulfill environmentalists’ hopes for dramatically lessening the United States’ reliance on coal. But first, the proposed rule has to overcome some obstacles: the courts, the states, opponents in Congress and whoever occupies the White House after 2016. The rule’s other big enemy could be the clock." _Erica Martinson inPolitico_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **The EPA rule could change majorly if states aren't up to the task.** "The Obama administration will revise its proposal to fight climate change in the next year if individual states show they can’t meet the targets, the head of the Environmental Protection Agency said. Gina McCarthy, administrator of the agency that wrote the proposal issued yesterday, said she expects 'significant' revisions in the state emission goals before a final rule is issued next year." _Mark Drajem inBloomberg_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **The collective action hurdle: Will other nations join in?** "America's push to cut carbon-dioxide emissions is partly intended to spur other large emitters — especially China — to cut their own emissions more aggressively to tackle climate change. But will it work? Other countries already have national policies aimed at cutting carbon-dioxide emissions, and they are much further along than the U.S....Persuading other countries to follow suit won't be easy. Many developing countries are on a long-term path of trying to industrialize their economies and continue to resist big domestic cuts in carbon emissions." _Gautam Naik inThe Wall Street Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **At least they may come to the table.** "President Barack Obama's proposal to curb U.S. greenhouse gas emissions might improve the chances of completing a global climate treaty but is unlikely to defuse demands by China, India and others for Americans to do more." _Joe McDonald in theAssociated Press_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Explainer:** Ambitious, but not enough. _Brad Plumer inVox_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **The toxic politics of climate change also could serve as a hurdle...** "For the next year, the battle will be fought in the court of public opinion, with everything from grassroots lobbying to cable TV sound bites to onslaughts of political ads. Conservatives will organize around two main messages: that forcing power plants away from reliably low-cost coal will drive up the price of energy and jeopardize our energy supply, and that higher-cost energy will hamper economic growth." _Ben Adler inGrist_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Wonky fact-check aside:** No, the rule isn't an economy killer, or a national energy tax. __Ben Geman inNational Journal_ and _Glenn Kessler inThe Washington Post_._    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **...and there will be legal challenges....** "The final say on U.S. EPA's broadly written power plant rule will undoubtedly be made by a court....Even before yesterday's announcement, the most contentious issue in this rule has been whether EPA has the authority to regulate beyond an individual power plant and allow states to switch fuel sources, increase renewable energy capacity and push for demand-side efficiency — options two through four." _Tiffany Stecker inClimateWire_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **...plus, GOP actions to limit cap-and-trade...** "The spread of carbon trading systems could be limited by politics. New Jersey Governor Chris Christie, a Republican, withdrew from the Northeast trading group known as the Regional Greenhouse Gas Initiative in May 2011, calling it a costly failure. Jan Brewer, Arizona’s Republican governor, cited concerns about costs when she decided to take the state out of the western trading system that California is now implementing." _Jim Snyder and Christopher Martin inBloomberg_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **...and legislation.** _Maria Gallucci inInternational Business Times_. (Granted, its odds of becoming law without a GOP president and Congress aren't good.)    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **** **But the legal challenges would likely face an Obama-friendly court.** "The fate of President Barack Obama's new regulations for curbing greenhouse gas emissions from existing U.S. power plants likely lies in the hands of a Washington, D.C., appeals court he largely reshaped through a series of key appointments....Though there's no guarantee judges vote along party lines, the court's composition makes it more likely the regulations would face sympathetic judges in a likely court challenge." _Lawrence Hurley inReuters_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **How the rule could cause a government-shutdown fight.** "President Obama’s new climate change rule could result in a partial government shutdown this fall if Republicans attempt to block the regulations through the appropriations process....They used the tactic last year in an omnibus spending bill....Senate Democratic leaders would almost certainly reject an appropriations the bill that blocked the climate rules, however, so passage of a bill with an EPA rider could lead to another government shutdown battle." _Erik Wasson inThe Hill_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **No, the rule wouldn't kill coal.** "While it stifles increases in demand, the blow isn’t fatal as has been portrayed by industry advocates, including Senator Mitch McConnell, the U.S. Senate minority leader from Kentucky, who has equated Obama’s rules with a 'war on coal.' Utilities are seen by analysts as boosting consumption of the fuel at their most efficient plants to ensure power-grid reliability." _Mario Parker inBloomberg_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Another challenge: There's a downside to natural gas.** "Conventional wisdom, strongly promoted by the natural gas industry, is that natural gas drives down American emissions of carbon dioxide, by substituting for carbon- rich coal. The climate stabilization plan announced by the Obama administration on Monday relies on that. But in other ways, cheap natural gas drives emissions up....Some of the factors are hard to quantify, making it uncertain whether, in the long term, natural gas’s net effect is positive for climate control." _Matthew L. Wald inThe New York Times_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Other environmental/energy reads:**    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Remember when the GOP supported cap-and-trade? _Chris Arnold inNPR_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday U.S. imposing some tariffs on importers of Chinese solar panels. _Diane Cardwell inThe New York Times_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **PORTER: Paltry start in curbing emissions.** "Tim Jackson, professor of sustainable development at the University of Surrey in Britain, uses a nifty back-of-the-envelope calculation to underscore the challenge of giving the world’s poor a shot at prosperity while preventing a global climate disaster....Professor Jackson calculates, by 2050 the world economy could emit at most six grams of carbon dioxide for every dollar it produced. We are nowhere near that efficient. Advanced nations emit 60 times that much, according to the Energy Information Administration. Developing nations emit 90 times that much. It’s enough to make a sustainable development expert despair." _Eduardo Porter inThe New York Times_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **BRYCE: Repeating mistakes of the past.** "The hard reality is that the EPA’s new rules will have negligible impact when it comes to soaring global carbon dioxide emissions and surging global demand for coal. Just as important, the new rules are merely repeating the policy mistakes of the past and, in doing so, risk making the U.S. too dependent on a single fuel source. And this new policy mistake is happening even though the U.S. leads the world in carbon dioxide reductions." _Robert Bryce inNational Review_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **CHAIT: Echoes of Obamacare in conservative reaction.** "When the Obama administration launched its health-care reform project five years ago, conservatives were held back by the sheer lack of interest in the issue they had accumulated over the decades. Conservative intellectuals had paid hardly any detailed attention to the specific problems of health-care economics and found themselves grasping for generalized right-wing bromides. (They have played vigorous catch-up in the years since.) The same rough dynamic can be seen now as Obama launches a major climate change initiative." _Jonathan Chait inNew York Magazine_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Kids say the darndest things interlude:** 21 kids who are too literal for their own good.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _ **3\. Can the new VA head or Congress turn things around?**_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **You're fired!** "Next in the dock are VA’s Senior Executive Service members. Congress is considering legislation that would treat them like second-class federal employees by stripping them of certain civil service protections or weakening those protections almost to the point of meaninglessness. The House and a Senate panel have approved legislation that would allow the secretary to fire or demote the department’s SES staffers, who would have no appeal rights. On Thursday, the Senate Veterans’ Affairs Committee will hold a hearing on somewhat more reasonable legislation that would provide for appeals, albeit significantly truncated." _Joe Davidson inThe Washington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Charts:** Actually, the VA already fires its employees much more than other agencies do on average. _Josh Hicks inThe Washington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Could civilian care fix the VA mess? Congress weighs in.** "A few opponents of the recently proposed legislation say it's already hard enough to lure top executives to the VA, and these bills could drive them into higher-paying jobs elsewhere. Another private sector solution on the table is a sort of voucher system, which Sen. John McCain has been pushing....To address the crisis in wait times, the VA is ramping up a system that would explicitly allow veterans to get private care if they've been waiting more than 30 days for medical attention. Some in Congress have put forth measures to do the same. But that's something the VA already has the authority to do — in fact, in 2013 the department spent $4.8 billion on care outside the VA system." _Quil Lawrence inNPR_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Reid to Republicans: Let's at least try to make a deal.** "Senate Majority Leader Harry Reid, D-Nev., offered Senate Republicans a vote on a House-passed veterans bill in exchange for allowing a vote on a Senate Democratic bill Tuesday, but questions over amendments could stifle action....It’s unclear if McCain’s bill will be part of the picture as Reid has been reluctant to allow many amendments to legislation on the floor." _Humberto Sanchez inRoll Call_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Hey, Senate: What about those stalled VA nominees?** "As the turmoil over the VA scandal unfolds, three top posts in the Department of Veterans Affairs remain vacant because of congressional foot-dragging toward full Senate confirmation. A fourth key job — the department's inspector general — has remained vacant for nearly half a year. The White House itself has yet to even name a nominee for that post. There is plenty of blame being tossed around." _Billy House and Michael Catalini inNational Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **The Cleveland Clinic's top doc could be the VA chief nominee.** "The White House is considering nominating the chief executive of the Cleveland Clinic to be the next secretary of the Department of Veterans Affairs, people familiar with the matter said. Delos 'Toby' Cosgrove has led one of the nation's most prestigious hospital systems and is a decorated Vietnam veteran." _Damian Paletta, Christopher Weaver and Janet Adamy inThe Wall Street Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Why Cosgrove?** "When Cosgrove took leadership of the clinic in 2004, it had notoriously low patient satisfaction rating despite delivering excellent care. Clinic leadership, in an October 2013 interview, detailed the steps it took to boost patient-satisfaction scores. Namely, the clinic created an online portal to allow patients to schedule appointment, expanded access to electronic medical records and made it easier for patients to communicate electronically with doctors....The clinic’s cardiac unit has been ranked tops in the country each year since 1994 by the U.S. News & World Report." _Jason Millman inThe Washington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Young whippersnappers interlude:** Teens react to '90s Internet.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _ **4\. Health care is currently experiencing technical difficulties; please stand by**_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **2.9 million Obamacare Medicaid enrollees still don't have application processed.** "Those delays — due to technological snags with enrollment websites, bureaucratic tangles at state Medicaid programs and a surge of applicants — betray Barack Obama’s promise to expand access to health care for some of the nation’s most vulnerable citizens. As a result, some low-income people are being prevented from accessing benefits they are legally entitled to receive. Those who face delays may instead put off doctors appointments and lose access to their medicines, complicating their medical conditions and increasing the eventual cost to U.S. taxpayers." _Rebecca Adams inRoll Call_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Additional reading:** How CQ-Roll Call did the analysis. _Rebecca Adams inRoll Call_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **In 5 states, troubled exchanges see costly fixes.** "Five states that launched health exchanges under the Affordable Care Act expect to spend as much as $240 million to fix their sites or switch to the federal marketplace, a Wall Street Journal analysis shows....Funds may come from the states, remaining federal grants and new federal requests. The fresh spending is fueling a pitched debate in some states that could shape how residents buy their health insurance." _Stephanie Armour inThe Wall Street Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **The health-data revolution's awkward adolescence.** "The crowd in a hotel ballroom in Washington, D.C., was rocking on Monday, the 2,000 people shrieking with excitement over federal health-care databases. That could only happen at Health Datapalooza, the annual summit for data geeks, doctors, researchers and patients who want to use data to transform health care — or at least make a buck. Both of those goals are proving to demand a lot more than just coming up with a nifty API and getting the venture capitalists to buy in. Speakers at the Datapalooza gave plenty of examples of how people are trying to use data to make medical care safer, swifter and less expensive. But almost all of these projects are still works in progress." _Nancy Shute inNPR_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **ICYMI: Why 'transparency' isn't enough for health-care price data.** _Dan Keating inThe Washington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Health care companies have a cybersecurity problem.** "Major data breaches at Target (TGT) and Neiman Marcus last year put the spotlight on how poorly retailers guard sensitive information from cyber thieves. Yet health-care and pharmaceutical companies rate even worse than retailers in terms of security performance, according to a new analysis of Standard & Poor’s 500-stock index companies by BitSight Technologies." _Dune Lawrence inBloomberg Businessweek_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Other health care reads:**    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Will Obamacare cut the $84.9B we spend on the uninsured? _Sarah Kliff inVox_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Despite law, rape victims sometimes pay for medical services. _Michelle Andrews inKaiser Health News_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Animals interlude:** Video of some hedgehogs doing hedgehog things.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _ **5\. The legal, illegal NSA program?**_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Judge doubts phone-surveillance program is legal, but upholds it anyway.** "A federal judge in Idaho upheld the NSA's controversial phone surveillance program Tuesday. But Judge B. Lynn Winmill seemed to invite the Supreme Court to overturn his decision. He suggested that the program, which collects data on millions of U.S. phone calls, likely violates the Fourth Amendment's prohibition of unreasonable searches and seizures. Winmill upheld the program because he concluded that his hands were tied by current Supreme Court precedent." _Brendan Sasso inNational Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **New NSA chief: Don't worry, we're not _intentionally_ using face recognition on Americans.** "The new director of the National Security Agency on Tuesday acknowledged that the agency uses facial-recognition tools but said the intent is primarily to identify terrorists and help prevent attacks — adding that such technologies are not broadly directed against Americans. 'We do not do this on some unilateral basis against U.S. citizens,' said Adm. Michael S. Rogers." _Ellen Nakashima inThe Washington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Other tech reads:**    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Can we automate cybersecurity? _Kenneth Chang inThe New York Times_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday A bitter Silicon Valley primary. _Joshua Green inBloomberg Businessweek_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday How one TV show may have crashed the FCC's website. _Tony Romm inPolitico_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Dancing interlude:** Professional dancers copy a baby.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _ **Wonkblog roundup**_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Here’s why the head of the Cleveland Clinic could help Obama fix the VA. _Jason Millman_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Phil Mickelson’s inside information may have been perfectly legal. _Matt O'Brien_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Study finds strong evidence for discriminatory intent behind voter ID laws. _Christopher Ingraham_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday This computer programmer solved gerrymandering in his spare time. _Christopher Ingraham_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Coal companies have bigger problems than the Obama administration. _Max Ehrenfreund_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _ **Et Cetera**_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Fed officials growing wary of market complacency. _Jon Hilsenrath inThe Wall Street Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Senate confirms 3 commissioners to derivatives agency. _Silla Brush inBloomberg_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday As the number of unvaccinated Americans grows, measles and whooping cough make a comeback. _Sarah Mimms inNational Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Obama calls wave of children across U.S.-Mexican border an "urgent humanitarian crisis." _Katie Zezima and and Ed O’Keefe inThe Washington Post_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Shield-law supporters sense momentum after House vote. _Andrew Taylor in theAssociated Press_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Senators set new bid for overhaul of pricey food aid rules. _Patricia Zengerle inReuters_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday The highway funding crisis has lawmakers scrambling. _Billy House inNational Journal_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday **Got tips, additions, or comments?** E-mail us.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday _Wonkbook is produced with help from Michelle Williams and Ryan McCarthy_.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday

Charles Lane: A better way to help working class

Liberal firebrandPaul Krugman backs President Obama’s plan for a phased-in 25 percent increase in the minimum wage, to $9 per hour. But he is still economist enough to note that raising it to $20 “would create a lot of problems” — among them, presumably, pricing low-skilled workers out of the job market. There must be some level beyond which the minimum wage does more harm than good, and no one really denies it. Studies showing that higher minimum wages have little or no impact on employment generally refer to modest increments, or, as the White House’s own fact sheet puts it, “the kind of minimum wage increases we have seen in the United States.” So the issue before us is whether Obama can hit the sweet spot: all higher-income upside for the working poor, and no job-killing downside. I’m skeptical. Economists David Neumark of the University of California at Irvine and William Wascher of the Federal Reserve have spent their careers studying minimum wages. They found that, by and large, they reduce employment of young, low-skilled people. The last time the minimum wage was increased, in July 2009, Neumark estimated a loss of 300,000 jobs. Those who disagree start from the plausible premise that the labor market is not perfectly competitive — not many markets are — and that minimum wages correct for this. In 2010, economist Arindrajit Dube of the University of Massachusetts and two colleagues studied county-level data for restaurants in neighboring states with different minimum wages. There was a job-killing effect in states with higher minimum wages, but it disappeared when they controlled for broader regional employment trends. Ergo, higher minimums were not to blame. Neumark and his colleagues responded with a paper arguing that Dube & Co. failed to justify their choice of non-minimum-wage factors and that the minimum wage’s job-killing effects remain. I found Neumark persuasive, but I’m no statistician. Even if Dube is right, it’s worth asking why. The answer, broadly, is that employers must have found ways to offset a higher minimum wage: raise prices, cut profits, organize their businesses more efficiently — or, in a more positive sense, reap the productivity benefits of a happier, more stable workforce. John Schmitt of the left-leaning Center for Economic and Policy Research argues that employers probably make several small adjustments. Hard data are scarce, but the best evidence suggests that four offsets are most important, according to Schmitt: lower labor turnover, greater organizational efficiency, “wage compression” (lower wages higher up the payscale) and small price increases. Note that two of these — wage compression and price increases — hurt other workers and consumers. In short, Obama’s proposal works if it is, in fact, equivalent to those past increases in the minimum wage, which, according to certain studies, have not harmed employment. There are two risks: The studies are wrong; or, they’re right but Obama picked the wrong wage level. Both risks are borne by the least-skilled, poorest members of the labor force. Meanwhile, even if Obama’s proposal does raise some workers’ incomes without killing jobs, it would impose costs on other vulnerable members of society. Is there no more efficient, better-targeted alternative? Yes: increasing the earned-income tax credit, a cash supplement to wages that works like a negative income tax. Started during the Ford administration and expanded under Republican and Democratic presidents, the credit has grown into a $60 billion- plus program that pays more than $5,300 per year to a family with two children. It lifts millions out of poverty. It has offset much of the minimum wage’s inflation-adjusted stagnation in recent years: You might say that, in real terms, federal anti-poverty policy has been been gradually shifting from the minimum wage to the earned-income tax credit. Ditto the states, 24 of which have their own such credits. Krugman and others object that employers capture some of the credit, because it enables workers to work for less and firms to pay them accordingly. This strikes me as a feature, not a bug. Poverty reduction, income equality and maximal employment can be thought of as public goods. Therefore, it’s appropriate to purchase them through a transparent tax-code subsidy that falls on the public as a whole — rather than the minimum wage, which works like an invisible tax businesses pass along to workers and consumers. Here’s a thought: Don’t eliminate the minimum wage. Leave it at $7.25, in recognition of the fact that the labor market is competitive, but imperfectly so. Increase the earned-income tax credit. And then index both to inflation so we can lock in their value over time — and argue about something else. _Read more fromCharles Lane’s archive, follow him on Twitter or subscribe to his updates on Facebook._ ****

Pay our cashiers and cooks right, and stop waiting for Congress to raise minimum wage

Our Town is showing the rest of the country how to do it right. While federal Washington — the place I like to call This Town — refuses to do anything about the $7.25 minimum wage, local legislators in Maryland and D.C. are changing things on their own. Last week the Montgomery County and Prince George’s County councils both voted to raise the minimum wage to $11.50 by 2017. And on Tuesday, the D.C. Council will consider a widely supported bill to raise the minimum wage to $11.50 by 2016. (Northern Virginia’s cities and counties don’t have the power to raise the minimum wage on their own, or they might consider it, too.) Hello? Rest of America? Are you looking at us now? This isn’t a bloviating, maddening government shutdown orchestrated by outsiders. It’s not a hypocritical freshman congressman buying cocaine in a local bar. This is the Washington area showing federal Washington common sense in the face of a $7.25 minimum wage that hasn’t kept pace with the cost of living. The McDonald’s cashier who sold me the (still-scorching-hot) coffee Sunday night? She’s making less, adjusted for inflation, than she would have in 1963, when the minimum wage was $1.15 an hour. And the bonus, if the D.C. Council passes this minimum wage increase? It will be doing the right thing by raising the hourly wage for all workers, instead of its previous misguided effort to target Wal-Mart and other big-box stores. Two of those Wal-Marts — on H Street NE and Georgia Avenue NW — open this week, providing hundreds of new jobs to people desperate for them. Now we just need to make sure that they, and all of D.C.’s workers, are paid a livable wage. The federal minimum wage amounts to no more than $15,000 a year. Who, exactly, is supposed to live on that? No one can. And especially not in this part of the country, with its sky-high rents and housing prices. And here’s the crazy part. The federal Washington guys, when they slam the idea of raising the minimum wage, say that it would hurt businesses and increase unemployment. Not quite. Here’s what it does: It makes the government — and therefore you and I — subsidize businesses. We are the ones helping make those big, corporate CEOs so rich. We — by funding food-stamp programs and housing subsidies with our tax dollars that most of these minimum-wage employees end up needing in order to survive — are making it easy for corporations to pay wages so disgracefully low that employees ran food drives for one another on Thanksgiving. I go to the family homeless shelter at D.C. General quite a bit. And you may think it’s a place full of people who aren’t working. Not necessarily. Single parents with small children who can’t afford child care, they are usually out of work. But quite a few of the people with older children living in the shelter have jobs. They just don’t earn enough as cashiers, line cooks or day-care workers to pay for rent, food and transportation. And the minimum-wage worker’s life — which had been the foundation of the middle class 50 years ago when it was a living wage — is now a paycheck-to-paycheck mess held together with spiderwebs and luck. A recent Gallup Poll showed that most Americans — closer to real life than most of the clowns in federal Washington — support raising the minimum wage. Local governments are stepping up instead of waiting for Congress to act. The $11.50-an-hour wage passed by Montgomery and Prince George’s counties would be the highest in the country. California will have a $10 minimum wage by 2016, and New Jersey just voted for $8.25. Now it’s the District's turn. New restaurants, bars, hotels, day spas and condo buildings seem to be opening in our back yard every day. Meanwhile, we’ve made it impossible for the people who wash the dishes, pour the drinks, filet the fish, make the beds and clean the halls to survive anywhere near their jobs. I can’t wait to see Our Town make a bold step toward treating all of our workers with respect and dignity. It’s the right thing to do — now. To read previous columns, go to washingtonpost.com/dvorak.

How D.C.’s proposed $11.50 minimum wage would stack up

Washington, D.C., could be the next local government to take action in a nationwide push to raise the minimum wage after the D.C. Council approved a measure Tuesday that would give the city a higher minimum wage than in any of the 50 states.    *[WSU]: Wayne State University The measure, which would increase the minimum hourly pay rate from $8.25 to $11.50, will need a final vote before the council before it is sent on to Mayor Vincent C. Gray. Though all 13 members of the council supported the rate increase, it’s not clear that the mayor will sign off on such a significant wage hike. Gray has endorsed a smaller increase to $10 an hour. Nineteen states and the District have minimum wages higher than the federal government’s $7.25-an-hour rate, and a hike to $11.50 would put the District’s wage at the top, as shown below. But the city’s rate would not be the highest among  local governments. That ranking belongs to SeaTac, the suburban home to the Seattle-Tacoma International Airport where voters approved a $15 minimum wage in November. States and municipalities across the country have been raising their minimum wages in light of a stalled federal effort. And fast-food workers in 100 cities are planning a coordinated strike on Thursday to call for a rate hike. Lawmakers in four states — California, Connecticut, New York and Rhode Island — have passed bills that will raise the minimum wage in 2014, according to the bipartisan National Conference of State Legislatures. And voters in New Jersey voted to do the same in November.    *[WSU]: Wayne State University

Are we playing minimum-wage roulette?

The minimum wage — long relegated to the sidelines in the war against poverty and inequality — is back in the game. Los Angeles has just decreed that by 2020 the city’s minimum should rise in steps to $15 an hour, a 67 percent increase over California’s minimum of $9. Previously, San Francisco and Seattle had approved $15. Although the federal minimum of $7.25 isn’t likely to be raised soon, other localities are considering steep increases. The stampede toward higher local minimums seems based on the notion that it’s both good politics and good economics. You get to advocate for the poor. Countless millions of low-paid workers would see huge increases in take-home pay. That’s the good politics. As for economics, the conventional wisdom has been upended. It was once widely believed that businesses would react to higher minimums by cutting jobs. But scholarly research concludes — with some dissent — that recent increases exacted little employment penalty. In a 2014 book, “What Does the Minimum Wage Do?” economists Dale Belman of Michigan State University and Paul Wolfson of Dartmouth College reviewed more than 200 minimum-wage studies. Most increases “had little or no effect on employment or hours.” Higher minimums seem a painless choice. We can raise the low-income workers’ pay without killing their jobs. Well, maybe not. There are two caveats. The first involves the size of the proposed increases. As Belman and Wolfson note, most increases in the minimum since the 1960s have been “moderate.” They’ve been infrequent and in the 10 to 15 percent range, Wolfson said in an interview. The rapid increases now being advocated dwarf this, as Los Angeles shows. “Our suspicion is that large increases could touch off . . . disemployment,” wrote Belman and Wolfson in their study. Arguably, what has limited job losses is that, over time, the minimum wage has lost ground to both inflation and middle-class wages. Adjusted for inflation, the federal minimum of $7.25 is worth only 76 percent of the minimum in 1968, says the Economic Policy Institute (EPI), a left-leaning advocacy and research group. It’s precisely this erosion of value that liberal and labor groups seek to reverse. EPI urges a $12 federal minimum in 2020, which (it estimates) would be worth, after inflation, 111 percent of the minimum’s 1968 purchasing power. More workers would be covered by the minimum than now — and run a greater risk of job loss. In 2020, the $12 federal minimum would cover 23 percent of workers, up from 4 percent today, EPI says. Even some supporters of higher minimums fear that large increases will cost low-wage jobs. Kevin Drum is a well-known blogger for the leftist magazine Mother Jones. He lives in Southern California, and though supporting a higher minimum for Los Angeles, he suspects that $15 is too high. More realistic would have been $10 or $12. In a blog post, he speculated on possible job losses. Most restaurants would be fairly safe, because people “need to eat in Los Angeles.” But higher wages would “increase the incentive for fast-food places to try to automate.” More vulnerable would be low-cost apparel manufacturers, where jobs might be wiped out or moved to surrounding counties, where (it’s assumed) the minimum would remain lower. Hotels could “easily become less competitive for convention business and end up shedding jobs.” The second caveat is that minimum-wage studies may miss long-term effects. These studies typically examine whether companies eliminate jobs soon after an increase in a state or local minimum wage. But what if the full effects are delayed? What if a company that might have been started five or six years later is scratched — because the potential owners judge the labor costs too high? Or what if a business that survived the original increase slowly succumbs to higher costs and shutters five years later? Maybe we’ll find out. The increases create, Drum writes, “a great set of natural experiments to figure out what happens when you raise the minimum wage a lot.” For economists studying the minimum, it’s a bonanza. _Read more fromRobert Samuelson’s archive._ **Read more on this topic:** Katrina vanden Heuvel: The midterm minimum-wage mandate Dana Milbank: Raising the minimum wage without raising havoc Catherine Rampell: Seattle’s bold minimum-wage experiment Harold Meyerson: How to get a raise at McDonald’s

Study: D.C.’s big minimum-wage hike may not be a game-changer

Last year, after vetoing a controversial “living wage” bill while also promising to act on an increase to the city’s overall minimum wage, Mayor Vincent C. Gray commissioned an academic study of the subject, hoping to influence lawmakers as they moved forward with discussion of a wage increase.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday In the end, the study would have virtually no impact on the minimum-wage debate: The D.C. Council swiftly passed a bill that will raise the city’s minimum wage to $11.50 an hour by 2016, and despite earlier misgivings, Gray signed it.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday The study, however, went on, and the Gray administration’s contractor, the Urban Institute, issued its findings Tuesday. In sum, the study found, the minimum-wage hike will help low-income families — adding a few hundred to a couple of thousand dollars to the incomes of those earning less than twice the poverty line.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday But there are some reasons the effects on low-income D.C. residents might not be particularly profound. Half of current low-wage workers in the city don’t actually live in D.C., and higher earnings could lead to offsetting cuts in public benefits for some workers — although most workers will keep more that half of their higher earnings, researchers concluded. On the flip side, researchers found that a minimum-wage hike, even one as large as the District’s, is unlikely to have any meaningful impact on employment levels in the city. That analysis is rooted not only in national data, but in a review of employment statistics from 1993, when the District hiked its minimum wage before any suburban jurisdictions followed suit.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday The study found “little evidence that even a substantial increase in minimum wages in DC would result in lower employment,” with the caveat that “imprecise” estimates could mean “modest negative impacts, of perhaps half-a-percent drop in affected industry employment for each ten percent increase in the minimum wage.” The big winner from the higher minimum wage, the study shows, could be the District and federal governments. Even marginally higher incomes for low-income working residents will mean fewer residents claiming public benefits such as the federal and D.C. earned income tax credits, Temporary Assistance for Needy Families payments, food stamps and utility subsidies — allowing either a cut in expenditures or the expansion of benefits to new residents. The study does not tackle whether and how marginally shifting the burden of supporting low-income families from the public sector to the private sector might have any effect. Gray, in a statement, said he is “gratified that the study concluded raising the minimum wage will provide at least a modest benefit to low-income workers and have a negligible impact on employment.” He added that joblessness remains “intolerably high” and the city “must remain committed to growing our economy to create well-paying jobs for District residents and investing in affordable housing so all workers can afford to live in the city.”

Robert J. Samuelson: Minimum-wage mirage?

This minimum wage business is tricky. On its face, raising the wage seems an easy way to fight poverty. Just pay low-wage workers more. After all, some scholarly research finds that, within reasonable limits, there’s no job penalty. A higher minimum doesn’t reduce employment much, if at all. By and large, that’s the position of the Obama administration, congressional Democrats and liberal groups. Unfortunately, it may not be that simple. Democrats propose raising the present federal minimum of $7.25 an hour to $8.20 this year, $9.15 in 2015 and $10.10 in 2016. Assuming no job losses, almost 28 million workers would benefit by 2016, estimates the Economic Policy Institute (EPI), a liberal think tank. That’s about 17 million who now make less than the proposed minimums, plus 11 million slightly better-paid workers who would get increases to keep them above the minimum. Someone working 40 hours a week at the minimum would see annual wages go from $15,080 now to $21,008 in 2016. Today’s annual wage is about 20 percent below the federal poverty line for a family of three, while the 2016 wage would slightly be above the line for a family of three (though not of four), says EPI. Not all workers would receive big increases, because many work part-time (46 percent), don’t stay for a full year or already are above the minimum. Still, wage gains could be sizable. Economist John Schmitt of the Center for Economic and Policy Research, another left-leaning think tank, says that recent minimum-wage studies find that “modest increases” have “little or no employment effect.” Businesses turn to other ways of absorbing the added costs rather than reducing payrolls or workers’ hours, he says. Better-paid workers mean less turnover. This cuts firms’ recruitment and training costs; it also raises workers’ productivity, because they’re more familiar with their jobs. Finally, firms adopt “small price increases.” All this sounds plausible; it may also be incomplete. For starters, the minimum wage is a blunt instrument to aid the poor because it covers many workers from families that are well above the federal poverty line. By the administration’s figures, 53 percent of workers who would benefit from a higher minimum come from families with incomes above $35,000, including 22 percent with incomes exceeding $75,000. Next, economists still disagree on the job effect. In studies — and their review of other studies — economists David Neumark and J.M. Ian Salas of the University of California at Irvine and William Wascher of the Federal Reserve conclude that higher minimums do weaken low-wage employment. Under plausible assumptions, even a small effect (say, a 1 percent job loss for each 10 percent increase in the minimum) implies nearly a million fewer jobs over three years. But scholarly research, regardless of conclusions, may be beside the point. Businesses don’t consult studies to decide what to do. They respond based on their own economic outlook. They may not react to a higher minimum wage now as they did in the past. Two realities suggest this. First, the proposed increase is huge. By 2016, it’s almost 40 percent. Similar gains usually have occurred when high inflation advanced all wages rapidly. The minimum mainly kept pace. That’s not true today. Compared to average wages, the proposed hike in the minimum appears to be the largest since the 1960s. Second, businesses have been reluctant job creators. They curb hiring at the least pretext. They seem obsessed with cost control. The Great Recession and the 2008-09 financial crisis spawned so much fear that they changed, at least temporarily, behavior. Firms are more cautious. Would employers take the minimum’s steep costs in stride — or react by cutting hiring and automating more low-paid jobs (example: supermarket checkouts)? That’s the crucial question. Which matters more for low-income workers: added jobs or higher incomes? There’s a powerful symbolism to raising the minimum, but the notion that it can be boosted sharply without any job penalty may be a mirage. _Read more fromRobert Samuelson’s archive._ **Read more about this issue:** Robert J. Samuelson: The minimum-wage muddle George F. Will: Raise the minimum wage? It’s iffy. Katrina vanden Heuvel: Time to fight for a minimum-wage increase Betsey Stevenson: Five myths about the minimum wage Eugene Robinson: Democrats can win on raising the minimum wage

The minimum wage movement gets its biggest victory yet

The city council in Los Angeles has passed a bill to increase the minimum wage in the nation’s second-largest city to $15 an hour, in stages between now and 2020. While similar increases were recently passed in San Francisco and Seattle, L.A.’s size alone — it has a population of almost 4 million, four and a half times as large as San Francisco and almost six times as large as Seattle — makes this the most significant development in the growing movement for an increase in the minimum wage.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico What’s remarkable is how dynamic this issue is, as the range of options we debate keeps changing and politicians try to catch up to what grassroots activists are pushing for. Not long ago, when fast-food and other low-wage workers began demanding a $15 minimum wage, it seemed like an unrealistic request, at a time when people were talking about raising the federal minimum of $7.25 to something like eight or nine dollars an hour. But the ground keeps shifting. We see it happening again and again: Politicians endorse a modest increase. Activists pressure them to go further. The politicians realize that the public is in favor of a more significant increase and that the debate has changed. And they follow along. For instance, in his 2013 State of the Union address, President Obama proposed a $9 minimum wage; in his 2014 SOTU he endorsed a bill in Congress to raise it to $10.10; and now his administration has come on board with a new bill that would it to $12. Something similar happened in Los Angeles: Mayor Eric Garcetti had proposed raising the minimum to $13.25 by 2017, but at the urging of activists the city council went all the way to $15, and now Garcetti says he’ll sign the bill they just passed.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico My guess is that just as they have in the past, Republicans in Congress will resist increasing the minimum wage for as long as they can until the political pressure grows too great, then give in. (Many of them will vote for an increase when the bill comes up.) But in the meantime, the issue is spreading from state to state and city to city. At the end of last year, Chicago’s city council voted to raise its minimum wage to $13 an hour by 2019. Mayor Bill de Blasio of New York advocates an increase to $13 an hour next year, with indexing to inflation. That’s a key issue; indexing to inflation is part of the L.A. measure and increasingly a core component of bills elsewhere. That locks in steady increases in the minimum (not to mention obviating the need for future minimum wage fights, something Republicans should be happy about).    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Conservatives and the business community warn that increasing the minimum wage at all will cost jobs, and they’re particularly opposed to significant increases like the one L.A. just passed. So do they have a point? This question has been exhaustively studied by economists, and the consensus when it comes to modest increases seems to be that things even out: there are some job losses as low-wage employers decide not to make new hires or cut back, but these are offset by the jobs created when low-wage workers have more money to spend. What will happen when you raise the minimum wage by a significant amount? Even the advocates of a higher minimum wage in admit that some job losses are a possibility. But they point out that the net number of jobs in the short term is not the only measure of whether an increase has been a success. If you give hundreds of thousands of people a raise, you’ve alleviated a huge amount of insecurity and created opportunities for them and their children. A local economy with slightly fewer jobs in the short run but significantly higher wages may be something most cities would be happy to have. It will be some time before we know how the significant minimum wage increases in places like San Francisco, Seattle, Chicago, and Los Angeles have affected their local economies. But they aren’t going to be the last places to increase their minimums. The momentum is only increasing.

With victory in L.A., the $15 minimum wage fight goes national

On Labor Day last year, Los Angeles Mayor Eric Garcetti went to a celebration in a park on the south end of the city and announced what he called “the largest anti-poverty program in the city’s history”: boosting the minimum wage to $13.25 per hour by 2017.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico It was an ambitious move for a town that hadn’t recovered quite as strongly from the recession as two of its northern neighbors — Seattle and San Francisco. Legislators in those two cities had recently voted to go all the way to $15 an hour. But even L.A.'s more modest proposal still drew howls of resistance from corporate leaders, who predicted businesses would lay people off and flee the city in droves. For labor leaders, it was just the opening bid. The next month, they pushed a faction of the City Council to counteroffer with a proposal that would bring the minimum all the way to $15.25 by 2019. After a few more months of wrangling over economic impact studies and provisions like paid leave, that number finally settled at an even $15 — the new gold standard for wage campaigns in big liberal cities. On Wednesday, the Council passed a staged increase that would get the minimum up to $15 by 2020, by a vote of 14 to 1.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico _[Los Angeles becomes the biggest city yet to approve a $15 minimum wage]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “How L.A. got to that number is rooted in the activity generating from the East Coast, where New York fast-food workers raised this as a demand, starting their first strikes two years ago,” says Laphonza Butler, president of the Service Employees International Union’s home care workers unit in Los Angeles. “It has just become the vernacular of the workers movement. And when Mayor Garcetti introduced his proposal at $13.25, we all knew that wasn’t enough." For that reason, $15 became a number workers citywide could rally around, channeling energy from a campaign coordinated by labor unions and community activists around the country. And now that L.A., the second biggest city in the country, has done it, supporters are eager to replicate their organizing model in places like New York, Chicago and Washington, D.C., as well. **An emerging model**    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Despite the apparent ease with which it appeared to cruise to victory, the new $15 minimum wage wasn’t a foregone conclusion. Organizers had to pull a few key elements together in order to push it through. The first coincided with the killings of Michael Brown in Ferguson, Eric Garner in New York, Tamir Rice in Cleveland and Freddie Gray in Baltimore. The ensuing months of protest, under the slogan “Black Lives Matter,” fed naturally into a campaign that consciously cast itself in the terms of social, racial and economic justice. "I think the unfortunate awful things that we’ve seen around the country certainly put into the forefront the struggles and the reality of poverty,” says Rusty Hicks, the secretary-treasurer of the Los Angeles AFL-CIO, who co- chaired the Raise the Wage campaign with Laphonza Butler. “The same places where you see low wages are the places where you see failing schools, college out of reach, or not even imaginable.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico To make that connection explicit and visible, the campaign recruited civil rights and prison reform movement leaders as co-chairs. Labor leaders had learned their lesson from past campaigns that had failed to do that, which allowed the focus to fall on unions rather than on a broader coalition. So they brought in religious groups and immigration activists, compiling a roster of more than 260 organizations in support. “The moment it became about business vs. labor, Angelenos would lose,” Butler explains. “We worked to make sure that this was about regular people. it wasn’t about organizations, or profit margins, or anything but the 750,000 working Angelenos who every day played by the rules and feel that a decent standard of living was out of reach." _[Campaign to begin for a $15 minimum wage in D.C.]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico All those forces pulling in the same direction were able to pack every hearing with sign-waving, low-wage workers and to mount protests that filled the streets. But it wasn’t just power in numbers. The coalition also divided and conquered its opposition, by targeting the hotel industry for a wage hike first.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “A place like L.A. is known for Hollywood, it’s known for tourism, it’s known for the hospitality industry, which has had massive investments from the city and the county,” Hicks recalls. “So it was an industry that was doing quite well. It had some of the lowest-paid workers in the city. Those workers stepped forward, and the city responded, by making sure that the workers were able to share in the prosperity.” The city passed a $15.37 minimum wage for large hotels last November. Once lawmakers had done that, hotel owners had no reason to resist a higher wage across the city. There were also some businesses that already favored the $15 wage floor, which made the campaign an easier lift.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Success in L.A. has emboldened activists to pursue minimum wage campaigns across the country. Thus far, very few of them have failed. “You can’t put the toothpaste back in the tube, and that’s what L.A. represents,” say Dan Cantor, national director of the Working Families party. “We want a minimum wage that’s actually a living wage. And if you can make that visible, you have enormous support for it. Even people who won’t personally be affected by it, you instantly understand, to earn $30,000 a year, that’s not exactly a king’s ransom, and everybody should be able to have a shot at that.” Opponents in the business community are not ready to roll over quite so easily. Ruben Gonzalez, senior vice president at the Los Angeles Chamber of Commerce, says Garcetti’s proposal caught the business community off guard, and appeals to at least pass it in concert with a package of more business friendly, growth-oriented measures went unheeded. The chamber even challenged the integrity of the mayor’s economic impact study, which slowed down the eventual vote, but didn’t change the result.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico _[What if Walmart raised its minimum wage to $70,000 a year?]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The best chance other business groups have to avert a similar rout, he says, is to mount an aggressive campaign in response. “As soon as possible, start a full community outreach, media outreach and advocacy campaign. Inject into the narrative about wage increases the negative impacts on employment,” said Gonzalez. “The progressives are very good at putting a human face on the folks who want a wage increase. I think we need to be better about putting a human face on the employees and small business owners who are going to be the victims.” The problem for business, however, is that there aren’t real-life examples of cities that have suffered after raising a minimum wage that high — nobody’s actually had to deal with a $15 minimum wage yet. Dire projections of job losses and layoffs based on economic models just aren’t as effective. **Alternate routes**    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico As much as activists might learn from the Los Angeles experience, not every campaign will unfold the same way. New York State has started by convening a “wage board,” which has the power to unilaterally require higher wages in the fast-food industry. Liberal groups in Washington have launched a campaign to put a $15 wage to a popular vote in 2016, rather than going through the D.C. Council.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Supporters in other cities and states know that a $15 minimum wage just won’t fly. Some have much lower wage levels already, like Kansas City, where activists are pushing a new $13 minimum wage. Some boosted their minimums recently and don’t have an appetite for more. Still, activists are exploring other options. _[The best indication of what a federal $12 minimum wage could mean for poor places comes from Puerto Rico]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Take Connecticut, which recently boosted its minimum to $10.10 an hour. There, advocates are asking legislators to impose a $1 surcharge on employers for every hour worked by an employee who makes less than $15, which is supposed to make up for the cost in public assistance required by low-wage workers who can’t pay for rent, food and health care on their own. They’re calling it the “McWalmart fee,” referring to the large employers that would have to pay the most as a result.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico But even for those lesser efforts, $15-an-hour campaigns around the country create leverage. "I think the national movement around $15 an hour is creating a new floor,” says Erica Smiley, campaigns director for the labor-backed group Jobs with Justice. “And while there are some cities where going from $7.25 to $15 an hour might be an incredible jump,  I think it has definitely created a new standard for employees to negotiate around.” In response, some conservative states — like Missouri — have already passed laws preempting cities and counties from raising their minimum wages above the state level on their own. But such measures can’t prevent private companies from doing so for their own workforces. That’s what’s happened recently with companies like Aetna and Facebook. As $15 wage ordinances spread across the country and raised the market price of labor, these firms moved forward on their own, spreading the campaign even further.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico

L.A. is considering one of the highest minimum wages — $15.37 for some

President Obama can call on Congress to raise the federal minimum wage to $10.10 all he wants, but unless House Republican leaders can calm their members, it, along with every other policy priority, appears to be dead in the water.    *[WSU]: Wayne State University But all hope for proponents of raising the minimum wage isn’t lost. As of Monday, more than half the nation — 28 states — were considering raising state minimum wages. In California, home to about an eighth of the U.S. population, the $8 minimum wage will increase by a dollar on July 1, and again, to $10, at the start of 2016. And in Los Angeles — most populous city in the most populous state — the city council this week began exploring a $15.37 minimum wage for some workers, just above the nationally followed $15 minimum wage passed in November for workers at Seattle’s airport. City Council members Nury Martinez, Curren D. Price Jr. and Mike Bonin introduced a proposal on Tuesday that would make the minimum hourly wage for all employees at large hotels in L.A. $15.37, as was done for airport employees a few years ago. The council will first have to study the potential economic impact such an increase would have, but, if approved, it would be among the highest minimum wages in the nation. We had a chance to talk to Bonin this week about the measure, who it affects, and why they proposed it. Here’s a condensed, slightly edited version of that conversation:    *[WSU]: Wayne State University **What’s your constituency like?**    *[WSU]: Wayne State University There are 15 members of the Los Angeles City Council; we each have about 270,000 constituents. I represent the west side of the city which is the coastal communities — they tend to be more affluent, and my district also includes Los Angeles International Airport, the southern California headquarters of Google, YouTube and some of the Silicon Beach area of Los Angeles. **Why did you guys decide to bring up this minimum wage proposal now?**    *[WSU]: Wayne State University Well, the one thing I should say right away is I’m a co-sponsor of this with two other council members — Nury Martinez and Curren D. Price Jr. — both of whom represent vastly different parts of the city than I do. Nury represents a largely Latino district in the San Fernando Valley, and Curren represents a Latino and African-American district in south L.A., one of the poorer parts of the city. So we really represent, between the three of us, the face of the diversity of Los Angeles. All three of us just recently took office over the past few months, and we decided to do this because of the yawning gap between incomes here in Los Angeles. We have a barbell economy with the large and growing upper-income segment and the large and growing pocket of people who live and work below the poverty line. That’s bad for us as a society, it’s bad for us as a city, but it’s also bad for us as an economy. Our middle class has been disappearing, and, in order to grow our economy here, we need to grow our middle class, and we need to do it in two different ways. One is by attracting a lot of good middle-class jobs, which we’re getting from Google and YouTube and all the tech start-ups that are coming here. But also by raising folks out of the ranks of the working poor and into the middle class giving them more disposable income, more discretionary income. The data we’re seeing is pretty scary. In the hospitality industry here in Los Angeles, 43 percent of those who work in that industry are making incomes below the federal poverty line. And the cost of living in Los Angeles is considerably higher than in other places, so when you’re below the federal poverty line in Los Angeles, you’re way below what it is to make a living wage. **Did you guys consider proposing something broader?**    *[WSU]: Wayne State University The consensus feeling among the elected officials in Los Angeles was to start small and go bigger. I personally haven’t been shy about saying I’d like to see a citywide minimum wage increase, and that’s the direction I’d eventually like to go. **How did you come to $15.37?**    *[WSU]: Wayne State University There are a couple different living wages that have been historically established throughout Los Angeles. The most recent is for service employees at Los Angeles International Airport, that’s $15.37. So we pegged it to that most recent figure. It’s also the figure that voters approved in the city of Long Beach, which is one of the other biggest cities in California, very close to us. It has a particular resonance for me because, as I often note, when Dr. Martin Luther King, Jr., led the March on Washington in 1968 he called for a minimum wage of $2 an hour. Adjusted to inflation, that’s $15 and some cents, so we’re in the ballpark of just adjusting for inflation, really. **Where does the proposal stand?**    *[WSU]: Wayne State University We’re actually required by law and sort of dictated by logic to do a study of the impacts first. Back in 2007, the city passed a living wage for hotels near Los Angeles International Airport and part of that ordinance said that if you were going to expand the wage further to other hotels or to a different industry you need to do an economic impact study first. We will do that economic impact study, and we’re going to start discussing it in committee next Tuesday. Once that’s complete, assuming the findings come back with the same information we’ve been getting about the potential for the existing harm to the current folks who are working below the poverty line and the potential benefits to those people and to the Los Angeles economy as a whole from raising the wage, we will vote on the ordinance in council. **Have you heard from any other members who have voiced support for the measure yet?**    *[WSU]: Wayne State University Yeah, when we put the motion in, we had three co-sponsors, and we had two seconds on it, so that’s a full third of the body. We know that we also have some other supporters, so I feel good about the level of support we have at the council. We also had, as we kicked this off, support from not just hotel workers, which is obvious, but small business owners who are interested in seeing their potential clients and customers in Los Angeles have more discretionary income. Also faith leaders and some of a broad section and coalition from the community. Ultimately, we expect this will affect 12,000. It’s also consistent with a tradition in Los Angeles of being on the forefront of the living-wage movement. Back in the mid-90s, the city council at that time was I think the first in the country, certainly one of the first, to pass a living wage ordinance for people who were doing business with or had contracts with the city and that sort of set a precedent. The city then expanded it to hotels near the airport and then to the airport itself, so we’re continuing sort of a progressive tradition of using fair wages to fuel the economy here in Los Angeles.    *[WSU]: Wayne State University

Expanding paid sick days in the District

Expansion of the District’s law on paid sick days to include bar and restaurant workers [“Plan would expand paid sick leave,” Metro, Sept. 17] is badly needed. It is unfortunate that opponents are trotting out the same baseless, discredited arguments they used five years ago to try to block progress. The District would not be the first jurisdiction to cover restaurant workers. Since its sick-leave law took effect, several cities and one state have adopted laws about paid sick days — and the sky-is-falling predictions about jobs and the economy have not come true. In fact, just-released data on Seattle’s paid-sick-leave law, which covers restaurant workers, show that the number of businesses and food service jobs has increased since it took effect. And Seattle’s unemployment rate is lower than Washington state’s and the country’s. Paid sick days benefit the public health, yet the District law excludes the very workers whose jobs require frequent public interaction. For the sake of our city, its residents, workers, businesses and economy, let’s strengthen and expand the law. ****Debra L. Ness** , Washington** The writer is president of the National Partnership for Women & Families.

60 percent of Americans live with a minimum wage higher than the federal one

When Los Angeles Mayor Eric Garcetti signed a law Tuesday forcing the city’s employers to begin paying a $15-an-hour minimum wage by 2020, the move wasn't exactly applauded by the business community. But more and more, the business community is losing this battle. Not at the federal level, mind you, but at the state and local level. In fact, so many cities and states have boosted their minimum legal wage above federal government’s $7.25 an hour that at least 60 percent of the country’s workforce now lives in a place in which the minimum wage sits well above that national requirement, according to David Cooper, an economic analyst with the left-leaning Economic Policy Institute.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico And in 2014 alone, voters in four red states – Arkansas, Nebraska, Alaska and South Dakota – passed ballot measures requiring employers to pay workers more than the federal minimum wage. And some of the measures didn’t just boost wages, they also included features that pegged the state’s minimum wage to increases in the cost of living too. Critics of minimum wage increases have long argued that the measures are unnecessary because many minimum wage earners are teens working after-school jobs for spending money or that other workers are almost certain to ascend the wage scale over time. And some critics have repeatedly warned that minimum wage increases can produce dire problems for the very workers they aim to help. When the cost of employing a worker rises, these critics argue, employers are less likely to create new jobs and more apt to cut existing ones.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico For a long time, that was the official economic theory that guided much of the nation’s thinking on the minimum wage. Now, it seems, the standard arguments for keeping the minimum wage, well, minimal simply don’t have the same pull that they once did. The U.S. Labor Department maintains a myth-busting page on its Web site full of information about the minimum wage -- including what's known about what happens when they rise and when they don't. And a team of researchers digging into this question for a division of the Labor Department found that minimum wage increases almost never cause job losses but do dent new job creation. Economists outside the government appear to remain divided.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico What is certain is that quite a few adult workers earn the federal minimum wage or something just above it. In fact, when Congress was contemplating a bill in 2014 that would have boosted the federal minimum wage to $10.10 an hour, the Economic Policy Institute gathered federal data and found that nearly 90 percent were at least 20 years old. More than one-third of these workers were at least 40. Just over half, 54 percent, worked full-time, and more than a quarter had children. In addition, a disproportionate share of those earning less than $10.10 an hour are women or racial and ethnic minorities.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Of course, none of those figures were enough to convince Congress last year. Nor has updated data lent much momentum to a current bill that calls for the federal wage floor to move up to $12.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico There is some momentum on the campaign trail. Democratic presidential candidate Hillary Clinton has expressed support for raising the minimum wage but has not specified a dollar figure. And both Sen. Bernie Sanders (I-Vt.) and former Maryland governor Martin O’Malley, who are vying for the 2016 Democratic Party presidential nomination, have expressed public support for boosting the federal minimum wage to $15 an hour -- a number that was once reserved for only the truest of true believers when it comes to raising the minimum wage. Any federal increase -- even $10.10 -- would have an effect across most of the country. Today, 29 states and the District of Columbia require hourly wages above the federal floor. But none top Washington state's $9.47 an hour. So that's still a long way from LA's $15.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico _Seehere to find the minimum wage in a particular state._    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico About 73 percent of households which receive some form of public assistance now include at least one working member, according to a University of California Berkeley Labor Center analysis.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico This, of course, makes the public cost of high wages hard to deny. Perhaps that's why a January 2014 Pew Research Center poll found partisan disagreement about what should be done to address income inequality in the United States. But a slight majority of Republicans agree with overwhelming shares of independents and Democrats that the federal minimum wage should be reset to $10.10 an hour.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Increasingly, though, advocates have set their sights much higher than $10.10. Since 2014, four cities – Seattle, San Francisco, Chicago and now Los Angeles -- have gone further than the states that surround them, phasing in laws that require employers to pay anywhere from $13 to $16 an hour. And ballot initiatives have been proposed or votes scheduled in at least four cities and two states. What’s more, in June, Kentucky Gov. Steve Beshear, a Democrat at the helm in a red state, boosted the minimum wage for about 800 state employees from the federal minimum of $7.25 per hour to $10.10 via an executive order. The change will go into effect next month. When it does, lawmakers in that state’s capital might have also approved a measure boosting the minimum wage for every Kentucky worker to $10.10 an hour.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico With congressional action at a standstill, the question now is not why Los Angeles boosted its minimum wage, but which city or state may move in that direction next. And from there, you can bet minimum wage hike activists and opponents will be mining the economic effects in these cities for the next big national debate.

Los Angeles becomes the biggest city yet to approve a $15 minimum wage

The Los Angeles City Council voted overwhelmingly Tuesday to raise the city's minimum wage to $15 an hour by 2020, up from the current $9 an hour, making the city the largest in the country to set a target that has gone from almost absurdly ambitious to mainstream in the span of a few years. The bill, which will need to clear a final vote, passed by a margin of 14-1. It comes in the wake of similar measures in Seattle and San Francisco, and as cities including New York and Washington D.C. consider raising their minimum wages to $15 as well. All of the $15 minimum wages enacted thus far will be phased in over time -- Los Angeles's would start by stepping up to $10.50 by July 1 of 2016, and give businesses and nonprofits with fewer than 25 employees an extra year to comply. The Council's vote is another victory for a coalition composed of labor unions, immigrant groups, community activists, and newly elected council members who seven months ago pushed through a $15.37 minimum wage for workers at large hotels. That move put those hotels in the position of arguing that the higher minimum should apply to all of the city's 3.88 million people.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Various economists have studied the effects of the higher minimum wage, disagreeing on what the impact will be. One analysis commissioned by mayor Eric Garcetti of an earlier, similar proposal -- to boost the minimum to $15.25 by 2019 -- found that 542,000 workers would receive a raise, taking into account the ripple effects on those who already make more than that amount. The average wage would increase by 20.4 percent, said researchers from the University of California-Berkeley, with the largest increases in the food service, healthcare, retail, administrative and waste management services. The study anticipated minimal job losses, with a decrease of only 0.2 percent of the employment base by 2019 (which would likely be cancelled out by 2.5 percent annual job growth in the city). Overall verdict: The higher wage would have more positive than negative effects.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Then there's the Los Angeles County Federation of Labor, which funded a study in 2013 that looked at the impact of a $15 minimum. That analysis sets the proposal against the backdrop of the city's mounting income inequality, and argues that low income workers would quickly reinvest all of the $7.6 billion extra in wages they could receive with a higher wage floor. It would also have a positive impact on public finances, adding $152 million per year to the city's coffers, the study found.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The story is a little different when you ask the Chamber of Commerce, which ordered up an analysis of a plan to raise the minimum to $13.25 an hour. The business group highlighted Los Angeles City's position within a larger metropolitan area, which allows the higher wage to benefit people who commute into the city to work while paying taxes elsewhere. Businesses might choose to locate in the suburbs to avoid pricier labor. All in all, they forecasted that even that smaller increase would kill between 70,000 and 140,000 jobs over the next five years, with one-third of the losses impacting workers under the age of 25.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Those are the fears driving Mitchell Englander, the one councilmember to vote against the new minimum wage. He's a former police officer, and is running for L.A. County supervisor in 2016.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “There is no question in my mind that better pay for workers would provide myriad benefits,” Englander said, according to CBS Los Angeles. “I am not, however, convinced that a unilateral minimum wage increase serves the intended purpose and may, worse, have unintended consequences such as job loss, reduction in working hours, or make it impossible for entire industries to do business in the City of Los Angeles.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Employers did negotiate one major concession, avoiding a proposed requirement that they offer 12 days of paid leave as well -- although that idea might come back before the end of the year. At the end of the day, while there are piles of evidence on how minimum wage increases impact wages and employment in cities, nobody quite knows what happens when a city goes all the way up to $15, since that's still far higher than what anybody else has tried. But by the time Los Angeles gets there, it probably won't be alone.

Seattle mayor says he struck a deal for a $15 minimum wage

Seattle Mayor Ed Murray announced plans Thursday to increase the minimum wage to $15 there, which would place it among of the highest in the nation. The plan would give businesses with fewer than 500 employees seven years to comply and larger businesses three years. Further increases would be tied to inflation. “Throughout this process, I’ve had two goals: to get Seattle’s low-wage workers to $15-per-hour while also supporting our employers, and to avoid a costly battle at the ballot box between competing initiatives,” Murray said in a statement. “We have a deal that I believe accomplishes both goals.” The plan has the support of 21 of the 24 members of an income inequality panel convened in December and whose members include employer, labor and nonprofit representatives. As recently as last week, talks to raise the wage appeared to be stuck.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday “This has been a long process of give-and-take leading to an agreement that will help to narrow the income gap facing our middle class,” said Howard Wright, co-chair of the IIAC and CEO of the Seattle Hospitality Group in a statement. By the time the $15 minimum wage kicks in for smaller employers in seven years, a minimum wage worker in Seattle will be making at least $4 more per hour — and $6,240 more per year — than similar workers elsewhere in the state, the mayor said in a statement.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday Washington is home to the nation’s highest state minimum wage, at $9.32 an hour. As of April 8, 38 states had considered minimum wage bills in 2014, with 34 of them considering increases, according to the National Conference of State Legislatures. Connecticut, Delaware, Maryland, Minnesota and West Virginia have passed increases. Hawaii is expected to join that list after legislators approved a future hike Tuesday to $10.10, the level President Obama has pushed for nationwide. Workers in several states will see minimum wages of at least $10 in several states within a few years.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday States and cities have led the charge as federal legislation has languished. San Francisco started the year with a $10.74 minimum wage, while Sante Fe’s hit $10.66 on March 1. A $15 minimum wage went into effect for some workers on Jan. 1 in SeaTac, the small city that is home to Seattle–Tacoma International Airport.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday The Seattle proposal must be passed by the City Council and will be heard by a council wage and inequality committee next Monday.

Five reasons why Obama is right to push for a higher minimum wage

In President Obama’s State of the Union on Tuesday, perhaps the most surprising inclusion was his call to raise the minimum wage to $9 an hour by 2015 and index it to inflation. It wasn’t an entirely new proposal from the president — in 2008, he called for raising it to $9.50 by 2011 — but this was the first time in years that Obama has pushed for a minimum wage increase. Here are five reasons why he’s right to push this issue once again.    *[WSU]: Wayne State University **• It will help the economy.** Any time that Democrats suggest raising the minimum wage, Republicans and Big Business howl that it will hurt job creation. To be fair, this seems intuitive, and indeed was conventional wisdom in economic circles for many years, but empirical studies have found over and over again that this is not the case. Economist Jared Bernstein writes that this is “potentially because they increase employers’ ability to attract, retain, and motivate workers. And they benefit workers by increasing the reward to work.” In fact, recent studies suggest that raising the minimum wage right now may have a small positive effect on the economy, with low-income workers spending at least some of their new wages immediately, boosting GDP growth and lowering unemployment slightly.    *[WSU]: Wayne State University ** **•** It reduces poverty and inequality. ******Recent studies continue to suggest that the decline in the minimum wage over the last thirty years has contributed noticeably to the rise in economic inequality, a rise that continues apace in post-recession America. A higher minimum wage would help finally reverse this ever-more-dangerous trend. And while Obama’s proposed increase still leaves many Americans (especially those with families) in poverty, it would still push millions above the poverty line. Overall, it would help 21 million workers, according to the Economic Policy Institute’s Lawrence Mishel, and increase wages by $22 billion. Increasing the minimum wage, of course, is but one tool in fighting inequality and poverty, but it remains an effective one.    *[WSU]: Wayne State University ** **•** It reduces in the “wage gap” for women and minorities. **Despite making up slightly less than half the workforce, women hold around two-thirds of all minimum wage jobs. As the Roosevelt Institute’s Bryce Covert has written, this is a “significant factor in that bothersome gender wage gap.” Not surprisingly, then, women would disproportionately benefit from a minimum wage increase, shrinking the wage gap at a time when House Republicans refuse to pass other measures, such as the Paycheck Fairness Act, that would help. Similarly, Hispanics and African-Americans would also disproportionately benefit.    *[WSU]: Wayne State University ** **•** Indexing the minimum wage is, well, common sense. **From 1998 to 2006, the real value of the minimum wage declined 19 percent. This wasn’t because of any policy, but because the minimum wage is not indexed to inflation, and so automatically declined in value when it wasn’t raised by Congress. Indexing would ensure that workers do not get screwed over by congressional inaction. Ideally, the minimum wage in fact would be indexed to wages in general or productivity, but pegging to inflation is a good first step.    *[WSU]: Wayne State University ** **•** It’s consistent with American values. **At the 1912 Progressive Party, Theodore Roosevelt told the attendees:    *[WSU]: Wayne State University Roosevelt understood that a living wage (which, it must be noted, would be higher in today’s America than what the president is calling for) carries out the commitment the Founders made in the Constitution to “promote the general welfare.” It is a commitment that goes all the way back to the country’s beginnings, to the Puritans and John Winthrop, who in his famous “City on a Hill” sermon (yes, the same one Ronald Reagan was so fond of), said “we must be knit together, in this work, as one man…We must delight in each other; make other’s conditions our own; rejoice together, mourn together, labour and suffer together, always having before our eyes our commission and community in the work, as members of the same body.” Obama’s push for a $9 minimum wage, while it doesn’t go far enough, is still an important step toward restoring that truly American community and its general welfare.    *[WSU]: Wayne State University

Raising the minimum wage would help and hurt women

Last year, 2.3 million women earned so little that if a typical woman worked 40 hours a week at minimum wage for the entire year, she’d earn just over $15,000. While a teenager living at home might find that much money is more than enough to pay for popcorn at the movies, a woman with a couple of kids would find herself struggling to put a wholesome meal on the table with just $15,000 to spend. That’s the basic argument that many fast-food workers made as they went on strike on August 29 against fast-food restaurants, such as McDonald’s, Burger King, Wendy’s and Pizza Hut, calling for a $15-an-hour minimum wage for millions of burger flippers and pizza twirlers.    *[WSU]: Wayne State University  As the group “Low Pay is Not OK” said in an open letter to fast food chains, “Last year your combined profits were $7.35 billion. Yet you still paid most of your workers less than $11,200 a year – poverty wages. It’s shameful. And outrageous.”    *[WSU]: Wayne State University Others argue that it’s not necessary to raise the minimum wage because it’s largely paid to teenage boys earning their first paychecks.  However, the data don’t support — and they haven’t for a long time — the number one myth about the minimum wage. The typical minimum wage worker isn’t a teenager and isn’t male. She’s an adult woman. That’s right. Based on data from the Department of Labor, among the 2.7 million hourly workers above age 20 who made the minimum wage or less last year, about 1.8 million, or two-thirds, are women.    *[WSU]: Wayne State University One reason for this, as The National Women’s Law Center found, is because women tend to be employed in jobs that don’t pay very well — more than three- quarters of the workers in the ten lowest-paying jobs are women. These women toil away at taking care of others’ children, cleaning houses and hotel rooms, ringing up sales at the cash register, and serving burgers and fries.    *[WSU]: Wayne State University Making matters worse, many of these working women have kids but no husband at home. The $15,000 she earns at minimum wage places her well below the poverty level of $22,891 for a single-parent family with three kids. Poverty, unfortunately, describes nearly one out of three families headed by a mother with no husband present, according to the U.S. Census Bureau.    *[WSU]: Wayne State University It’s clear that if she earned more per hour, she could begin to climb out of poverty. The census bureau estimates that female-headed families with no husband present need to earn an additional $10,317 to rise out of poverty. Assuming that she works full time (2,000 hours a year), this mother would need to make roughly $5 more per hour to reach this goal. Can U.S. companies afford to raise wages by $5 an hour? It depends on who you ask. The National Federation of Independent Business, which represents the voice of small business, says that any increase in the cost of doing business (wages, of course, are a cost of doing business), would cause entrepreneurs to find ways to hire fewer workers. William Dunkelberg, chief economist for the NFIB, says that “The minimum wage is a major anti-jobs policy,” arguing that the “Law of Demand always works: the higher the price of anything, the less that will be taken, and this includes labor.”    *[WSU]: Wayne State University He’s right, to a certain extent. Firms maximize profits when they minimize costs. Yet, this analysis leaves out one important issue: The costs that the private sector’s actions impose on society. The states are well aware of the costs that low wages impose on them. For example, in 2008, an Ohio policy group reported that Wal-Mart, McDonald’s, Yum! Brands, and Wendy’s were the top employers with the largest number of employees using Medicaid, food stamps and Ohio’s cash assistance programs. Nearly 28,000 employees at these four companies applied for food stamps in 2008. By covering these costs through various programs that help low-income people, the government picks up where the private sector leaves off. For example, a single mother making $15,000 a year is entitled to various means-tested benefits that are targeted toward people with low earnings — the earned income tax credit, the child care credit, Medicaid, food stamps — that help her provide food, shelter and clothing for her family. Raising the minimum wage would start to solve this poverty problem. However, there are two things to take into consideration. First, the official poverty estimates are based solely on money income before taxes and don’t include the value of noncash benefits, such as those provided by the Supplemental Nutrition Assistance Program, Medicare, Medicaid, public housing, and employer-provided fringe benefits. These are the kinds of programs the government provides to those who don’t have the means to purchase them on their own. Second, they also don’t take into account the tax benefits that low-income workers receive. The earned income tax credit (EITC) is one of these benefits. Under current rules, a single mother with three kids earning $15,000 a year would be entitled to a tax credit of $5,891. This tax credit offsets any income tax liability she might owe and, if the credit’s bigger than her tentative tax liability, she’ll get a refund for the difference so that she may end up with more than $20,000. She’s still not out of poverty, but she’s better off now than before. The experts at the Urban-Brookings Tax Policy Center estimated that nearly 26 million households receive $60 billion in benefits from the earned income tax credit. Other low-income programs have a similar impact. They provide benefits to people who don’t have much income. Since these benefits are means tested — people receive them only if their income falls below a certain amount — many taxpayers who now benefit from these credits would lose them if their earnings increased. The offset isn’t dollar-for-dollar, but benefits do fall as earnings increase. For example, the EITC for a single mother with three kids at home would fall by $2,275 if her earnings doubled. It’s in this way that raising the minimum wage both helps and hurts women. That’s how these means-tested programs are supposed to work. Benefits fall as income rises. It’s good that the government provides assistance to citizens who don’t earn enough from their jobs to rise out of poverty. But, since providing assistance inevitably involves bureaucracy and some waste, it might be better to find a way to provide the assistance directly. The government could, for example, charge firms a fee for the cost that their employees impose on society when they use government assistance programs. In so doing, firms would internalize the external cost their low wages impose on society. Such a program would benefit not just the government by reducing the cost of its low-income program, but also the women who make up such a large share of minimum wage workers.

Journalists’ and activists’ strange approach to low-wage workers

_Sarah Jaffe is a staff writer atIn These Times magazine and the co-host of Dissent magazine’s Belabored podcast._ McDonald’s might raise its wages, according to its recent filing with the Securities and Exchange Commission. Wal-Mart is considering supporting an increase in the minimum wage, or at least that’s what spokespeople for the company have been floating in recent interviews (though at other times the company has denied this). It seems that strikes and multiyear pressure campaigns by low-wage workers have some impact on their employers. McDonald’s even admitted as much; the SEC report noted “increasing public focus on matters of income inequality” and worker actions were affecting their public image. Labor organizing, often declared dead on arrival, is having some impact. Even President Obama’s decision to raise the minimum wage for workers under future federal contracts was inspired by seven different strikes by low- wage workers at places such as the Smithsonian and the Pentagon. Not that you’d know it from stories in Politico, Bloomberg, NBC News and elsewhere. Strikes and worker organizing were nowhere to be found in their reports. It is probably safe to say that journalists, outside a small but dedicated cadre of labor reporters, have talked to more minimum-wage workers in the past year than in the previous 10. The stories we write can all start to sound the same after a while. Wages are too low, and that spawns a thousand problems. Poverty is expensive, as Barbara Ehrenreich recently detailed for the Atlantic; if you can’t afford a bank account, your pay might come to you on a prepaid debit card loaded with fees for accessing your own wages. If you can’t afford rent, you might be stuck living with that abusive ex. You may be caring for a terminally ill parent on top of your workweek, and when jobs are scarce, your commute might take you two hours. I say “you” deliberately here, because much of the writing about low-wage workers tends to obscure just that fact — that these stories could well be about you. Too much writing on the left and the right has tended to treat the people in some of the nation’s most common jobs as if they are some exotic Other rather than our neighbors, our family members and ourselves. McDonald’s workers are trotted in to tell stories of hardship again and again, pushed for more detail, asked to lay themselves bare. It’s a particular kind of emotional labor that we ask of these workers. In addition to the strength and courage to tell the boss, to his face, that you’re walking out because you’re sick of how you’re being treated, we demand that you perform the role of the poor person for us, and we squabble over the right things to do for you. Our discourse on poverty is fed by stories of misery; it gorges itself on tales of cracked ceilings and no heat and feeding the family on a few dollars a week. But this is just another way that the poor must prove themselves “deserving” and for the better-off to feel righteous for helping them. The right claims that raising the minimum wage will make these jobs disappear altogether and that if they don’t like jobs they’re in, they can get another one. (Perhaps they will like being a home health care or personal care aide, since according to Department of Labor statistics those are the fastest- growing career paths for most Americans, and they pay a whopping $20,000 a year.) The left wants to raise the minimum wage, which is a good start, and perhaps even endorses fast-food workers’ demand for a union. But too often we — and I do mean to include myself here — erase the agency of the workers, debate whether they’re really demanding these things of their own volition , talk about them as though they are easily manipulated children rather than adults making a decision. We, too, talk about them as though they are not us. Americans are mostly disconnected from the labor movement — only 6.7 percent of private sector workers are part of a union — and that means we’ve become disconnected from the idea of solidarity. Instead, we have an ill-defined feeling that we should do something for those worse off than ourselves, something that often turns into a pity-charity complex. Rebuilding the social safety net is a good start, but something more powerful would be a real understanding that we’re all in this together. I heard that understanding in the voice of Alex Shalom, another low-wage worker who stood up for himself and his co-workers against his boss — this time, his boss at Bank of America. “I think people need to know that tellers are just cashiers with ties on,” Shalom told me, placing himself squarely in the same movement as McDonald’s and Wal-Mart workers. The perceived class difference between a bank worker in a suit and a fast-food worker in a logo baseball cap evaporates when the rent comes due, and many of us know what it’s like to do the math of monthly bills and find you’re coming up short. We need a movement that makes us feel strong — all of us, whether we work at Burger King or Bank of America or an automobile plant or in journalism. That means not just focusing on the poverty but also the power in the voices of a group of workers on the street outside the Wendy’s where one of their colleagues was just fired for organizing. It means giving those workers and their strikes the credit for the wins when they do come. Too often, people derive something that feels like strength from remembering that someone else has it worse. But that’s temporary, and real strength comes from all of us being strong together. **Read more on this issue:** E.J. Dionne Jr.: Raising the minimum wage is the right idea Matt Miller: Time for ‘Big Mac’ statesmanship Eugene Robinson: Democrats can win on raising the minimum wage Robert J. Samuelson: Minimum-wage mirage? Josh Eidelson: How Wal-Mart keeps wages low

A higher minimum wage for maximum societal benefit

The Post’s munificent proposal to raise the national minimum wage to $8 an hour [“A fix for the mininum wage,” editorial, Sept. 27] ignored the moral question of a living wage. The cynical and hypocritical concern of those who persistently oppose raising the minimum wage because it would deny entry-level work is, morality aside, poor economics. Even $5 an hour is not a bargain and is a waste for an employer who does not need the labor, and $13 an hour is okay if the employer needs the worker and the market can sustain it. San Francisco, with $10.55 as the minimum wage, has found that recruitment and retention of good fast-food workers has improved. Low wages are just a form of cost-shifting. Someone somewhere has to pay for the housing, health care and other living costs of those who work full time but cannot fully support themselves. Our system today shifts many of these costs to the middle two quartiles and away from the top quartile. Ultimately, the question of the minimum wage is a justice issue. ****Ernest C. Raskauskas Sr.** , Potomac**

In nation’s capital, $15-hour minimum wage is headed toward 2016 ballot

A historic measure to raise the District’s hourly minimum wage to $15 is headed toward next year’s ballot after city officials released a ruling Wednesday approving a voter initiative that places the nation’s capital at the center of a wage fight taking place in cities across the country. If approved, the initiative would lift Washington’s minimum wage above every other city’s on the East Coast. It would push the District into a burgeoning, urban liberal vanguard on higher wages that includes Seattle, San Francisco and Los Angeles. The ballot measure will go to voters in November 2016 only if supporters collect enough signatures, but even opponents say that is likely. It is one of several efforts moving ahead across the nation; also Wednesday, a state panel in New York approved raising the hourly rate to $15 for fast-food workers. The day’s developments show that organized labor groups continue to gain ground rapidly on the issue, roiling pro-business groups and prompting a heated debate among both Republican and Democratic candidates for president. In D.C., the minimum wage is $10.50 and is scheduled to rise to $11.50 next year. If the initiative passes, the new $15 hourly rate would raise a full-time worker’s annual pay to more than $31,000, up from the current minimum of about $22,000. In one of the most expensive cities in the nation, where the median monthly rent for a one-bedroom apartment is $2,000 and where studies show that wage disparities are among the largest in the nation, the boost is not an unaffordable luxury but a necessity of survival, advocates say. “People should not work a full-time job and live in poverty,” said Delvone Michael, director of the D.C. chapter of the Working Families Party, part of a group of labor unions and other progressive groups backing the measure. Business groups warned that such measures would jeopardize jobs and cause businesses to close. The National Restaurant Association, which formed a group called Save NY Restaurants to try, unsuccessfully, to push off Democratic Gov. Andrew M. Cuomo’s plan to raise wages, warned of layoffs, automation and worse. “Fifteen dollars is going to change the way restaurants do business,” said restaurant association spokeswoman Christin Fernandez. “They are going to be forced to cut labor, to automate, and for some, possibly, they may need to close.” Fernandez warned of more kiosks, tablets and other uses of technology to take orders and check out customers in an industry that often operates on single-digit profits. “There is a very low barrier to entry in restaurant work,” she said. “We hire young workers and people who might not have an entry to the workforce otherwise. Many of our members say they will not be able to continue to hire unskilled workers at $15 an hour.” ******** The D.C. measure moved ahead Wednesday after a ruling by the city’s election board, allowing proponents to begin a petition drive that is widely expected to succeed. Several D.C. business groups opposed to the ballot measure urged the Board of Elections in briefs and testimony to reject it. The D.C. Chamber of Commerce released a poll of business owners in which more than half of the respondents said they would cut jobs if the minimum wage rose to $15. In its ruling, the board rejected every argument by opponents. “While the Board recognizes and can appreciate the concerns of small business owners who bemoan the prospects of increased operating costs, the Board is not authorized to reject initiatives due to financial hardships on private business owners,” the ruling stated. Supporters must now gather about 23,200 signatures, or 5 percent of District voters, to qualify the measure for the ballot. Proponents said they are confident of clearing the signature hurdle and of prevailing at the polls. A public opinion poll commissioned in the spring by advocates showed support in the District for a $15 minimum wage at about 70 percent. “I think it’s so popular because middle-class folks are feeling squeezed, too. Everyone understands this is an issue,” said Michael, of D.C. Working Families. Wednesday’s developments were sure to add to the debate over the minimum wage that has already infused the 2016 presidential contest. On Wednesday, Sen. Bernie Sanders (I-Vt.), a Democratic presidential contender, introduced a bill along with four congressional Democrats to set a national minimum wage of $15 an hour. He then addressed hundreds of striking low-wage workers outside the U.S. Capitol, calling the current federal minimum of $7.25 per hour a “starvation wage.” Another Democratic presidential primary candidate, former Maryland governor Martin O’Malley, also recently endorsed a $15 national minimum wage, outdoing the state increase to $10.10 that he supported just last year as governor. (Virginia uses the federal minimum of $7.25.) The overwhelming leader of the Democratic pack, Hillary Rodham Clinton, has not been precise about what figure she thinks is appropriate, either for local jurisdictions or nationally. She has given arm’s-length support to the $15 idea by dialing into a labor group forum in Detroit last month. But on a recent campaign stop in New Hampshire, she said she supports $15 an hour “in certain localities,” such as New York or Los Angeles — but not necessarily everywhere because of “different economic climates.” Clinton is expected to give a speech on wages later this summer. On the Republican side, Wisconsin Gov. Scott Walker garnered headlines in his first weeks on the GOP presidential campaign trail by blasting the existence of any minimum wage as “lame” and serving “no purpose.” The District’s proposed minimum wage could tee up another showdown between the city’s Democratic majority and its Republican overseers in Congress. Although some bipartisan support exists on Capitol Hill for raising the minimum wage, a $15-per-hour rate is viewed by many conservatives as an affront to market economics. As they tried this year with the District’s marijuana legalization effort, congressional opponents could use their oversight powers to block the ballot measure from taking effect. The D.C. measure would mirror Seattle’s by phasing in a flat $15-per-hour minimum wage by 2020. That would be 30 percent higher than the $11.50 rate that the D.C. Council and mayor, as well as adjacent counties in Maryland, agreed to last year. Almost 43,000 District workers, or 7 percent of the city’s workforce, now earn less than $12 an hour. As in San Francisco, the measure would also for the first time force D.C. restaurants to pay workers the minimum wage plus tips. Restaurants in the District are required to pay only $2.77 per hour, as long as tips bring servers up to the equivalent of the minimum wage. Beginning in 2025, D.C. restaurant workers would be due $15 an hour plus tips. The minimum wage would also be indexed to inflation. Unlike in New York, where Mayor Bill de Blasio (D) has been a forceful proponent for boosting pay, D.C. Mayor Muriel E. Bowser has remained noncommittal about supporting the $15 initiative. As a council member in 2013, Bowser (D) voted for an increase to $11.50 an hour by 2016. At the time, that appeared likely to make the District’s minimum one of the highest in the country. But the District was quickly eclipsed. The proposal that advanced Wednesday in New York would effectively split the state’s minimum wage into two tiers, one for those working at restaurants and the existing wage of $8.75 for everyone else. Advocates for the poor said they hoped the move would create unbearable pressure on retail and other low-wage industries to also boost pay. The increase for fast-food workers will occur first in New York City in 2018 and then statewide in 2021. Lydia DePillis contributed to this report.

California’s minimum wage is about to hit $10 an hour

California lawmakers will vote this week on a proposal to increase the minimum wage to $10 an hour, and the proposal appears to have the votes to pass easily. In a joint statement Wednesday, Gov. Jerry Brown (D), state Senate President Darrell Steinberg (D) and Assembly Speaker John Perez (D) said they backed the wage hike, all but assuring its passage. Democrats hold super majorities in both the Senate and the state Assembly. Business groups hate the proposal, but there’s not much they can do about it. “You’ve got the governor sending more than just smoke signals and everybody seems to be singing Kumbaya,” Senate Republican leader Bob Huff told the _Sacramento Bee_. “So I think it’s pretty much a done deal.”    *[WSU]: Wayne State University The bill would raise the state’s current minimum wage, $8 an hour, to $9 an hour on July 1, 2014. On January 1, 2016, the minimum wage would rise another dollar, to $10 an hour. That would make California’s the highest minimum wage in the nation. Right now, four states and the District of Columbia have higher minimum wages, according to the Department of Labor. Washington State, where an hour flipping burgers will earn at least $9.19, has the highest minimum wage in the nation.    *[WSU]: Wayne State University Legislation passed in Connecticut and New York will increase the minimum wage in those states to $9 an hour in 2015, but no state has gone as far as California. Eighteen states and D.C. have minimum wages higher than the federal $7.25 an hour rate, while 23 states peg their rates to the federal level, according to a count compiled by the National Conference of State Legislators. Employers in any state where the minimum wage is set lower than the federal level still have to pay the $7.25 an hour rate the feds require to most employees.    *[WSU]: Wayne State University Louisiana, Alabama, Mississippi, Tennessee and South Carolina have never passed minimum wage laws. Click on the Department of Labor link above for a handy interactive map of current minimum wage levels.

Will de Blasio’s big raise for low-wage workers encourage other cities to follow suit?

Is the unlikely movement to improve the plight of low-wage workers reaching a point where it can’t be stopped? On Tuesday, New York Mayor Bill de Blasio signed an executive order expanding the city’s living wage law. The change means businesses housed in buildings that benefit from hefty city subsidies will have to pay employees who don’t receive benefits the so-called living wage, now $13.13, up from the current $11.90. The mayor and his supporters hope to pressure the state legislature to give the city authority to raise its minimum wage across the board. The expansion promises a substantial raise for an estimated 18,000 workers, including retail and fast-food workers, many of whom now make the New York state minimum wage of $8 an hour. The change had been long promised by de Blasio, who rode to victory in last year’s city election on a platform built around addressing income inequality in what critics call the nation’s most economically polarized city. It also comes on the heels of an announcement by California Gov. Jerry Brown Sunday that he had signed legislation to hold businesses responsible when their growing legion of subcontractors violate wage, workers’ compensation, or workplace safety rules. Also, in June, Seattle made history by becoming the first major city in the nation to adopt a $15-per-hour minimum wage. This year, at least 13 states and four cities saw minimum wage increases go into effect. Small victories, perhaps. We know that President Obama’s effort to push the federal minimum wage to $10.10 an hour is stalled, despite the fact that the minimum wage has lost buying power over the decades.  Also, activists are worried that the administration may be faltering on its commitment to extend minimum wage and overtime protections to some 2 million home health care workers by January. Still, the prospect of workers at the bottom of the labor heap—non unionized, often transient, and otherwise seemingly powerless—galvanizing a national movement to raise wages amid one of the worst job markets in decades seemed far-fetched. That was certainly the reaction less than two years ago when a couple hundred fast food workers walked off their jobs in New York demanding a raise to $15 an hour. Thee one-day strike, helped along by unions and other grassroots groups, eventually spread to 150 cities. Now, the idea of the nation’s least powerful workers demanding to be paid $15 an hour is not so surprising. “Fifteen dollars an hour might have seemed outlandish two years ago, when striking fast-food workers first made the demand in New York City,” said Christine Owens, executive director of the National Employment Law Project, a worker’s advocacy group. “But now, as momentum for higher pay sweeps the nation, it is increasingly becoming reality.

More cases for raising the minimum wage

The Sept. 5 front-page article “For many on minimum wage, the ends never meet” shined much-needed light on the struggle of low-wage workers. The article, centered on an airport worker hoping tips on a particular day would be enough for his Metro ride home, missed an overlooked segment of workers: tipped workers. In Virginia, where Charles Wells is employed, the tipped minimum wage is $2.13 per hour, leaving some hardworking folks at an even greater and far more erratic disadvantage. More often than many may realize, tipped workers end up with much less compensation from tips than is necessary to cover the difference in their base pay. All workers need a raise, including those who get tips. Financial security includes not only a decent wage but also the stability to plan for and make those ends meet. ****Don Kusler** , Washington** The writer is national director of   Americans for Democratic Action. **The impact on employment** of raising the minimum wage is an issue for which there is considerable evidence from more generous countries. Australia raised its minimum wage to more than $17 an hour (more than $13 in U.S. dollars), enough even to pay for housing in the D.C. area. Based on data from last month, Australia’s unemployment rate is 5.7 percent, not notably higher than the U.S. rate. While Australia has a smaller and less diverse economy, this empirical experience should be relevant. ****Alan Miller** , Rockville**

PostScript: Sargent and bringing on the minimum-wage war

Greg Sargent’s blog post from this morning addressed the argument over minimum wage. It was nice of him to headline it: “Bring It On,” given that was going to happen, invitation or no. Whether backing up or knocking down the president’s argument to raise the minimum wage, commenters wasted no time on preambles or any other throat-clearing.    *[WSU]: Wayne State University **Dan999** argues that not raising the minimum wage is the same as decreasing it, given the constant rise of the cost of living. And actively lowering minimum wage has, Dan says, been very bad for everyone:    *[WSU]: Wayne State University **DocAwesome** applies medical knowledge to the dollar-circulation discussion:    *[WSU]: Wayne State University **Grant Johannessen** argues that an across-the-board minimum wage increase brings us all closer to the minimum and decreases our wages in comparison to the new minimum:    *[WSU]: Wayne State University **Oscar_R** says that the places employing people at minimum wage tend to be places where people who make minimum wage do business, so money the companies give out in wages will come back to them via increased prices:    *[WSU]: Wayne State University **Dan999** (hi again!) uses the same situation to argue FOR minimum wage increases:    *[WSU]: Wayne State University **truthwillout** says, well, look at places that have hiked the minimum wage. What effects did it have, and how did they do it?    *[WSU]: Wayne State University **swan_502** argues that if the goal is less overall inequality, don’t set an arbitrary number as a minimum wage but rather use a proportion for the top and the bottom rungs’ pay. That makes the CEO more invested in the average worker’s welfare:    *[WSU]: Wayne State University **cato** says don’t start with the wage — make it easier for workers to become more valuable:    *[WSU]: Wayne State University But productivity has surged, and wages have not, making PostScript doubtful that increased worker “value” does much necessarily for the worker’s wallet.    *[WSU]: Wayne State University

Minimum-wage hikes do close restaurants. Just not the ones you care about.

The study, a working paper by Dara Lee Luca at Mathematica Policy Research and Michael Luca at the Harvard Business School, analyzed almost 10 years of Yelp rating and closure data from more than 30,000 San Francisco Bay area restaurants. By comparing closure rates to user ratings and the timing of the region’s multiple minimum-wage increases, the Lucas, who are married, were able to determine how the hikes impacted a restaurant’s chances of closing. Those chances varied widely by the restaurant’s popularity, concludes the study, which was sponsored by Yelp. Among 3.5-star restaurants, every $1 increase in the minimum wage increases the restaurant’s chances of closing by 14 percent. But five-star restaurants don’t experience that same effect. “You are losing something from the market,” Michael Luca acknowledged. “But what you’re losing is the lower-quality businesses.” The Lucas' results speak to a critical question in the debate over minimum wage: Whom will higher wages hurt in the wider economy? While this data doesn't address questions of jobs or unemployment, which many other studies have done, it does suggest that the impact on business may be less confined than some critics have expected. Rather than handicapping successful businesses, higher wages appear to shorten the time before unsuccessful businesses close. And because there's a great deal of churn in the restaurant industry, new restaurants frequently replace the old ones. Luca has a few theories on why minimum-wage hikes might impact low-quality restaurants more than high-quality ones. For starters, five-star restaurants generally have better service. (That’s a component of the Yelp score.) It makes more economic sense for a restaurant that values and depends on good service to invest more heavily in its workforce. Luca’s data also suggests that five-star restaurants are generally more profitable: that makes them less susceptible to market shocks, and more likely to stay open at any wage level. A three-star restaurant would also be more vulnerable, Luca said, to something like sudden increases in rent. “At any wage level, some businesses are doing well and some aren’t,” Luca said. “If you’re closest to the margin already, then something like a minimum-wage increase is more likely to push you over the edge.” Importantly, Luca’s study did not look at the impact of wage increases on employment — something he emphasizes. Because food service is a high-churn industry, in which restaurants open and close and employees move around all the time, the fact that one restaurant closes does not necessarily mean more people will be unemployed. There is also little correlation between a restaurant’s Yelp rating and its price, Luca cautioned. While it may be tempting to come away from his results with the impression that low-end restaurants — and employees — face more risk, that is not consistent with the data, Luca said. In his sample, the average restaurant had a tenure of almost six years, a rating of 3.6 stars, and a price indicator of 1.6 “dollar signs” — Yelp-speak for roughly $22 per head.  “If anything, the study shows that a higher minimum wage might make the market more competitive and reduce the number of poor performers,” concluded Paul Sonn, the general counsel and program director at the National Employment Law Project. “Some firms are better at adjusting to competitive pressure than others.”   That backdrop has made the debate on the minimum wage even more fractious. The restaurant industry is the second-largest private-sector employer in the country, according to the National Restaurant Association, and it employs the largest share of minimum-wage workers of any business. Advocates for a higher wage argue that a hike would reduce poverty and inject billions of dollars into the economy, even if some businesses have to adjust. Critics, on the other hand, have cited studies like the Lucas' as evidence that a higher wage would result in even more restaurant closures and, possibly, layoffs. In a statement, Cicely Simpson, the executive vice president of policy and government at the National Restaurant Association, described minimum-wage increases as a threat to jobs, small businesses “and the overall economy.” “This study shows that government mandates price some businesses out of the market,” said Dan Mitchell, a senior fellow at the Cato Institute, a libertarian think tank that opposes minimum-wage increases. “Which is exactly what theory tells us.” Luca, for his part, warns against drawing any sweeping conclusions from his work. He doesn’t see it as a clear point for or against the minimum wage — more like a clarification of something economists already knew. A wage hike has to hurt someone, somewhere: This helps nail down who will be impacted. “Now we know what kind of trade-offs we're dealing with,” he said.

The push for higher wages is starting to look like a real movement

Around the country today, protests will take place demanding a $15 minimum wage. That would more than double the current federal minimum of $7.25.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico And guess what: A push for higher wages is beginning to look like a real movement, with all the possible political effects that entails. Here in the nation’s capital, a new campaign is starting to put a measure on the ballot to raise the city’s minimum to $15, which would have Washington join Seattle and San Francisco, other cities that recently voted to raise their minimums to that level in stages over the next few years.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Regardless of the state of legislative action, companies are feeling pressure to increase wages. McDonald’s announced a wage increase at its company-owned stores, and though it was criticized because the increase was only $1 an hour, what may be most significant is that they felt the need to boost wages at all. Even the notoriously stingy Walmart recently said it would increase its own minimum wage to $9 an hour this year and $10 next year.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico As a movement, this push confronts some real obstacles, despite the fact that about 70 percent of the public consistently tells pollsters they’d like to see the minimum wage increased. Congress is controlled by a party that is steadfastly opposed to increasing the minimum. Many middle-class workers don’t see the minimum wage directly affecting them. Organizing those who would most directly benefit is a difficult task. And perhaps most importantly, the natural foundation for such a campaign — labor unions — are at a place of historical weakness.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Despite all that, momentum for this movement seems to be building, in part because it has a very specific demand. It’s one thing to talk in general terms about income inequality and stagnant wages, but the advocates of the $15 minimum say, “Here’s something we can do about it right now. Which side are you on?” The more attention it gets, the more Democratic politicians will need to take a stance on this, and it seems pretty obvious which position they’re most likely to take. It’s particularly important what Hillary Clinton does, since she is very close to being the de facto leader of the Democratic Party. As Noam Scheiber explains, the $15 campaign puts pressure on Clinton to come up with a number for what she would like the minimum wage to be. President Obama has proposed raising it to $10.10, which in the face of a campaign for $15 may sound too tentative.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico That demonstrates how even without a dangerous primary opponent (yet anyway), Clinton can still be pulled to the left. The $15 campaign could well expand the terms of the debate, defining what real action (and not mushy compromise) would look like. The fact that increasing the minimum wage is so consistently popular gives Clinton room to make her position even more liberal. For their part, Republicans are intimidated by the minimum wage issue — they don’t want to increase it, but they know how unpopular that position is. So they say things like “I don’t want people to make $10.10 an hour. I want them to make $30 an hour,” but without any new law; only through growing the economy (that would be Marco Rubio), which is a laughably transparent dodge. The more obvious it is that they’d rather talk about something else, the more likely Clinton is to press the issue.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The minimum wage is obviously not the only policy change we could make to address inequality. But it’s something everyone understands, and with a growing movement behind it — including what will likely be a series of ballot measures around the country in 2016 — it could become an important part of the debate in the presidential campaign.

Minimum-wage wars: The fight for better pay is spreading across the U.S.

Around the country there are battles being waged over the minimum wage. Workers, community and labor activists are fighting to have companies pay people enough money to live a decent life. The movement is paying off in some places. The Seattle city council recently voted to raise the local minimum wage to $15 an hour, reports The Washington Post’s Reid Temple. But depending on the size of the company, the higher wages will kick in over a three- to seven-year period. Washington already has the highest minimum wage in the nation, at $9.32 an hour. “The federal minimum wage is now $7.25 cents an hour, about $15,080 for a full-time, year-round worker. At that level, it means poverty wages for a family of three, and weakened demand for the economy,” wrote Katrina vanden Heuvel, the editor and publisher of the Nation magazine, who also writes a weekly column for The Post. The Washington Post politics blog The Fix has a chart you need to see. It’s about the decreasing value of minimum wage. “Every so often, the minimum wage goes up — but it hasn’t kept up with the value of the dollar,” The Post’s Philip Bump wrote. Using metrics created by Oregon State University paired with minimum wage data, you get to see “how the federal minimum wage has evolved over time, in nominal dollars (what the wage was set to that year) and in 2014 dollars,” Bump writes. “Poverty wages offend both justice and common sense,” wrote vanden Heuvel. “It is time to raise the floor.” **Color of Money question of the week** Do you think it’s time to raise the roof on the federal minimum wage? Send your comments along with your name and city to colorofmoney@washpost.com. **Live chat today** Join me at noon ET for a discussion with Zac Bissonnette about his new book, “Good Advice From Bad People: Selected Wisdom From Murderers, Stock Swindlers, and Lance Armstrong.” Millions of consumers have been duped by people — many once touted as icons — who turn out to be charlatans or who gave advice that they themselves didn’t follow, says Bissonnette, a personal finance writer. Read my review of the book, which was my May pick for the Color of Money Book Club. What do you think? Have you taken advice from so-called experts and now regret it? We will also be taking questions about your own personal finances. If you can’t join me live, come back later and read the transcript. Or send in your comment or question early. **Readers respond to extra airline fees** In my last electronic newsletter, I asked what you thought of how extra fees are disclosed by the airlines and Internet sites that help you find fares. The U.S. Department of Transportation has proposed a new set of rules that would, among other things, require airlines and ticket agents to disclose upfront fees for checked bags, carry-on items and advance seat assignments. Recently, Southwest Airlines was hit with a $200,000 fine for advertising that customers in Atlanta could fly to New York, Chicago or Los Angeles for just $59. “But the bargain fare turned out to be too good to be true,” reported Marilyn Geewax for NPR. Here’s what two readers had to say in response to the Color of Money question of the week: “Fees (other than checked bags) are absolutely NOT adequately disclosed at the time of purchase, and if you don’t know the right questions to ask, it’s very hard to find out prior to purchase which ones will affect you,” **Kimberly Rotter** of San Diego wrote in an e-mail. “Fee horror stories have alarmed me to the extent that I am willing to carefully research the issue prior to buying every ticket. That means I don’t always opt for the lowest fare, but it also means I know what to expect. I have a couple of preferred airlines, and I am willing and able to work within their fee structures. Also, having frequent-flyer accounts and their co-branded credit cards are two ways that I stay up to date on any policy changes, including fees. I read the e-mails they send.” **Lynn Saxton** of Warsaw, N.Y., wrote: “I remember when choosing a credit card meant struggling through pages of fine print. I would love to see a clear, concise formula for disclosing airline fees, etc., formulated along the lines of the Schumer box for credit cards. However, the problem with airline fares is that the rules governing prices depend on so many factors — when you buy, how you buy, where you choose to sit, whether it’s a roundtrip or one-way ticket, etc. — that presenting it in a simple format seems impossible. And perhaps that is the point.” Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C., 20071, or michelle.singletary@washpost.com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to www.postbusiness.com. Follow her on twitter @SingletaryM.

Workers — not employers — are the real wage movers and shakers

“We’re too big and complicated a system to do anything in reaction to a particular group or something happening,” Karen King, who has the wonderful title of “chief people officer” at McDonald’s, said Wednesday, explaining her company’s decision to raise wages for some of its employees. If you believe that, don’t go near anyone purporting to sell you a bridge, even if it comes with fries on the side. McDonald’s announcement that it would raise the wages of workers at the restaurants it owns, but not at its franchises, to $1 above the local minimum wage just happened to come two weeks before fast-food workers’ scheduled demonstrations in 200 cities to call for an hourly living wage of $15. It also came two days after the first administrative law hearing began in New York to determine whether the company can be ruled a “joint employer” of the workers at its franchised outlets — a ruling McDonald’s is trying to prevent since, as a joint employer, it would be liable for things such as wage and hour violations and its workers would have a better shot at forming a union. The raise at McDonald’s, even though it applies only to a small fraction of the employees who work at the Golden Arches, is one of a series of remarkable, if incomplete, victories that low-wage U.S. workers have won in recent months. It follows announcements from Wal-Mart, Target and like establishments that they’re raising pay for their poverty-wage workers. It also follows minimum-wage hikes enacted by voters and elected officials in numerous cities and states. And it reflects the broad support in poll after poll for raising the federal minimum wage from its abysmal $7.25 an hour. Part of the workers’ success is due to the improving job market, which gives workers more leverage. Part of it is due to the domino effect of corporate raises: If a worker can make more at Wal-Mart than at Target, why work at Target? Part of it is due to the better performance that more highly paid workers turn in. “Motivated teams deliver better customer service,” McDonald’s chief executive, Steve Easterbrook, told the Wall Street Journal in explaining his decision to raise wages — by which logic, however, it would surely make sense for McDonald’s to mandate a raise, as it mandates so much else, at its franchises. But the prime mover behind these raises, whether company-specific or legislative, is the workers themselves. The campaigns of the fast-food workers, Wal-Mart employees and others have functioned as a kind of second act to the Occupy Wall Street movement, not just highlighting the enormous disparities of income and wealth in our society but also putting forth a concrete demand, as Occupy never did, to remedy some of inequality’s most remediable extremes. In a sense, what these workers have created is a form of collective bargaining by other means. With the ability to form unions effectively blocked by the weaknesses of the National Labor Relations Act, which employers can and do violate with impunity, workers have crafted other ways to advance their interests. Particularly crucial has been their growing political power in America’s cities, which, as never before, have become the nation’s liberal power base. It’s cities where immigrants have not only flocked but also organized and won political power, cities where left-leaning millennials have chosen to live, cities where African Americans have maximized their political clout, cities that have begun enacting municipal wage hikes and paid sick-day ordinances, and cities that use their purchasing and regulatory powers to compel private-sector employers to treat their workers decently. Today, 25 of the nation’s 30 largest cities, including many in red states, have Democratic mayors, and this partisan imbalance is in many places the consequence of the political organizing of low-wage workers thwarted by the NLRA’s weakness and employer opposition from organizing their workplaces. There are limits, however, to what this kind of organizing can achieve. A more egalitarian economy requires a more egalitarian balance of power — which is why the only time in U.S. economic history when a rising tide really did lift all boats was in the three decades following World War II, when unions were sufficiently large and powerful to compel even non-union employers to match their wage scales. States and cities can raise the minimum wage and the Wal-Marts and McDonald’s can hike their pay, but these moves, commendable though they be, don’t significantly alter the power imbalance hard-wired into our current economy. That still requires the legal ability to form unions — a goal that eludes workers in our plutocratic age. _Read more fromHarold Meyerson’s archive or follow him on Twitter._ **Read more about this topic:** Harold Meyerson: How to get a raise at McDonald’s Catherine Rampell: Being a poor corporate citizen is hurting McDonald’s Harold Meyerson: A higher minimum wage may actually boost job creation

California’s experiment on the most vulnerable

The Post reports: “California’s plan to raise its minimum wage to $15 an hour by 2022 — higher than any other state in the union — would put the state in uncharted territory, carrying both hope and danger for workers in the nation’s largest economy.” The article continues, “The effects are difficult to predict, many economists say, because there is little historical precedent for raising minimum wages so high on such a wide scale. By 2018, California’s minimum wage would be higher than the rate is now in France and Australia, which the Organization for Economic Cooperation and Development says had the world’s highest wage floors in 2015.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Isn’t this just what liberals wanted? Well, there is remarkable queasiness about experimenting with the lives of California’s most vulnerable citizens. The American Interest observes:    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Well, “absorbing” the hike even in places such as tony San Francisco means fewer employees sweeping floors, busing tables and working in other entry-level jobs. The same market forces of supply and demand operate in big cities and small. The _New York Times_ , not exactly a bastion of Milton Friedman economics, candidly acknowledges, “Many economists, even some on the left, worry that a potential loss of jobs in a number of cities where wages are comparatively low could largely offset, and perhaps even more than offset, the boon of higher incomes at the bottom of the wage scale.” The Times quotes a liberal minimum wage expert as saying, “Just as the benefits of this policy are likely to be greater because it covers a greater share of the work force than for past minimum wage increases, the risk of these costs is also higher. It’s very unclear how that’s going to stack up.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico There is of course plenty of evidence of the adverse impact on employment from increases in the minimum wage in Washington, D.C. and in Seattle (“while the city of Seattle experienced a sharp drop in employment of more 11,000 jobs between April and December last year . . . employment in Seattle’s neighboring suburbs outside the city limits. . . increased over that period by nearly 57,000 jobs and reached a new record high in November 2015 before falling slightly in December.)    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico There is something deeply perverse in undertaking a massive public policy measure when evidence exists that it will hurt the most vulnerable, or that at the very least, there is a high risk it would do so. The impact of bad public policy of this type is not easily reversed. Employers leave the state and/or find innovative ways including new technology to eliminate head count. There is no guarantee that those jobs will ever return, and in the meantime the supply of entry-level jobs critical for those seeking to grab the first rung of the employment ladder dries up. The irony is that California is already _the_ worst state in the nation for income inequality, according to a report released in 2015:    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico There are many ways to help close the gap, including wage subsidies akin to the earned-income tax credit, improved education, anti-poverty programs modeled on successful efforts in New York, reduction in excessive licensing requirements and pro-investment measure such as reduction in the corporate tax code. Unfortunately, the Democratic-controlled California state government did not choose one of those. Instead, it picked the approach that in all likelihood is about to make income inequality and unemployment worse.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico

Vermont minimum wage will rise to $10.50 an hour

Low-wage workers in Vermont will see their paychecks steadily increase over the next four years after Gov. Peter Shumlin (D) on Monday signed a bill to increase the minimum wage. The legislation will raise Vermont’s minimum wage from $8.73 an hour, already almost a dollar above the federal minimum, to $9.60 in 2016, $10 in 2017 and $10.50 in 2018. Beginning in 2019, the minimum wage will be indexed to inflation. That phased-in approach, which several states have adopted, is aimed at reducing the impact of wage hikes on businesses. Still, local chambers of commerce and business groups have said the wage hikes will cost jobs for those who need them the most. Shumlin was among a handful of Northeastern governors who joined President Obama at the White House earlier this year to call for a higher minimum wage. But with action unlikely in the Republican-led House of Representatives, Democratic-run states are raising wages on their own. “States like Vermont realize that working people can’t support their families on the current minimum wage, and we’re moving ahead to do the right thing on our own,” Shumlin said. Connecticut, Delaware, Hawaii, Maryland, Michigan, Minnesota, West Virginia and the District of Columbia have all passed minimum wage increases this year. The Seattle City Council earlier this month raised their city’s wage to $15 an hour. Twenty-two states and the District of Columbia currently have minimum wages above the federal minimum. Another 19 have minimum wages equal to the $7.25 federal rate. A total of 38 states considered legislation that would have addressed the lowest-wage workers.

Scott Walker calls minimum wage one of many ‘lame idea’ from Democrats

WAUKESHA, Wis. — Scott Walker appeared to take aim at the national minimum wage on Monday evening, referring to it as one of many "lame ideas" pushed by Democrats. Walker's comment came in a lengthy interview with Fox News's Sean Hannity immediately following a speech formally announcing his entrance into the 2016 presidential race. Walker said the next president needs to speak the language of the industrial Midwest and connect with the working class.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico "The left claims that they're for American workers and they've just got just really lame ideas — things like the minimum wage," Walker said. "Instead of focusing on that, we need to talk about how we get people the skills and the education and the qualifications that they need to take on the careers that pay far more than the minimum wage." There has been a national debate over the minimum wage, which is $7.25 per hour for most workers. A number of cities and states have increased their minimum wages, often at the urging of Democrats. Republicans often oppose the measures on the grounds that they would burden struggling businesses. Hillary Rodham Clinton, the Democratic frontrunner, called for a higher minimum wage during an economic policy speech on Monday. U.S. Sen. Bernie Sanders of Vermont, who is also running for president, has called for a $15 per hour baseline. A spokeswoman for Walker's campaign has yet to respond to a request for comment.

Why this #BlackLivesMatter supporter opposes a minimum wage hike in St. Louis

Since the Black Lives Matter movement arose in the wake of protests over the police killing of an unarmed teenager last summer in Ferguson, Mo., it’s given new energy in many places to the fight for a $15 minimum wage. There’s a lot of overlap in poor, African American communities that see a strong link between racial and economic justice. But in St. Louis, a small fracture appeared Wednesday when Democratic Alderman Antonio French — who came to national prominence during the protests, has supported Black Lives Matter and sees himself as a mediator between residents and the police — published an editorial in the St. Louis American explaining his opposition to a measure that would raise the city’s minimum wage to $11 by 2018. Doing so, he argued, could send what few jobs exist in the community out to St. Louis County, which has given no indication it’s willing to raise its own wage floor.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico "In my neighborhood, when I look at the young guys, black males, unemployment is close to 50 percent,” French said in an interview. “For me, my main interest is to get people to work.” That puts him at odds with some constituents, like Ashli Bolden, a community organizer with Missouri Jobs with Justice who lives in French’s ward. “He’s screaming black lives matter, but we don’t deserve higher wages?” Bolden says. She’s noticed plenty of low-wage employers opening in the area, and thinks they could afford to pay more. “I can’t see these Family Dollars moving to the county because of a wage increase.” The tension illustrates a challenge that many poorer cities will face as residents press for higher wages: Although most cities that have raised their minimum wages thus far haven’t experienced dramatic job losses, the hikes being contemplated by city councils now are much larger. Places with much higher median wages, like Seattle and San Francisco, are likely better able to absorb large minimum wage increases without job losses. That has some economists warning that these smaller, lower-wage cities might do themselves harm by raising their minimums too far above the state’s baseline.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico "If you raise the minimum wage in one area, then businesses that pay minimum wage workers will relocate over time depending on the goods and services they provide and on how easy the migration is,” said Brian Speicher, a senior lecturer at the University of Missouri-St. Louis. "This is why state or federal increases are better, because it does not create imbalances in the labor market."    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Most of these smaller cities aren't going all the way up to $15. Kansas City voted to increase its wage to $13, Birmingham, Ala. raised its minimum to $10.10 over two years, and Greensboro, N.C. went up to $10 for city employees. Labor Secretary Tom Perez, while making a public show of support for the Fight for $15 in Detroit this week, declined to endorse a $15 minimum wage everywhere — cities should decide the best level for themselves, he said.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Part of French’s opposition to the $11 minimum wage bill — which needs one more vote in the city council before going to the mayor, who has signled he would sign it — is that the city so far hasn’t undertaken a formal study of how such an increase would affect the local economy, as Los Angeles did before raising its minimum wage to $15.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico At the moment, there’s a big income difference between St. Louis City and St. Louis County, which wraps around the urban core: Median household income in the city is $34,582 a year and 27.4 percent of residents fall below the poverty line, compared to $58,910 and 10.9 percent in the county. In the larger metropolitan area, which encompasses the city and several surrounding counties, the average wage for food preparation and serving workers is $10.04 — which may reach $11 through natural increases by 2018.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico According to French, employers are only willing to pay a finite amount, and he’d rather more people have low-paid, part-time jobs than a few people have well-paying, full-time jobs. “I’m just trying to spread the pot out as much as possible so people can have more money in their pockets,” he says. “And this hurts our efforts a little bit." But Jeanina Jenkins, who now makes $8.65 an hour working at a McDonalds in St. Louis, thinks the wage hike would create a virtuous circle, increasing the size of the pot for everyone. "If the bill does get passed, more businesses will want to come into the community, because there will be more money in the community. They will see that people aren’t living in poverty,” she says. “This is an opportunity he can use to change and push to better the communities. Try it out and then see what happens.” **Correction:** _A previous version of this story misidentified the newspaper in which French published his op-ed. It was the St. Louis American, not the St. Louis Post-Dispatch._    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico

Montgomery council supporters of $15 minimum wage try again

Legislation to bring a $15 minimum wage to Montgomery County, vetoed in January by County Executive Isiah Leggett (D), was reintroduced Tuesday by its chief council sponsor, setting the stage for an election-season debate over whether it would help or harm low-income workers. The revised bill, presented by Council member Marc Elrich (D-At Large), still calls for the hourly wage, currently $11.50, to reach $15 for most employers by 2020. But it attempts to address concerns raised by opponents of the original version by softening the impact for certain segments of the county economy. The legislation gives nonprofit organizations, adult day-care providers and companies with fewer than 26 employees until 2022 to comply. Beginning in 2023, the minimum would rise based on a consumer price index for urban workers. Elrich, one of three council incumbents running in the 2018 Democratic primary for county executive, acknowledged Tuesday that the bill is likely to undergo further changes. But he said the pernicious effects of low wages on children and families make a path to $15 an imperative for Maryland’s largest, and one of its wealthiest, jurisdictions. “We need to get a bill and get it soon,” said Elrich, who led passage of the council’s 2013 law increasing the minimum wage from $7.25 to $11.50 over four years, part of an unusual regional effort that saw the District and Prince George’s County pass similar measures. New York state and city, California, Seattle and the District have all approved gradual increases to $15. At least three of Maryland’s 2018 Democratic gubernatorial primary candidates, Prince George’s County Executive Rushern L. Baker III, State Sen Richard S. Madaleno Jr. (D-Montgomery) and former NAACP president Benjamin Jealous, have all expressed support for a $15 statewide minimum. But there is still no consensus among economists about the long-term effects of a higher minimum wage. If anything, the debate has grown more contentious. Last month, economists at the University of Washington found that when Seattle’s wage grew to $13 in 2016, low-income workers across all businesses lost an average of $125 a month because of reduced hours or job loss. A different study of Seattle restaurant workers by the University of California at Berkeley found that wages for low-income workers increased without any significant job loss. Leggett vetoed Elrich’s first $15 proposal, which passed the council 5 to 4 — one vote short of the supermajority needed for an override — saying he was concerned about damaging the county’s economic competitiveness. He left the door open to considering a revised bill, but commissioned PFM, a Philadelphia-based economic consulting group, to conduct a study of the potential impact on the county. That report is due as early as Friday. The Montgomery County Business Coalition called the council “irresponsible” for introducing the bill before release of the PFM report and on the eve of its six-week summer recess. The group asked that the bill be withdrawn and that any further action be postponed “until the Montgomery County government study is released and the public has had time to review the findings.” Elrich said the PFM study was “nonsense” because it was impossible to project the future impact of a wage increase. He was also critical of polling that the firm has conducted as part of the study, asking county employers about the potential effect of a wage increase. The exercise is certain to produce negative responses, Elrich said. “I know they will project that this will cost jobs,” Elrich said. Council member George Leventhal (D-At Large), a co-sponsor of the Elrich bill who is also running for county executive, lamented that the public discussion has been dominated by the impact of a wage increase on businesses. He put out a call to low-wage workers to step forward during upcoming hearings on the bill. “Employers are very eager to weigh in,” said Leventhal, who also supported the first version of the bill. “ Those who labor in the shadow of poverty unfortunately have not been ringing our bell.” Elrich and Leventhal are joined by Council members Hans Riemer (D-At Large), Tom Hucker (D-Eastern County) and Nancy Navarro (D-Mid-County) in support of the bill. The four in opposition — council President Roger Berliner (D-Potomac-Bethesda) — also a candidate for county executive — Nancy Floreen (D-At Large), Sidney Katz (D-Gaithersburg-Rockville) and Craig Rice (D-Upcounty) have not ruled out saying yes to $15, but say they want to see the study first.

Minimum wage increases haven’t grown the middle class. $15 might be different.

Democratic candidates in the presidential race are extolling the virtues of a higher minimum wage, and not just for workers at the bottom of the pay scale. Party front-runner Hillary Clinton included a higher (but unspecified) minimum wage in her package of economic proposals, all aimed at raising the “real incomes of everyday Americans.” Her rivals Bernie Sanders and Martin O’Malley have endorsed a $15-an-hour minimum nationwide, as part of broad strategies to lift workers from poverty and expand the middle class.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico If you're a worker earning the minimum, it's easy to see how a higher minimum wage would boost your pay (provided your employer doesn't eliminate your job to save costs). But how might raising the wage push other, higher-paid workers toward the middle class? You would need what some researchers call a "ripple effect," where employers respond to a minimum-wage hike by raising wages for more experienced employees, too, in order to keep them ahead of their entry-level colleagues. In theory, that "ripple effect" could be large enough to bump some workers from the high end of poverty and into the lower reaches of the middle class. In recent years, though, there's not much evidence of that happening. An analysis by the economic research group EMSI shows no correlation between metro areas who raised their minimum wages between 2010 and 2014 and the cities that added the most "living-wage" jobs, which begin at the low end of what many economists consider middle class.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico EMSI also found little correlation between the pace of job growth in an area and whether the area increased its minimum wage. This suggests that, in recent years at least, minimum-wage hikes haven't been the job killers that some economists fear.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “For cities with a minimum-wage increase, we found that the change in minimum wage _could_ have an effect on percentage job growth — but definitely does not have an effect on the share of living wage jobs,” said EMSI spokesman Josh Wright. “This is likely because most occupations that pay at or above the living wage aren't affected by any changes to minimum wage laws."    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico In other words, raising the wage for fast food workers doesn’t make it more likely that plumbing companies — which already pay a little more — will boost their salaries, too. Both those conclusions will be tested in the years to come, though, because a wave of cities have recently passed much more aggressive minimum-wage increases. The hikes of the last several years were relatively small, compared to, say, Los Angeles's move to a $15-an-hour minimum. Much larger increases at the bottom could lead to a stronger ripple effect that pushes more workers up into the middle class. They could also force more employers to cut jobs overall, to save costs. Comparing cities in Florida and Minnesota illustrates how middle-class job growth and minimum wage increases haven't gone hand in hand over recent years.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Between 2010 and 2014, Florida raised its minimum wage by 68 cents, to $7.93. In most of the state's metropolitan areas, including Orlando, Pensacola, Tallahassee and Sarasota, only between 18 and 25 percent of new jobs paid the local living wage for two adults and one child, which is to say a salary that would put the household in the lower middle class.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico That’s partly because while Florida added jobs during the economic recovery, the growth came disproportionately in the hospitality industry, which tends to pay near the bottom of the wage scale.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “I don’t think there’s a magic wand in terms of getting people to a living wage,” says Sean Snaith, head of the Institute for Economic Competitiveness at the University of Central Florida. “I think the increase in the minimum wage in Florida has not triggered some larger scale rise in wages across the board.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Compare that to Minneapolis-St. Paul, Minn., where the minimum wage stayed the same as the federal minimum from 2010-2014. (Minnesota has since decided to raise it). There, a full 60.9 percent of new jobs paid the living wage for the area. Part of that may have to do with the large number of healthy and growing company headquarters in the area, which generate relatively well-paid corporate office jobs.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico That’s an extreme contrast, but the point is this: In recent years, whether or not an area creates more living wage jobs has more to do with its underlying economic makeup than where it sets its minimum wage.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Even the research that looks at the spillover effect of minimum wage in other periods finds that it only meaningfully impacts the bottom 10 to 25 percent of the workforce, with diminishing influence as you move up the pay scale. That’s because employers usually react to minimum wage hikes by giving a smaller raise to those making just above the minimum, and an even smaller raise to the people right above that, etc. — just enough to maintain a differential. That effectively compresses workers at the bottom end of the wage distribution, but it doesn’t move many people into what could be considered “middle class” pay.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “There’s a decreasing increase so that you can maintain equity across the different wage levels,” says Charles Fay, a compensation expert at Rutgers’ School of Management and Labor Relations.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico People with more experience need to make more than people who just got hired, he says, to avoid upsetting employees — which appears to have been the consequence of Wal-Mart’s wage hike, for example.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Liberal activists are hoping, after successful campaigns to pass $15 an hour minimum wages in liberal cities like Seattle and San Francisco, that more dramatic hikes at the bottom will push more workers into the middle.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Of course, the magnitude of the impact could run both ways. While employers might boost everybody up the payscale to keep the wage ladder intact, it’s also possible that they’ll hold a larger number of employees to the new minimum wage in order to keep a handle on labor costs -- or just reduce employment overall.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “With larger minimum wage increases affecting more workers, we might expect employers to be more constrained,” says David Neumark, a professor at the University of California-Irvine whose research has poured the most water on the idea that the minimum wage will raise incomes without adverse employment effects. "Thinking that the minimum wage is a path to growing the middle class is, in my view, completely unfounded."    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Nevertheless, Democratic candidates have big incentives to push for minimum wage hikes this campaign. Doing so is as popular as any economic proposal they might offer, with at least 60 percent support across the board. As the evidence rolls in from the bold experiments currently underway, that support could shift in either direction — but probably not before voters elect the next president.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico

How a higher minimum wage will hurt the District

Regarding the June 8 front-page article “D.C. set to increase minimum wage to $15”: It is disheartening to discover that the people elected to high office in the D.C. government have decided to set prices for hourly labor employed by privately owned businesses. They were elected to tend to safety, streets and schools. They were not elected to run, even partially, businesses they don’t own. Their rationale for arbitrarily specifying a significantly higher minimum wage: It’s too expensive to live in the District, and hourly workers need more money. However, when businesses pass the costs of a higher minimum wage on to consumers in the form of higher prices, the consequence will be that Mayor Muriel E. Browser (D) and the D.C. Council have made it even more expensive to live in the District. ****Jimm Roberts** , Alexandria** **Teenage unemployment is one of the greatest** problems facing the District. The number of youths not in school or working is much higher than the number of unemployed adults, according to recent data. This is much higher than the national average. Raising the minimum wage to $15 will only increase that unemployment rate, and quite substantially. Part-time work is a significant part of a teenager’s education, teaching responsibility, work ethic, teamwork — and positioning him or her for future employment. But at $15 an hour, jobs for teenagers will go away. ****Steve Wilson** , Great Falls**

Could hiking the minimum wage boost the economy?

One of the arguments for raising the minimum wage is that it might provide a bit of stimulus for the economy. After all, the theory goes, low-income workers are far more likely to spend their extra earnings than people further up the income ladder.    *[WSU]: Wayne State University But does this actually happen? In a recent essay at VoxEU, Daniel Aaronson and Eric French of the Chicago Federal Reserve Bank discuss past research on this very question. Their conclusion: Minimum-wage workers _do_ end up __ spending more in response to a hike. But there are also reasons to be skeptical that raising the minimum wage would provide much of a stimulus.    *[WSU]: Wayne State University In one recent paper, Aaronson and French estimated that adult workers at the very bottom spend an extra $700 per quarter, on average, in response to a $1-per-hour hike in the minimum wage. For the most part, workers who receive a raise appear to take on more debt in the short term to buy durable goods like cars and trucks. (They have to pay that debt off later, but in the short term, that's a stimulus.)    *[WSU]: Wayne State University So does that bode well for President Obama's proposal to raise the federal minimum wage from $7.25 per hour to $9 per hour? After all, his proposed raise would affect about 13.4 million Americans by the end of 2015. That should translate into tens of billions of dollars in stimulus, no?    *[WSU]: Wayne State University Well, not so fast, write Aaronson and French. While the theory is plausible, they note, the overall stimulative effects are still unclear. That's because a minimum-wage hike mainly boosts consumer spending in the short term by spurring low-wage workers to borrow more. At least, that's been true in the past. But it might be less true today. Since 2008, banks have tightened their lending standards for low-income Americans and it's become harder to borrow money. What's more, Aaronson and French's research only looked at minimum-wage _adults_. About 23 percent of current minimum-wage workers are teenagers — it's not clear that they'd also start borrowing money to buy cars and trucks at the same rate.    *[WSU]: Wayne State University Another key point: A lot depends on how employers react to a minimum-wage hike. They could start hiring fewer low-wage workers or laying people off. Or they might raise prices. Or they might respond by making their employees work harder. Economists disagree on how, exactly, companies respond to a minimum- wage hike, but if unemployment among low-wage workers does go up, that would blunt the stimulus effects.    *[WSU]: Wayne State University "For these reasons," Aaronson and French write, "we should be somewhat suspicious of claims that the minimum wage will significantly boost the economy." Though they do agree that "putting money into the hands of consumers, especially low-income consumers, leads to predictable increases in spending." Now, extra stimulus is hardly the only argument for raising the minimum wage. There are all sorts of other things to consider, from alleviating poverty to basic economic fairness. But seeing as how the country is still mired in a subpar recovery that can use all the help it can get, the stimulus question is worth exploring. **Further reading:**    *[WSU]: Wayne State University \-- Economists disagree on whether the minimum wage kills jobs. Why?    *[WSU]: Wayne State University \-- Four things to know about Obama's minimum wage increase.    *[WSU]: Wayne State University

No, raising the local minimum wage doesn’t hurt local businesses

_**Jared Bernstein** , a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and the author of “The Reconnection Agenda: Reuniting Growth and Prosperity.” **Ben Spielberg** works on issues related to inequality, economic opportunity and full employment at the Center on Budget and Policy Priorities._ In 1938,  President Franklin D. Roosevelt signed the nation’s first minimum- wage law. It set the wage at $0.25 an hour and covered only a fifth of the workforce. Speaking to the country the night before he signed the bill, Roosevelt told listeners to “not let any calamity-howling executive with an income of $1,000 a day” tell them “that a wage of $11 a week is going to have a disastrous effect on all American industry.” Last August, almost 80 years later, the city council of Birmingham, Ala., voted 7 to 0 (with one abstention) to become the first city in the Deep South to enact a minimum wage above today’s federal level of $7.25. The ordinance planned an increase to $8.50 per hour by July 2016, with a second increase to $10.10 set for July 2017. In response, state lawmakers leapt from “calamity-howling” to obstructionism. The Alabama legislature this past week passed a bill designed to block Birmingham and other cities not just from raising the local wage floor but also from mandating benefits such as paid sick leave. Alabama House Speaker Mike Hubbard (R) insists that the bill isn’t about the policies themselves but about preventing “all sorts of problems” that arise when cities are allowed to set their own minimum wages, presumably because there’s nothing preventing local businesses from relocating to avoid the higher labor costs engendered by an increase. It’s not a crazy concern. When the _national_ minimum wage goes up, no business is at a competitive disadvantage — they all face the same wage floor. It’s fair to wonder whether _sub-national_ minimum wages might encourage businesses to avoid an increase by moving, a question with implications for people all over the country — from Olympia, Wash., to Lexington, Ky., to Bangor, Maine — who are trying to secure a raise. The geographical variation that has sprung up over time, however, has allowed economists to test Hubbard’s claims, and the evidence supports the actions of the Birmingham city council. Partly because of federal inaction, 29 states, plus the District of Columbia, have set minimum wages above the federal level, with floors ranging from $7.50 in Maine and New Mexico to $10 in Massachusetts and California to $10.50 in Washington, D.C. (rising to $11.50 in July). Southern states are the least likely to be in this group. City lawmakers began to adopt higher wage floors at the local level more than a decade ago. Four counties and 19 cities have minimums above their state’s level, including Santa Fe, N.M., ($10.84), San Francisco ($12.25) and SeaTac, Wash. ($15.24). Several more have either proposed or passed higher minimum-wage laws that have yet to take effect. This variation has provided opportunities for something rare in empirical economics: quasi-experimental studies. In one famous paper, economists Alan Krueger and David Card compared fast-food employment in New Jersey, which raised its minimum wage in 1992, with that in Pennsylvania, which did not. “We find no indication that the rise in the minimum wage reduced employment,” they concluded. Are sub-state localities different from states? Another important study gets at this question by looking at county-level data, comparing every contiguous county across state borders where minimum wages differed over the course of 16 years. Instead of “all sorts of problems,” the researchers found “no evidence of job losses for high impact sectors such as restaurants and retail.” Case studies of cities with higher wage floors are less common, but those that have been done support the findings of the state and county research. Studies of San Francisco and Santa Fe, the two cities with the longest track records of higher minimums, reveal “no statistically significant negative effects on employment or hours (including in low-wage industries such as restaurants).” Businesses don’t appear to relocate in response to local minimum-wage increases (at least not enough to create significant job losses) for several reasons. First, restaurants and other retailers, which are disproportionate employers of low-wage labor, must stay near their customers. Second, there are other ways to absorb higher wage costs than by laying off workers. Some evidence, for instance, suggests that companies raise prices, generally by less than 1 percent per every 10 percent increase in the wage. They may also become more efficient. The prospect of higher labor costs can incentivize employers to eliminate waste and to raise performance standards, while at the same time higher wages enhance workers’ motivation. Companies end up with less turnover and shorter vacancy periods when filling job slots. Finally, companies can cut profit margins or top-level salaries to meet higher wage mandates. This last mechanism is one reason such policies get so much pushback from business, and it is particularly germane in an economy where income inequality stands at historically high levels. According to data from the Economic Policy Institute, the real earnings of low-wage workers in Alabama are down 6 percent compared with 1979, while those of the state’s highest-paid workers are up 17 percent. Those low-wage workers have been left behind. And now the Alabama political establishment has blocked action to help them. This is the same political establishment that professes to support “local control” when it finds it convenient. For example, dozens of Alabama state representatives who voted to preempt Birmingham’s minimum-wage ordinance were all for “necessary freedoms to address . . . issues at the local level” when voting on a school reform bill in 2013. The preemption bill’s sponsor, state Rep. David Faulkner, even acknowledged the contradiction: “While we say that we want local control of certain things, I don’t believe the minimum wage is one of those.” No wonder Birmingham’s citizens and city council fought back. The council voted earlier this past week to raise the minimum wage to $10.10 immediately to try to preempt the preemption bill, and Raise Up Alabama, a coalition including workers, unions and clergy members, has formed to fight the state’s decision. If they lose the battle, it won’t be because the facts weren’t on their side. **_outlook@washpost.com_ ** Read more from Outlook and follow our updates on Facebook and Twitter.

Campaign to begin for a $15 minimum wage in D.C.

A coalition of labor and social justice groups launched a ballot campaign Wednesday to raise the minimum wage to $15 an hour in the nation’s capital, an effort that could place the District at the center of a growing national debate over income inequality. The announcement coincided with protests by thousands nationwide for higher wages. Choosing tax day as their backdrop, workers walked off minimum-wage jobs in fast-food restaurants and retail stores to draw attention to a two- year-old rallying cry for a more livable hourly wage. If successful, the D.C. measure would set the minimum wage at more than twice the federal rate — and put the District alongside Seattle and San Francisco in a liberal vanguard on the issue. On Wednesday, supporters pointed to new polling, an expected heavy turnout in a presidential election year and the backing of the financier of last year’s successful measure to legalize marijuana in the city as evidence that the campaign should be taken seriously. But in forcing the issue in 2016 — and in a place with the symbolic importance of Washington — supporters also risked drawing intense opposition from business interests, as well as thrusting Democratic politicians into a no-win choice between unions and employers. The measure could also tee up another showdown between the District and a GOP-controlled Congress. Although some bipartisan support exists on Capitol Hill for raising the minimum wage, a $15-per-hour rate would be viewed by many conservatives as an affront to the federal minimum wage of $7.25. As they tried this year with the marijuana legalization effort, lawmakers could use their vast oversight powers of the federal district to block the ballot measure from taking effect. None of those concerns came up Wednesday, when supporters announced the campaign before a cheering crowd of more than 200 on the steps of the District’s John A. Wilson Building on Pennsylvania Avenue NW. “This fight is not about what Wal-Mart would say it’s about, it’s not about profit shares, it’s not about stock prices and it’s not about bottom lines,” said Delvone Michael, director of D.C. Working Families, a leading organizer. “This fight is about real people. This fight is about who we are as a city and what we become as a nation.” With the federal minimum wage unchanged in six years, 29 states have raised hourly wages above the federal rate; 15 of those have additional increases scheduled in the coming year and a handful of mostly West Coast cities have gone much further. Last year, Seattle and San Francisco became the first major U.S. cities to pledge to phase in a $15-an-hour wage by the end of the decade. The District, New York City and other East Coast cities have imposed a living wage on city contractors, but none of them have seriously weighed $15 an hour for the private sector. The D.C. measure would mirror Seattle in phasing in a flat $15-per-hour minimum wage by 2019. That would be 30 percent higher than the $11.50 rate that the D.C. Council and mayor backed last year. The ballot measure would also for the first time force D.C. restaurants to pay workers a minimum wage plus tips, as in San Francisco. Restaurants in the District are required to pay only $2.77 per hour, as long as tips bring servers up to the equivalent of minimum wage or higher. “We’re talking about righting a historic wrong,” said Meg Fosque, national policy director for the New York-based Restaurant Opportunities Centers United, or ROC, which has joined the D.C. coalition. Fosque said that with 7 in 10 wait staff employees being women and many being of color, the D.C. measure would force candidates and voters to confront the stark issues of income inequality and a gender pay gap. Michael Czin, spokesman for D.C. Mayor Muriel E. Bowser (D), declined to say whether the mayor would endorse the ballot campaign. “As with any grass-roots advocacy effort, we look forward to hearing directly from residents about issues important to them,” he said. The city’s restaurant association and Wal-Mart, which recently opened its first stores in the District, did not return calls or e-mails seeking comment. Harry Wingo, president of the D.C. Chamber of Commerce, said Wednesday that businesses were alarmed by the proposal. “A dramatic wage hike could have a measurable impact on how easy it is to do business in the city,” he said. Wingo noted that the council just approved a three-step increase in the minimum wage last year. That ramp up includes a dollar increase to $10.50 this summer, and another, to $11.50, next summer. “We’re already on track to increase it dramatically. That would be the highest in the region,” he said. Thorn Pozen, a D.C. lawyer who specializes in city election law, said advocates will first face the hurdle of getting the measure on the ballot. City law prohibits citizen-sponsored ballot measures that could adversely impact the District’s budget. The Board of Elections has broadly interpreted that regulation in the past to block measures. But advocates will have someone on their side who succeeded with an initiative last year to legalize marijuana, which also arguably cost the city money. Adam Eidinger, who led the signature-gathering drive on Initiative 71, said he is confident the coalition will get its signatures and qualify for the ballot. Eidinger said that to raise awareness of the issue, he would go on a pot strike next year, refraining from using marijuana until D.C. voters pass the measure. “I want to do something more than just marijuana,” he said, “and this is incredibly important.” Eidinger’s deep-pocketed boss is also on board. David Bronner, the head of hemp-infused Dr. Bronner’s Magic Soaps, met with leaders of the coalition last month. In a recent interview with The Washington Post, Bronner said he would start with a financial investment of $200,000, more than he spent to underwrite the city’s marijuana initiative. “This whole economic recovery has completely left wages behind. We’re talking about hiking the minimum wage. This isn’t a living wage,” Bronner said. “Let’s just say that when Wal-Mart has a holiday food drive for their own employees, come on.” The final plan was based in part on polling the coalition conducted last month that suggested that backers would start with at least 70 percent approval among likely D.C. voters. “I think it’s so popular because middle-class folks are feeling squeezed, too. Everyone understands this is an issue,” said Michael, of D.C. Working Families. Lisa Brown, executive vice president of 1199SEIU, which represents home health-care workers, mobilized dozens to attend Wednesday’s announcement. She said her group would work to make sure voters realize how pervasive low-wage jobs are in the District. “The sad condition of America is that most of these people are not kids, not teenagers. These are grown people, and in our case, ones who take care of some of the neediest people in our society, making minimum wage,” Brown said. “People don’t like to speak about a class warfare, but there is a class warfare. . . . We have to stand up now.” Abigail Hauslohner contributed to this report.

Maine tried to raise its minimum wage. Restaurant workers didn’t want it.

They all hoped to hear one thing: that state legislators had voted to lower their wages. Some cried with relief, Buckwalter said, when the final vote ended at 110 to 37 — overwhelmingly in their favor. The vote, which took place on June 13, marked the conclusion of a months-long political saga that has upended conventional wisdom about the minimum wage. Workers have traditionally supported such increases, which advocates say are critical to lifting millions out of poverty. But in Maine, servers actively campaigned to overturn the results of a November referendum raising servers’ hourly wages from $3.75 in 2016 to $12 by 2024,  saying it would cause customers to tip less and actually reduce their take-home income. The bill was signed into law on June 22 by Republican Gov. Paul LePage, a strident critic of raising the tipped minimum wage. The servers' campaign against increasing the minimum wage was a blow to labor activists, who believed the Maine referendum could kick off similar votes in New York, Massachusetts and D.C. Instead, some servers in those places are already mobilizing against a higher wage. “The next fight is on the national level,” said Buckwalter, who organized other servers to lobby Maine politicians and is now working with waitstaff in Minneapolis and Seattle. “I had lost my faith in government. This restored it, a little.” As Buckwalter and other servers explain it, the labor model in restaurants is unlike that in other industries. Federal labor law allows restaurants to pay their tipped workers less than the local minimum wage, provided that their total earnings, with tips, meet or exceed that minimum. If servers’ earnings fall short of that, employers must pay the difference. In reality,  it’s not clear how often restaurants do that. Furthermore, activists say, workers who make the bulk of their income in tips depend on getting good shifts to make ends meet. That means they avoid any actions that could upset management, including asking for owed money or complaining about customers who harass or bother them. As a result, said Sylvia Allegretto, a labor economist at the University of California, Berkeley, who has studied minimum wage issues, tipped workers tend to have a poverty rate almost twice that of non-tipped workers, and they are more likely to rely on public assistance. “Not everyone is making a lot of money in tips,” Allegretto said, “especially in an industry where you can’t complain about it.” At first, that argument seemed to be persuasive in Maine, where more than 80,000 people work in food service, according to the state department of labor. The average annual wage is slightly over $17,000 a year for restaurant workers, but that includes both tipped servers at full-service restaurants and people who do not make tips, such as back-of-house staff and fast-food workers. A November referendum to raise both the regular and tipped minimum wages — $7.50 and $3.75, respectively — won with 55 percent of the vote. (It required a simple majority.) But almost immediately after the vote was tallied, tipped servers began to complain that the result would hurt their livelihoods. Their fears were twofold, said Sue Vallenza, a 55-year-old bartender at the Pilot House in Kennebunk, Maine, who immediately began lobbying state legislators to overrule the referendum. Many servers feared the higher costs to owners would lead them to raise prices or cut shifts. And at a packed, 10-hour April meeting of the Maine Legislature’s Labor, Commerce, Research and Economic Development Committee, dozens of servers also said some confused customers were already tipping less. Vallenza said she saw her hourly tips drop by more than $2 per hour, from the $20 to $30 per hour she made before.  Whether a higher minimum wage would have reduced Vallenza’s income is less than clear. The problem is that very little good data exists on how much money servers make in tips — meaning that any research about their incomes is doomed to a certain amount of imprecision.   Moreover, all these studies focus on “averages” — and tipped work is anything but. A waitress at a rural diner may make only a few dollars in tips over the course of her shift, while a bartender at a high-end, high-traffic spot could make hundreds. Activists maintain that the public never heard from the rural diner types, because those workers — the ones most in need of a higher minimum wage — are generally not in a position to complain about their earnings or to take time off work. “We do not believe what we see in Maine is representative of the majority of workers,” said Dave Palmer, the managing director of Restaurant Opportunities Centers United, a national group of low-wage restaurant workers that fought for Maine’s referendum. “We have enough of a sense from our members around the country that this is important to them.” In Maine, however, that has not appeared to be the case. In addition to the packed April committee meeting, where opponents of the higher wage greatly outnumbered supporters, more than 5,000 people joined a Facebook group, Restaurant Workers of Maine, dedicated to overturning the referendum by mobilizing servers against it.  That measure passed the Senate by a vote of 23 to 12 on June 7, and the House on June 13. Governor LePage signed the bill into law last week, a spokesman for his office said, though the signing was not publicly announced for several days. It's expected to go into effect in January 2018. “I realize not everyone is in the same boat,” said Dill. “But the ones who called me were saying, ‘I make $20 to $25 per hour, I’ve bought a house with that income, I support my kids — it’s really important that you don’t mess with my tips.’” “I believe in a higher minimum wage,” he added. “But the people who this was impacting didn’t want it.” Palmer, of Restaurant Opportunities Centers United, said his organization has not been deterred by the loss in Maine -- though it did learn “organizing lessons” for upcoming battles in other states. For starters, ROC and other progressive activists will need to mobilize more low-income workers who support a higher tipped income. They will also need to do more to push back against what Palmer describes as industry-sponsored “fear and misinformation.”  There, as in Maine, large numbers of servers have begun to organize against any changes to their pay. “There’s no other industry that gets away with not paying their workers because customers can,” Palmer said. “This is bigger than any one state.”

Raising the minimum wage without raising havoc

In July 2013, hotelier Scott Ostrander stood before the city council in SeaTac, Wash., pleading with the town not to adopt a $15 minimum wage. “I am shaking here tonight because I am going to be forced to lay people off,” he said, according to an account in the Washington State Wire. “I’m going to take away their livelihood. That hurts. It really, really hurts. . . . And what I am going to have to do on Jan. 1 is to eliminate jobs, reduce hours — and as soon as hours are reduced, benefits are reduced.” SeaTac, a community around Seattle-Tacoma International Airport, went ahead with its plan, becoming, on Jan. 1, the first jurisdiction in the nation to set a $15 minimum wage, according to the labor movement. And Ostrander’s hotel, the Cedarbrook Lodge? It went ahead with a $16 million expansion that adds 63 rooms, a spa — and jobs. Ostrander, then Cedarbrook’s general manager, told Seattle’s KIRO-TV as the new wage law took effect that it was proceeding with the expansion “to try to recoup significant expenses that will be incurred as a result” of the higher wage. So the minimum-wage hike forced the hotel to add rooms, revenues and workers. The horror! As fast-food workers demonstrate nationwide for a $15 hourly wage, and congressional Republicans fight off a $10 federal minimum, little SeaTac has something to offer the debate. Its neighbor, Seattle, was the first big city to approve a $15 wage, this spring, but that doesn’t start phasing in until next year. SeaTac did it all at once. And, though there’s nothing definitive, this much is clear: The sky did not fall. “SeaTac is proving trickle-down economics wrong,” says David Rolf, the Service Employees International Union official who helped lead the $15 effort in SeaTac and Seattle, “because when workers prosper, so do communities and businesses.” Those who opposed the $15 wage in SeaTac and Seattle admit there has been no calamity so far. Paul Guppy, vice president for research at the free-market Washington Policy Center, said SeaTac is a “boutique” case because of its size. Airport workers have been left out for now because of a lawsuit, and union workplaces are exempt, so only about 1,600 got raises. Seattle will be a truer test case, Guppy said — but it will be seven years before the $15 wage is fully in place. So far, at least, “you do not see prices up or jobs going away,” he acknowledged. “Seattle is having a construction boom so there’s a feeling of prosperity.” In Seattle last week, I stopped in at the jammed Palace Kitchen, flagship of Seattle restaurateur Tom Douglas, who runs upward of 15 establishments. He warned in April that the $15 wage could “be the most serious threat to our ability to compete,” and he predicted that “we would lose maybe a quarter of the restaurants in town.” Yet Douglas has opened, or announced, five new restaurants this year. Likewise, the International Franchise Association has sued to block implementation of the law, arguing that nobody “in their right mind” would become a franchisee in Seattle. Yet Togo’s sandwiches, a franchise chain, is expanding into Seattle, saying the $15 wage isn’t a deterrent. And a spokesman for Weyerhaeuser, the venerable wood and paper company, says the $15 wage didn’t factor into its decision, announced last month, to move its headquarters and 800 employees to Seattle from outside Tacoma. Such early indications aren’t conclusive, of course. As my colleague Catherine Rampell pointed out, the ultimate effects of the $15 wage in Seattle are unknowable. But the effects are a bit more knowable in SeaTac, because the $15 minimum has already been implemented. Nine months in, there have been rumors of employers cutting back on retirement benefits and paid vacations to offset the wage increases. Cedarbrook Lodge has said it may cut back on benefits such as free meals and free parking. But there is no significant disruption. Before the wage took effect, SeaTac parking-lot operator MasterPark said it might respond by replacing some workers with automation. Instead, MasterPark implemented a 99-cent-per-day “Living Wage Surcharge.” The company’s managing partner told the Seattle Times that layoffs in favor of automation would be “foolish” and that his employees are “happy campers.” SeaTac-based Alaska Airlines, likewise, spent heavily to defeat the minimum wage, saying that it would harm competitiveness. Though the $15 wage for airport workers remains in court, Alaska Airlines, the dominant SeaTac carrier, apparently isn’t worried: Last month, the port authority moved forward with airport construction that could reach nearly $1 billion — to be paid for by the airlines. **_Twitter: @Milbank_ ** _Read more fromDana Milbank’s archive, follow him on Twitter or subscribe to his updates on Facebook._ **Read more:** Harold Meyerson: How to get a raise at McDonald’s Catherine Rampell: Seattle’s bold minimum wage experiment Robert Samuelson: Workers are at the mercy of markets

Minnesota legislature likely to raise minimum wage

Democrats who control the Minnesota House and Senate are likely to try to raise the state’s minimum wage in next year’s legislative session, leading legislators say, the latest of about a  half-dozen efforts to increase it over the last two decades. The state House this year passed a measure to raise the minimum wage to $9.50 by 2015, which would make Minnesota’s one of the highest minimum wages in the nation. But the state Senate passed its own version of the bill increasing the wage to $7.75 an hour, meaning negotiators from the two chambers will need to iron out their differences before a wage hike can go into effect. Senate Democrats say they worry that hiking the minimum wage too much might harm small businesses and dampen the state’s business climate. But state Rep. Ryan Winkler (D), sponsor of the House version, said that “shows the success of the supply-side view of the universe, if Democrats are even repeating the same talking points” as business interests. Currently, Minnesota’s minimum wage stands at $5.25 for employees of companies that gross less than $625,000 in sales annually, and at $6.15 for employees at larger companies. Most workers in Minnesota earn the higher federal minimum wage of $7.25 an hour. Despite its progressive reputation, Minnesota has long had one of the lower minimum wages in the nation. In 1968, the lowest-paid workers earned just 70 cents an hour, a lower rate than any state other than Kentucky, according to the U.S. Department of Labor. The last time the legislature raised the minimum wage, in 2005, the lowest-paid workers went from earning $4.90 an hour to the current $5.25 rate. Winkler said Minnesota has a lower-than-average share of the workforce earning minimum wage, meaning there may not have been the same sense of urgency to increase the low wages. But not for lack of effort. Democrats in the state legislature tried to boost that rate at least five times between 1994 and 2008. Gov. Arne Carlson (R) vetoed a minimum wage hike three times, in 1994, 1996 and 1997. Gov. Tim Pawlenty (R) signed the current rate into law in 2005, but he vetoed another increase in 2008. Now that Democrats hold significant 12- and 11-seat majorities in the state House and Senate, respectively, and with Gov. Mark Dayton (D) in office, the political winds favor a wage increase. “There is momentum clearly on the DFL side of the aisle after these last twenty-plus years to get minimum wage through, but they just haven’t had a governor who’s as receptive as Dayton has been,” said Eric Ostermeier, a political scientist at the University of Minnesota. A part of the reason for the lower-than-average wage is that Minnesota is one of just seven states that do not include a so-called tip credit, Ostermeier said. A tip credit allows employers to pay a lower wage if employees make up the difference in gratuities, like those waitstaff at restaurants might earn. All six of the other states without tip credits are Western states. The legislature will meet for a short session beginning February 25, 2014. By that point, Winkler said, he hopes the legislature takes up the increase in quick order.

The midterm minimum-wage mandate

For the national Democratic Party, there are only two possible outcomes in today’s elections: bad and worse. Even in the best-case scenario, Democrats will barely hang onto a narrow Senate majority that is virtually powerless in the face of Republican obstruction. However, while the headlines tomorrow are likely to be grim, progressives can take heart in tangible policy victories in four states, all solid red in the last election, where voters are set to give the working poor a much-needed raise. Perhaps no issue has been a bigger political winner this year than raising the minimum wage. Indeed, after Seattle raised its minimum wage to a record $15 an hour and fast-food workers nationwide united to demand higher pay, the undeniable resonance of this issue with mostly apathetic midterm voters demonstrates the power of social movements to transcend partisan politics and drive the electoral agenda. Furthermore, it is a clear signal that these elections, whatever their outcome, should not be thought of as a triumph of right-wing politics over progressive Democratic ideas. To the contrary, if Republicans prevail, it will be in spite of their support for right-wing policies. In Alaska, Sen. Mark Begich (D) has been fighting for his political life, but his chances of survival have received a boost from a ballot initiative to increase the state’s minimum wage to $9.75 per hour by 2016. In a recent poll, 61 percent of voters said they support the measure. Enthusiasm is so strong that Begich’s Republican opponent, Dan Sullivan, now publicly supports the initiative despite previously claiming that raising the minimum wage would “shackle Alaska’s potential to grow jobs.” In Arkansas, where Sen. Mark Pryor (D) is in danger of losing his seat to Rep. Tom Cotton (R), a referendum to raise the hourly minimum wage by more than two dollars, to $8.50, is expected to pass overwhelmingly. Give Arkansas A Raise Now, a coalition of faith, community and progressive groups, gathered the signatures needed to get the initiative on the ballot. According to a poll released last week, 69 percent of voters support the pay raise — and that includes Cotton, who opposed increasing the minimum wage as a member of the House. Cotton feebly explained his stance by saying, “I’m going to vote for that initiated act as a citizen.” Republican Senate candidates look as though they are cruising to victory in both Nebraska and South Dakota, and yet it appears that voters in both states will approve a higher minimum wage Tuesday. So will voters in Illinois, where a nonbinding resolution is on the ballot, and Oakland and San Francisco are voting to raise the minimum wage at the city level. Meanwhile, as Timothy Noah points out in Politico, the minimum wage has become a key issue in hotly contested states where it is not on the ballot, forcing Republican candidates to backtrack from their conservative positions. The potency of this issue is not surprising: Polls have found that more than 70 percent of Americans, including majorities of both political parties, support raising the minimum wage. But the success of these initiatives in red states in an election cycle that favors Republicans — who blocked minimum wage bills in the House and the Senate — is important. It shows, once again, that the American people want to see genuinely progressive reforms, not the center- right policies that too frequently dominate the debate. And this is true across a range of issues. They support expanding, not cutting, Social Security. They support tightening, not relaxing, financial regulations. They support raising, not reducing, taxes on the rich. On issue after issue, as has been the case for years, clear majorities of Americans prefer a progressive Democratic agenda. There are many reasons, notwithstanding that reality, for Republican success, from President Obama’s low approval numbers to traditionally low turnout, from widespread fears about Ebola to dissatisfaction with the economy. In fact, while the economy in the past six months has grown at its fastest rate in more than a decade, news that would typically be a boon to the incumbent party, Democrats have been hurt by stagnant wages — which would be higher had Republicans not repeatedly blocked Democratic efforts to help workers. What this election is, progressives will almost certainly conclude, is deeply disheartening. What it is not, however, is a mandate for right-wing policy. This election is proof that, even in an abysmal political climate, movements can shift mountains. So progressives should not think of this election as another Republican “shellacking,” but as the year some of America got a raise. _Read more fromKatrina vanden Heuvel’s archive or follow her on Twitter._ **Read more on this topic:** Dana Milbank: Raising the minimum wage without raising havoc Harold Meyerson: How to get a raise at McDonald’s Catherine Rampell: Seattle’s bold minimum wage experiment Robert Samuelson: Workers are at the mercy of markets

Seattle might try something crazy to let Uber drivers unionize

Seattle may try a novel legal approach to helping Uber drivers to unionize — and potentially other independent contractors too, if the idea holds up in court. Today, a Seattle City Councilmember is expected to announce legislation that would grant all for-hire drivers in the city the right to collectively bargain with the companies they contract with to provide services, which they currently can’t do under federal law, setting up an entirely new system. Over the past few years, taxi drivers have affiliated with unions in cities across the country. But since they’re usually independent contractors, they’re not covered by the law that allows them to negotiate directly with taxi companies, like other private-sector employees can. Their only power is to try to influence how cabs are regulated, which determines their pay and working conditions. So far, that’s worked out alright for taxi drivers, who’ve worked with the Teamsters in Washington State to make their case in Olympia — especially when they’ve banded together with taxi companies to keep rates high. But the state hasn’t seen fit to tightly regulate online platforms like Uber and Lyft, which will sometimes cut their rates in order to compete with each other in different cities. That leads to insecurity for the drivers. “I thought I was going to be having my own car, having my own schedule, making $1000 a week,” says Sereve Pekle, 28, a Seattle taxi driver who switched over to Uber about a year ago. “The reality was completely different.” Pekle says he ended up making less money as more drivers joined Uber’s network. Now, he drives a few hours a week and does sales on the side, which helps him make payments on the Uber-compliant car he bought. With the cost of gas, insurance, and Uber’s cut of the proceeds, "you are not making anything,” he says. “It’s like minimum wage." Pekle has joined Washington’s App-Based Drivers Association, which contracts with the Teamsters to advocate for the drivers’ interests. It’s better than nothing, he thinks, but drivers are still at the whim of Uber’s decisions.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico That’s why Seattle City Councilmember Mike O’Brien concluded that allowing drivers to bargain with the companies themselves might work better than depending on regulation to improve working conditions. “The reality in an industry that’s evolving rapidly is that as a regulatory body we’re not going to keep up,” O’Brien says. “And there’s so much more power in allowing the workers to decide by themselves through collective bargaining, these are the terms under which they want to work.” Here’s how the new system , which will be formally introduced in the Council next week, would work: Drivers would vote on a non-profit organization to serve as their “exclusive driver representative,” which would then negotiate a contract with the company. If the two parties fail to come to an agreement, they have to submit to arbitration. The resulting contract would be enforced through the courts, rather than the National Labor Relations Board, which unions have found to be slow and sometimes ineffective in deterring employers from violating contract terms. If it worked, it could theoretically be extended to cover other kinds of independent contractors, like the port truck drivers who ferry containers from docks to rail yards and warehouses, or other workers on internet platforms like Taskrabbit. But there’s a substantial possibility that the strategy wouldn’t hold up in court. There is some precedent for states allowing groups of workers not covered by the federal National Labor Relations Act to collectively bargain. That’s what happened with public sector workers, for example (which is why some governors, like Wisconsin’s Scott Walker, have been able to take their collective bargaining rights away). Some states have even allowed agricultural workers to join unions, outside federal law. But some legal experts think that because Congress explicitly excluded independent contractors from the NLRA, they might have intended to prevent states from letting them join unions as well. “That pre-empts state or local governments from saying 'no no, they do have rights,’” says Jeffrey Hirsch, a professor at the University of North Carolina School of Law. “I do not see this going anywhere.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico O’Brien’s office and the Teamsters disagree, but say they do expect a legal challenge if the measure passes. In a city that elected a socialist and passed one of the county’s first $15 minimum wages, it may have a shot. Uber said it couldn’t comment on legislation it hadn’t seen yet. Meanwhile, Uber drivers in some states are saying that they shouldn’t be independent contractors at all — and courts have started to agree, which could eventually give Uber drivers the right to organize through normal means. That hasn’t happened in Washington State yet. And if O’Brien and the Teamsters’ strategy works, they might not bother trying to argue that Uber drivers are employees, which could upend traditional labor organizing. “This is a very interesting question because no one is contesting in that context that Uber drivers are independent contractors,” said Harris Freeman, a professor at Western New England School of Law. “Until there’s an attempt to litigate Uber drivers’ status under labor law proper, we’re going to see these alternative forms of worker organizing.”

Portland, Maine rejects a $15 minimum wage. Here’s what that means.

From a distance, the movement for a $15 minimum wage can seem unstoppable. Seattle, San Francisco, Los Angeles — is there any liberal city that _wouldn't_ vote to double the federal wage floor?    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The answer is yes, advocates learned Tuesday. Portland, Maine — the state's largest city, leaning heavily Democratic — voted 58 percent to 42 percent against a ballot measure that would have raised the local minimum wage to $15 by July 2019 for most businesses, and sooner for those with more than 500 employees.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico There are lots of reasons why the measure lost. The business community vastly outspent the mainly Green Party-backed ballot proposition — according to the _Portland Press Herald_, the funding advantage was about 100 to one. The idea also ran into liberal opposition: The director of the business campaign against the wage hike, Toby McGrath, had run President Obama's campaign in the state in 2008 and 2012.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico But mainly, the city council had already voted to raise the minimum to $10.10 by next year; in a city with a median hourly wage of $17.32, $15 seemed like piling on.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico "I think it was too much, it was too far a step for people," says Amy Fried, a political science professor at the University of Maine. "A lot of people felt like it made more sense to do something statewide, then you don’t have a whole situation where Portland is separate from the communities around it." Maine will likely get that chance next fall, when advocates are planning to have a ballot measure that would raise the state's minimum wage to $12 by 2020 — a more gradual increase from $7.50, where it is right now. The Maine Peoples' Alliance says that it's raised $150,000 already for the campaign, which will happen in a presidential election year, when turnout is usually highest. And a statewide poll out last month found 68 percent of respondents supported raising the minimum wage.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico In fact, although the Portland measure failed during Tuesday's election, Maine Peoples' Alliance director Amy Halsted says that her 300 volunteers collected 30,000 signatures at the polls for the $12 statewide measure, giving them enough to officially qualify for the ballot. "People were literally lining up to sign our petition," Halsted says. "So there is certainly a real appetite for raising wages." That campaign is also backed by the Fairness Project, a nationwide group supporting minimum wage ballot initiatives in several states in 2016, whether or not they're trying for the full $15.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Here's another indicator from Tuesday's elections. The city of Tacoma, Wash. was given a choice of raising the minimum wage not at all, to $12 over a couple years, or to $15 immediately. Framed that way, voters picked the middle option. In many cities, $15 an hour is really just an opening bid — advocates know they're going to get bargained down. Without starting high, they wouldn't have gotten even to $12 at all.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The important lesson: People might favor raising wages, but it matters how high.

Obama visits Costco in Pr. George’s to campaign for higher minimum wage

President Obama Wednesday morning urged an increase of the federal minimum wage from the current $7.25 per hour to $10.10 at a Costco in one of Washington’s suburbs, where the local government recently passed legislation to raise the wages. Before an enthusiastic crowd, Obama discussed the new ways to build economic security for the middle class he unveiled Tuesday night to Congress — chiefly he pledged his renewed commitment to raise the hourly rate for all Americans and said he will lead by example starting with raising wages for some federal workers. “I am choosing this to be a year of action, because too many Americans are working harder than ever just to get by much less get ahead,” he told a cheering crowd, saying the wages and incomes of ordinary people have not gone up in over a decade. “Lets make sure hard work pays off,” he said. “It is time to give America a raise.” In his State of the Union address, Obama announced he will sign an executive order that will require new federal contractors to pay federal workers the minimum wage of $10.10 an hour. Support for raising the wages for working families has picked up in the country, with five states increasing their minimum wages since Obama called for an increase in last year’s State of the Union. Maryland has been one of the states pushing most aggressively for a raise in its minimum wage: Gov. Martin O’Malley (D) recently proposed raising the state’s minimum wage to $10.10 an hour. In 2007, Maryland passed a “living wage” law for companies contracting with the state. Numerous local governments have also forged ahead, in some cases passing legislation to dramatically increase the pay of low-wage workers. In the Washington area, the District of Columbia and the county councils of Prince George’s and Montgomery voted last year to reach $11.50 by 2017. Obama on Wednesday said he supported the local efforts, praising those councils for not waiting for Congress or state legislators to act. “If you want to take the initiative to raise your minimum wage laws to help more working Americans . . . then I am going to be there right there by your side,” Obama said. “People outside of Washington are not waiting on Congress, and I am not either.” The Obama administration said that with increased support for higher wages across the country and historically bipartisan support for such policies, it believes Congress could pass legislation. The White House said that a higher national minimum wage would increase morale, reduce turnover and boost productivity. Obama is pushing for passage of a bill sponsored by Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.) that would raise the federal minimum wage to $10.10 and index it to inflation. Congress last increased the national minimum wage seven years ago. “No one who works full time should ever have to raise a family in poverty, ” Obama said in his State of the Union address. “Join the rest of the country. Say yes. Give America a raise.” Obama came to Costco, a business that Obama said is taking the leadership to pay its workers fair wages. Costco has supported previous increases in the minimum wage because, the administration said, “it helps build a strong workforce and profitability over the long run.” Alpha Tajudeen, 33, who is making $13.50 an hour as a stocker at the Costco in Lanham, said earning more than minimum has allowed him to live the American dream and support his wife and two children. “It is challenging for even those of us making more than the minimum. You can’t take care of your family when you earn $7 or $8 an hour,” he said. Prince George’s officials called the president’s effort an opportunity to raise salaries for all working families. “This is a national issue. It is a problem that people are dealing with and trying to live and raise a family and feed their families with something that is unreasonable,” said Andrea Harrison, a member of the Prince George’s County Council who led the effort last year to increase wages. “The bottom line is that the minimum wage needs to be raised for all of these workers who are trying to take care of family.” Later Wednesday, Obama will visit a steel plant in West Mifflin, Pa., near Pittsburgh, where he will pitch his plan to create a new retirement savings program that will allow workers that don’t have retirement programs through their employers to access one through the federal government.

Minnesota’s lowest-wage workers are about to get a big pay raise

Minnesota Democrats have resolved part of a dispute that could lead to a big raise for workers making the minimum wage, although legislators say there is work yet to be done. On Monday, House and Senate negotiators agreed to raise the state’s minimum wage from $6.15 an hour to $9.50 an hour. The House and Gov. Mark Dayton (D) had pushed for the higher wage, while Senate negotiators had wanted a smaller increase, to $7.75 an hour.    *[WSU]: Wayne State University The bill would effectively give most of Minnesota’s lowest-wage workers a pay raise of $2.25 an hour. Currently, Minnesota’s minimum wage stands at $5.25 for employees of companies that gross less than $625,000 in sales annually, and at $6.15 for employees at larger companies. Most workers in Minnesota earn the higher federal minimum wage of $7.25 an hour. About 60,000 Minnesota workers make the minimum wage, according to data compiled by the Bureau of Labor Statistics.    *[WSU]: Wayne State University The House on Monday rejected a Senate proposal that would have raised the minimum wage for employees at big businesses, saying they didn’t want to take a piecemeal approach. But the two chambers still need to resolve disputes over whether the minimum wage should be tied to inflation and the number of years the new rate would take to phase in. Despite its progressive reputation, Minnesota has long had one of the lower minimum wages in the nation. In 1968, the lowest-paid workers earned just 70 cents an hour, a lower rate than any state other than Kentucky, according to the U.S. Department of Labor. The last time the legislature raised the minimum wage, in 2005, the lowest-paid workers went from earning $4.90 an hour to the current $5.25 rate. Part of the reason for the lower-than-average wage is that Minnesota is one of just seven states that do not include a so-called tip credit, Eric Ostermeier, a political scientist at the University of Minnesota, said in September. A tip credit allows employers to pay a lower wage if employees make up the difference in gratuities, like waitstaff at restaurants might earn. All six of the other states without tip credits are Western states.    *[WSU]: Wayne State University Minnesota would become the latest state to hike its minimum wage. In just the past year, blue states like California and New Jersey have voted to increase the wage floor. President Obama made a pay increase one of his priorities in the new year, although Republican control of the House of Representatives could block that initiative.    *[WSU]: Wayne State University

Christie’s candor: Blessing and a curse

New Jersey Gov. Chris Christie’s strengths and weaknesses shown through in reports on his speech at the Chamber of Commerce. It is interesting to see how the same lines may sound different in the context of a presidential campaign.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico “I’m tired of hearing about the minimum wage. I really am. I don’t think there’s a mother or a father sitting around the kitchen table tonight in America saying, ‘You know, honey, if our son or daughter could just make a higher minimum wage, my God, all of our dreams would be realized.'” He is right that there are serious drawbacks to raising the minimum wage. In a report earlier this year, the nonpartisan Congressional Budget Office found: “Increasing the minimum wage would have two principal effects on low- wage workers. Most of them would receive higher pay that would increase their family’s income, and some of those families would see their income rise above the federal poverty threshold. But some jobs for low-wage workers would probably be eliminated, the income of most workers who became jobless would fall substantially, and the share of low-wage workers who were employed would probably fall slightly.” So his point on policy is well taken but the tone arguably is not.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico A bit harsh, perhaps? Maybe distorting the message of minimum-wage supporters by assuming it is the only measure to help working class families? Consider how much better the message would be and how much more empathetic it would sound if he started by explaining, as Bill Gates did, that when unemployment is higher you don’t want to in effect tax wages; you want to lower the cost for hiring new workers. (It is one reason to repeal and replace Obamacare.) He could then explain a better idea that wouldn’t deter hiring and would serve the needs of the working poor, expansion of the Earned Income Tax Credit. As Michael Strain explained, “The EITC is one of the most successful anti- poverty and pro-work programs we have. It functions as an earnings subsidy for low-income households. In order to qualify for the refundable tax credit, you have to have a job, and the size of the credit increases with earnings over a sizeable range. Given its design, it is no surprise that the EITC has increased the number of people who enter the labor force. In addition to drawing people into the workforce by increasing the rewards to working, it is also very well targeted to working-class households — it has lifted millions of people out of poverty.”    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Christie is certainly colorful, but those hearing him for the first time might conclude he doesn’t care about the working poor, or that he only wants them to aspire to greatness, not a solid middle-class life. The remarks are easily turned against him. The difficulty is that scripting Christie isn’t easy, nor is he at his best when reading from a text. With the funny, irreverent and candid Christie you are also going to get remarks that are off-putting and damaging. He often says that in New Jersey his blustery language is well understood and taken as straight talk. Candidates aspiring to the presidency, however, need to talk to multiple audiences and reach voters wary of them. The self-discipline needed is extraordinary. Should Christie run, he may be one of the most entertaining and provocative candidates. But he may also be the most vulnerable to self-inflicted wounds. In the gotcha environment of Twitter and YouTube, that can be deadly.

How a $15 minimum wage went from ‘extreme’ to enacted

What once was considered “pie in the sky” is slowly becoming law. In New York, state legislators just agreed to raise the state minimum wage to $15 an hour, with the full effect beginning in New York City by December 2018. California just passed a compromise raising the minimum wage to $15 an hour by 2022. New Jersey and the District are planning to move similar laws. After New York and California, nearly 1 in 5 (18 percent) in the U.S. workforce will be on the path to $15 an hour. How did this reform go from being scorned as “extreme” to being enacted? Consensus politicians don’t champion it. Pundits and chattering heads tend to ignore it. Many liberal economists deride it as too radical. The idea moved only because workers and allies organized and demanded the change. Three years ago, fast-food workers walked off the job in what began the “fight for $15 and a union.” With the federal government as the largest low-wage employer, federal contract workers demonstrated repeatedly outside the Pentagon, Congress and the White House, demanding executive action under the banner of a “Good Jobs Nation.” Progressive politicians added their voices. In Seattle, Kshama Sawant, an engineer and economist running under the banner of Socialist Alternative party, won a seat on the city council in 2013. She made a $15 minimum wage a centerpiece of her campaign and pushed it when in office. The Service Employees International Union, one of America’s largest unions; business leaders such as Nick Hanauer; and political leaders such as Seattle Mayor Ed Murray helped build the coalition needed to get it done. Now wages in Seattle are headed to $15. And in SeaTac, the airport district that passed a $15 minimum wage in a referendum, the wage is in effect now. In New York, insurgent mayoral candidate Bill de Blasio made raising the minimum wage central to his campaign. He and the Working Families Party joined with striking low-wage workers, labor and community groups, and city council members. Zephyr Teachout’s surprisingly strong challenge to Gov. Andrew Cuomo (D) put pressure on him to act. At the national level, Sen. Bernie Sanders (I-Vt.) and Congressional Progressive Caucus co-chairs Rep. Keith Ellison (D-Minn.) and Rep. Raúl M. Grijalva (D-Ariz.) joined with demonstrating contract workers. The CPC lobbied President Obama to use his executive power to raise wages for federal contract workers. The president responded with three historic executive orders, lifting the minimum wage for contract workers to $10.10, cracking down on wage theft and other workplace violations, and extending paid leave to contract employees. Obstacles remain. Today, 42 percent of American workers earn less than $15 an hour. And the right to a union has been trampled by relentless and at times lawless corporate resistance. The Republican leadership in Congress refuses even to allow a vote on raising the national minimum wage that, at $7.25 an hour, means full-time workers can’t even raise their families out of poverty. But now Christine Owens, executive director of the National Employment Law Project, says that “the Fight for $15 launched by underpaid workers has changed the nation’s economic trajectory, beginning to reverse decades of wage inequality.” Contrary to the business lobby, an analysis by economists at the University of California at Berkeley shows that New York’s increases will not lead to job losses. The higher wages will generate billions in new consumer spending; the increased sales will offset the costs to businesses. In Seattle, the unemployment rate reached an eight-year low after the initial increases in the minimum wage last year. This movement continues to build. The Fight for $15 and Good Jobs Nation initiatives will ratchet up their walkouts and demonstrations this month. On Monday, an interfaith coalition of religious leaders issued a call for “moral action on the economy.” They will press presidential candidates to pledge to “issue an executive order to make sure taxpayer dollars reward ‘model employers’ that pay a living wage of at least $15 an hour, provide decent benefits and allow workers to organize without retaliation.” As Jim Winkler, general secretary of the National Council of Churches, summarized: “This election is fundamentally about whether the next president is willing to take transformative executive action to close the gap between the wealthy and workers.” Sanders has made $15 and a union a centerpiece of his campaign. He has urged Obama to take executive action and surely will sign the pledge. Hillary Clinton supports raising the minimum wage to $12.50, allowing cities to go higher. Her position on the pledge is unknown. The Republican candidates — Sen. Ted Cruz (R-Tex.), Donald Trump and Ohio Gov. John Kasich — oppose raising the minimum wage and would likely repeal Obama’s executive orders on low-wage contract workers if elected. With inequality reaching record extremes, childhood poverty the worst in the industrial world and more Americans struggling simply to stay afloat, this country is desperately in need of bold reform. Yet bold ideas are repeatedly mocked as unrealistic and blocked by entrenched interests and conservative politicians. What the activists and low-wage workers have shown with their fight for $15 is that the changes we need will come if people organize and force them. Many commentators deride Sanders’s call for a political revolution, but that may be the most realistic idea of them all. _Read more fromKatrina vanden Heuvel’s archive or follow her on Twitter._ **Read more about this topic:** Charles Lane: The risks of California’s minimum-wage increase Jared Bernstein and Ben Spielberg: No, raising the local minimum wage doesn’t hurt local businesses Dana Milbank: Raising the minimum wage without raising havoc Letters to the Editor: Middle ground on the minimum wage

The best indication of what a federal $12 minimum wage could mean for poor places comes from Puerto Rico

Over the past few years, demands for a minimum wage increase have jumped from around $9 an hour -- which seemed ambitious at the time -- to $15 an hour. Change has been rapid: The $15 minimum will eventually be law in a couple of cities, and it’s headed for the ballot box in a few more. And on the federal level, legislators have bumped their proposal from the White House’s initial bid of $10.10 an hour to $12 an hour nationwide.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico That might work fine in places like New York City, where labor costs tend to be higher and consumers have a greater willingness to pay. But what about the lower-wage places, where the Senate Democrats’ plan would mean a hike of 65 percent? Couldn’t that hurt minimum-wage workers, if the higher cost of labor prompts firms to hire fewer people, or drives firms out of business?    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico _[New York Governor Cuomo wants to raise wages for fast food workers, all by himself]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Possibly. Certainly there is some wage level above which companies have to cut payrolls, and there's lots of research on both sides to fuel arguments about how much. But evidence from one historical example -- Puerto Rico -- suggests the effects might not be as bad as one might expect.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Here’s the scenario. Back in 1977, Puerto Rico began to increase its minimum wages -- which had been set industry by industry at levels below the federal floor -- to match the mainland, over a period of several years. In 1976, the minimum was $2.03 in Puerto Rico and $2.30 in the United States. By 1987, it had reached $3.35 in both places, making Puerto Rico’s minimum wage a much higher percentage of its average wage than it was in the U.S. proper. Several years later, Alida Castillo-Freeman of the National Bureau of Economic Research and Richard Freeman of Harvard University took a look at what happened during that time. The results were clear: Wages had risen and clustered around the new $3.35 minimum. Employment had dropped by about nine percent, compared to what it would have been if Puerto Rico’s minimum wage-to- average wage ratio had stayed the same as it was on the mainland. Most of those jobs came from low-paying manufacturing companies that might have been on the margin anyway.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico In retrospect, Freeman says, the island lost nowhere near as many jobs as he expected. “What we found was that there were a couple industries that really got bopped -- places that were already going downhill,” he says, reasoning that the lost jobs, while painful for the affected employees, might have been inevitable. “If you’re so unproductive that you can’t pay a little bit more, than maybe you don’t belong in a modern economy.” Why weren’t the employment effects greater? Earlier research, summarized in this paper by Alan Kreuger, had found that many firms responded by increasing their productivity and simply making less in what were already outsized profits, which allowed them to retain workers. In Puerto Rico’s case, an unemployment crisis was averted as thousands of lower-skilled people emigrated to cities with greater opportunities, such as Miami and New York.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Based on that experience, Freeman thinks a few things might happen if the federal minimum goes up to $12. First, some companies might find ways to work around it, either by having their employees work off the clock or by turning them into independent contractors. That’s not ideal, but it at least allows people to keep collecting some paycheck. “There are many ways that firms and workers will make sure that people don’t lose their jobs,” Freeman says. “If you say that 90 percent of the people get higher wages, and that’s what you want to have happen, and then 10 percent find ways to wiggle around so they keep their jobs, that’s a pretty good outcome.” Second, if jobs do disappear, Freeman figures that people will move to areas of greater opportunity. “Minimum-wage workers tend to be young people, so they’re reasonably mobile,” he says. “Mississippi is the lowest-wage state in the country. If it tips you to move to Georgia, which has higher wages, that’s a reasonable response.” Opponents of the minimum wage increase, like the restaurant industry-backed Employment Policies Institute, argue that higher minimum wages can adversely affect employment in cities, too. An EPI report released in April found that some small businesses in Oakland, Calif., anticipated they might have to close, or at least lay people off, when the minimum wage there goes up to $12.25 per hour.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico And in retrospect, although the island faces many different challenges, it doesn't appear that the higher minimum wage did Puerto Rico's economy much good. Productivity has lagged, and unemployment is still high, particularly among youth, leading the New York Fed to recommend in 2012 that a subminimum wage be instituted for people under the age of 25 -- and potentially for the whole population.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico But overall, Freeman argues, the evidence from minimum wage hikes in other places -- such as Britain and Australia -- shows only moderate effects on employment, if any, because governments tend to give businesses time to adjust. “Put a zero after your wage and mine, and we know that the employer’s going to get rid of us,” Freeman says. “But they never seem to push the minimum really into that dangerous territory. Twelve dollars in three years is not going to incredibly shake up Mississippi.”

Should fast-food workers be paid more?

The Sept. 7 editorial “Better than a Big Mac attack” said, “People who work in low-wage service industries do an often thankless job for modest pay.” I have a modest suggestion: Why don’t The Post’s editorial writers — of whatever age, with children or not — trade their jobs for ones at a local fast-food restaurant? Then they could report whether the pay is “modest” or, much more likely, minimal and impossible to live on in this metropolitan area. ****David M. Zwerdling** , Silver Spring** ● The editorial “Better than a Big Mac attack” made two important points: Franchisees are small businesses that operate separately from the corporations with which they are affiliated. The National Labor Relations Board is simply wrong to suggest otherwise. Yet the NLRB did just that, overruling decades of federal and state legal precedent to declare McDonald’s Corp. to be a joint employer with its franchisees. The entry-level work these businesses offer provides many young people the start they need to pursue their career goals. I should know: My first job in college was at a Burger King. Second, the International Franchise Association is a strong proponent of the earned-income tax credit, a bipartisan solution that would do more to help low-wage workers across the country than would mandating an unreasonable $15-an-hour minimum wage. A minimum wage of that size could reduce the hours of many workers and put a lot of these small, family-owned franchisees out of business. ****Steve Caldeira** , Washington** The writer is president and chief executive of the International Franchise Association.

Wal-Mart’s concerns on D.C. wage bill elicit little sympathy

It was difficult to muster sympathy for Wal-Mart’s “bait-and-switch” claims about wages [“Wal-Mart: D.C. wage bill a bait-and-switch tactic,” Metro, July 7] after reading the heartbreaking front-page story that same day about hungry children in America [“Driving away hunger ”]. At the District’s minimum wage of $8.25, someone working full-time earns a mere $17,160 — $2,370 less than the federal poverty line for a family of three, but too much to be eligible for food stamps. Paying $12.50 an hour — which the bill passed Wednesday by the D.C. Council would require of Wal-Mart and other big retailers — is an improvement, although taxpayers still would be subsidizing Wal-Mart wages through free school lunches for many sales associates’ children. I am happy to help make sure kids have enough to eat so they can learn, but I’d rather see wages sufficient to meet families’ basic food needs. With its corporate clout, Wal-Mart could have a positive transformative impact; for example, it rightly touts making healthy and organic food more affordable and conserving and using alternative energy for its stores. Rather than fighting decent wages for its employees, Wal-Mart should lead in creating a strong middle class of retail workers. This would mean fewer hungry children — and more people who can afford to patronize retailers such as Wal-Mart. ****Tracy Velázquez** , Mount Rainier**

This graph is the best argument for raising the minimum wage

This is the chart that should begin all discussions of the minimum wage, and whether we need to increase it: *[WSU]: Wayne State University  That red line is corporate profits since 1970. The blue line is labor's share of income. As you can see, corporate profits are skyrocketing while labor's share of those profits is falling. This is a big part of the reason that median wages are stagnating even as the economy grows and the wealthy become ever more fabulously rich. The problem is severe enough that it earned a mention at the beginning of President Obama's 2013 State of the Union address. "We gather here knowing that there are millions of Americans whose hard work and dedication have not yet been rewarded," he said. "Our economy is adding jobs – but too many people still can’t find full-time employment. Corporate profits have rocketed to all-time highs – but for more than a decade, wages and incomes have barely budged." There are many explanations for why labor's share of income is falling. Globalization, automation, skills-based technological change and the decline of unions all play a part. But in the end, all these explanations end up saying the same thing: Most workers have less power to negotiate raises than they did a generation ago. And that's truest for those who making the least money and holding the fewest skills. Economists argue over whether a small increase in the minimum wage would have no effect on employment or a slightly negative one. There's no doubt that, at some margin, making low-wage workers more expensive will lead small businesses to hire fewer of them, and lead big businesses to automate more tasks (think about the computerized checkout services that have begun popping up at CVS).    *[WSU]: Wayne State University But what no one argues is that increasing the minimum wage leads, in most cases, to a higher minimum wage. If we lift the minimum wage to $9 per hour, as President Obama has proposed, then most of the workers getting paid $7.25 per hour now now will see their pay increase to $9 per hour. So these workers, who have essentially no power to bargain for higher wages, will get higher wages. That, at its base, is the case for a minimum wage hike. There are better ways to accomplish this same goal, most of which run through the tax code. The Obama administration's first attempt was the Making Work Pay tax cut, which provided a refundable tax credit of up to $400 for working individuals and up to $800 for married taxpayers. But Republicans refused to renew it in 2011. So then the Obama administration moved to the payroll tax cut, which cuts payroll taxes by two percentage points in 2011 and 2012. But Republicans -- and some Democrats -- refused to extend it into 2013. They also expanded a variety of refundable tax credits for low-income workers -- notably the Earned Income Tax Credit and the Child Tax Credit -- in the stimulus, and those have survived. These policies have the advantage of benefiting more than just minimum or near-minimum wage workers, and they spread their costs broadly rather than concentrating them on businesses, some of which can't afford them. In theory, an efficient way to respond to the problem of falling labor income would be to tax corporations and richer Americans and then use the money for something like the Making Work Pay tax cut. But Republicans have killed those ideas. And so the Obama administration is pushing a higher minimum wage, which isn't quite as good policy, but is much better politics. Now, Obama's minimum wage increase might not pass the House. But if it doesn't, then Democrats have a hugely popular cudgel with which to beat Republicans in the 2014 midterm elections. That's basically what happened in the 2006 elections, and the strategy was so effective for Democrats that George W. Bush subsequently signed a minimum wage increase into law.    *[WSU]: Wayne State University There's a lesson in here for Republicans. When they kill the Obama administration's more technocratic proposals but don't propose an alternative way to solve the underlying problem, they end up getting backed into a corner by his more populist proposals. That basically happened in the tax debate, where they refused to cut a big deal that included tax reform and so got stuck with a tax increase that simply raised rates. It's likely to happen here, too.

The Insiders: Republicans can’t avoid the minimum wage debate

President Obama and the Democrats are making an election year issue out of the minimum wage. Obviously, they want to avoid talking about Obamacare specifically and the Obama economy generally. Some in the mainstream media are promoting Obama’s futile plan to raise the minimum wage to $10.10, and sometimes Republicans take the bait and talk too much.  Without a clear plan of their own, Republicans are just the party of “no.” The American Action Forum, led by former Congressional Budget Office director Douglas Holtz-Eakin, analyzed minimum wage data and found that if a new federal minimum wage of $9 an hour were imposed, it would cost us almost 1.4 million new jobs. The higher minimum wage would result in a decrease in the net job growth rate across the country. That’s consistent with common sense. If you raise the price of labor, especially while our economy is so fragile, there will be less labor.    *[WSU]: Wayne State University And a survey released on March 19 by Express Employment Professionals, one of the nation’s largest privately held staffing firm, showcases an inconvenient truth for Democrats: raising the minimum wage to $10.10 an hour would “result in layoffs, reduced hiring, and higher prices at a large chunk of American companies.” The survey found that among employers who currently pay their employees the minimum wage, 38 percent said they would have to fire some employees, 54 percent said they would curtail new hiring and 65 percent said they would raise prices on the goods and services they offer to cover the extra costs. There is no doubt that raising the minimum wage would diminish the number of jobs in the near-term. Obviously, we should not do anything that reduces the number of jobs. Period.    *[WSU]: Wayne State University In politics, as we know, a bumper sticker beats an essay. In this case, the Democrats have the bumper sticker. And while the Republican essay is compelling and honest, it’s still an essay. There is nothing Republicans can do to avoid some negative fallout for opposing a minimum wage hike, but a little Republican creativity would be useful right now. Republicans can’t just say we want higher paying jobs as a way to avoid talking about minimum wage jobs. Without a plan of their own, Republicans are just trying to bluff, hoping no one notices. Well, it’s too late for that. The other side is scoring points. Follow Ed on Twitter: **@EdRogersDC**    *[WSU]: Wayne State University

Push for minimum wage hike led by localities, Democrats

States and municipalities across the country are leading a localized push to raise the minimum wage, driven largely by Democrats, who see an opening to appeal to working-class Americans at a time of growing inequity. Efforts in Congress to raise the national minimum wage above $7.25 an hour have stalled. But numerous local governments — including those of Montgomery and Prince George’s counties, and the District — are forging ahead, in some cases voting to dramatically increase the pay of low-wage workers. The efforts, while supported by many unions, threaten to create a patchwork of wage rates that could mean workers in some areas will be entitled to vastly less than those working similar jobs nearby. The campaigns reach from coast to coast. “Congress can’t do anything right now, and even if they could, they wouldn’t even come close to the level that various cities and states around the country are looking at,” said Phil Mendelson, the Democratic chairman of the D.C. Council, which is expected to take an initial vote Tuesday setting the city’s minimum wage at $11.50 an hour by 2016. The county councils in Montgomery and Prince George’s voted this week to reach $11.50 — higher than any rate in effect in the United States — by 2017. The coordinated effort emerged in recent months after local officials decided they could not wait for Congress or state legislators. As minimum wage fights have gone increasingly local, Democrats have led the charge, working to define themselves as the party of blue-collar workers while casting Republicans as defenders of corporations and big business. Backing minimum wage increases, even in otherwise conservative states, sharpens that definition, they believe. Minimum wage increases have broad public support, and income inequality issues have touched a nerve in many places. “When the pope starts criticizing trickle-down economics, you know the gulf between rich and poor has become too much to ignore,” said Tom Lindenfeld, a Democratic consultant with close ties to labor unions. President Obama has called for an increase in the national rate, mentioning it in his most recent State of the Union address and recently signing on to a proposal from congressional Democrats to set a $10.10 hourly rate. But congressional Republicans have opposed any increase, saying it would hurt employers and curtail job growth. “When you raise the price of employment, guess what happens? You get less of it,” House Speaker John A. Boehner (R-Ohio) said in February. Many states long ago set their rates slightly above the federal minimum, and a handful of cities — notably San Francisco and Santa Fe, N.M. — joined them. The District has set its minimum wage at $1 above the federal standard since 1993. But the recent push is distinguished by the number of jurisdictions involved and the magnitude of the increases proposed. This year, a group of unions, led by the Service Employees International Union, spurred efforts to raise the minimum wage to $15 an hour for airline and restaurant employees at Seattle-Tacoma International Airport, just south of Seattle. Voters in 2012 decided to increase the minimum wage in Albuquerque to $8.50, and have yearly cost-of-living bumps, beginning this year. The California legislature, which is dominated by Democrats, passed a law over Republican objections this year to raise the minimum wage to $10 an hour by 2016. Massachusetts lawmakers also are considering a $10 wage. New Jersey voters endorsed an $8.25 wage this month, even while voting overwhelmingly to reelect Republican Gov. Chris Christie, who opposed it. Even in red states, Democrats see opportunity in minimum wage increases. Democrats are deep in the minority in legislatures in South Dakota and Arkansas, for instance. But both states allow for statewide referendums, and Democrats there are gathering signatures to put minimum wage increases on the ballot in 2014. Just as Republicans used initiatives banning same-sex marriage as a way to boost turnout in 2004, Democratic candidates may find that sharing a ballot with a minimum wage measure helps draw the contrast between the two parties. Democratic-held Senate seats in South Dakota and Arkansas are vulnerable in 2014, while Democratic incumbents in Arizona, including Reps. Ron Barber, Ann Kirkpatrick and Kyrsten Sinema, will face tough reelection fights. “Having minimum wage measures on the ballot in certain states next year may prove electorally beneficial to Democrats,” said Carolyn Fiddler, a Democratic strategist at the Atlas Project. “It certainly seems to poll well generally.” Nonetheless, proposals to raise the minimum wage are hotly contested. Supporters and opponents of the $15 proposal in SeaTac, Wash., spent more than $2 million on advertising, mailings and polling — in a city with just 12,106 registered voters. The measure passed by 77 votes out of just more than 6,000 cast, meaning supporters and opponents spent about $327 per vote. In the D.C. area, the dynamics have had less to do with party politicking and more to do with the region’s rising cost of living and local frustrations over the unwillingness of congressional or state lawmakers to take action. In late August, Montgomery County Council member Marc Elrich found himself on the Mall listening to the anniversary speeches of the 1963 March on Washington. Speakers repeated how a $2 minimum wage won then by civil rights leaders had since eroded to a fraction of its buying power. “That stuff makes you think,” Elrich (D-At Large) said. “The idea that we were in a better place 50 years ago — that’s pretty pathetic.” In this year’s legislative session, Maryland lawmakers took no action on bills that would have raised the state’s minimum wage to $10 an hour by mid-2015, in part because of staunch resistance from retailers and other employers. At the council’s first meeting after Labor Day, Elrich proposed a new county minimum of $12 an hour. The next week, a months-long battle in the District over whether to force Wal-Mart and a few other large retailers to pay their workers a super-minimum wage of $12.50 came to a head. Mayor Vincent C. Gray (D) had vetoed a Mendelson-authored measure to require the higher wage. Mendelson couldn’t find the votes for an override, and supporters left city hall vowing to fight for a higher minimum wage for all workers instead. Soon after the defeat, Elrich approached Mendelson at the North Capitol Street offices of the Metropolitan Washington Council of Governments. Mendelson said he would be interested in aiming for a regional increase in the minimum wage. It was a conversation Elrich had already had with Prince George’s County Council Chairman Andrea Harrison (D-Springdale) at a government conference in August. “Mr. Elrich said, ‘Hey, I am working on a piece. Do you think you might be interested?’ ” Harrison recalled. “I said, ‘I am working on a piece, too,’ . . . and the rest is history.” Virginia jurisdictions were not included in the effort, the organizers said, because counties and cities in the commonwealth don’t have the power to set minimum wages. If they did, the effort probably would have crossed the Potomac River. “Personally, if I had the power to do it, I’d propose it in a New York minute,” said J. Walter Tejada (D), chairman of the Arlington County Board. In late September, Elrich, Mendelson and Harrison held a conference call from their offices. Elrich started the negotiation at $12. Mendelson called in thinking he would be comfortable with $11.25. The numbers were arbitrary but not unjustifiable: Had the minimum wage from 1968 kept pace with inflation, it would be about $10.77. And a “living wage” in the region — sufficient to cover basic costs of living — is more than $13, according to several academic studies. They settled on $11.50 — a rate that, if in effect today, would be the nation’s highest. “At the end, it was ‘go forth. . . and get the votes,’ ” Elrich said. At its highest purchasing power, in the 1960s and 1970s, the nation’s minimum wage approached a rate of 50 percent of the country’s median wage. That’s a ratio economists say is still important in assessing its ability to keep low-income residents out of poverty. Under the proposals passed by Montgomery and Prince George’s and nearing approval in the District, the ratio would be about 40 percent by the time the $11.50 hourly rate is reached in 2017. But barring action from Congress and the state legislatures, those jurisdictions will be surrounded by areas guaranteeing substantially lower wages — as much as 30 percent less, if the current federal minimum holds. The effects of having such vastly different rates in the same metropolitan area are largely unknown. Stephen Fuller, an economist who directs the Center for Regional Analysis at the George Mason University School of Public Policy, said the raise will have an effect in terms of lost jobs, lost income, higher prices and lost sales to adjacent areas. While a higher minimum wage will be good for the workers, he said, “it cannot be thought of as being cost free.” But Pete Davis, an analyst with the Center for Study of Responsive Law, a think tank headed by liberal activist Ralph Nader, said a lack of uniformity is a poor reason not to take action. “The D.C. area has one of the highest costs of living in the nation, so it makes sense that they are going to lead the charge on fighting back on inequality,” he said. Elrich said he is also fine with pricey urban areas having different minimum wages than more rural ones, where the cost of living is lower. “What’s right for Montgomery or the D.C. region as a whole may not be what’s right for another jurisdiction,” he said. The political ramifications of the Washington jurisdictions’ effort are likely to be clearer than the economic ones. A local D.C. economy already under intense scrutiny for its ties to the federal government will be even more so as partisan observers try to determine whether every job lost or gained relates to some of the nation’s highest minimum-wage requirements. And Davis said he sees the effort as the start of something bigger, especially for urban areas: “When a region like D.C., Prince George’s and Montgomery can do it, and they are successful, people are going to start to realize you can do it in New York and Chicago and Dallas and across the country.”

Let D.C. vote on a living wage

_Delvone Michael is executive director of DC Working Families. Gaby Madriz is executive director of the Restaurant Opportunities Center of DC._ Nobody should be surprised that the D.C. Chamber of Commerce wants to block District residents from voting to raise the minimum wage. The last thing the big corporations behind the chamber want is for voters to have more say than chief executives. They know that when voters decide, we will put supporting our families and building a thriving District first. It is common sense that you cannot meet your family’s basic needs on the minimum wage in the District. The minimum wage in the District will be $11.50 next year. The median monthly rent for a one-bedroom apartment is $2,000, which is the amount a minimum-wage worker earns in a month. In fact, the wage needed for a full-time worker to support himself or herself in the District — food, rent, transportation, health care and other necessities — is $14.84 an hour. Add the cost of raising even one child, and the hourly living wage in the District is $30.42. Today many of our neighbors get paid far less than that, struggling from paycheck to paycheck to make ends meet. Who are these neighbors of ours who get paid so little for their work that they are often near or below the poverty level, even when they work full time? They are mostly women, many with children, and overwhelmingly people of color. The ballot initiative that the Chamber of Commerce is trying to prevent us from voting on is far from radical. It would raise the District’s minimum wage gradually, not reaching $15 an hour until 2020. It would also phase out the tipped-worker penalty until there was one fair minimum wage for all workers. But all that is still too much for the Chamber of Commerce, which wants to preserve the District’s sad distinction of having highest economic inequality in the nation. Today, the average income of the richest 1 percent of District residents is 32 times greater than the average income of everyone else. In case you think that the chamber is made up of mom-and-pop businesses, take a look at its board of directors. The chair, Carl Hairston, works for M&T; Bank, which paid its principal executive, Robert G. Wilmers, $4.2 million last year, a 15 percent increase from the previous year. These big corporations and their lobbyists are used to muscling elected officials to get their way. This is why our organizations filed a ballot initiative so that D.C. residents could vote directly to raise the minimum wage. This is the last thing that the Chamber of Commerce wants, which is why it went to court to block this initiative from coming to the ballot. The chamber’s case is made of flimsy legal arguments. For example, it argues that because the ballot wording says that the minimum wage would be raised “gradually,” the wording is biased. Of course, as the minimum wage would be raised to $15 over the next four to eight years, “gradually” is an accurate description. If the chamber loses in court, you can bet it will throw millions of dollars into campaign ads to try to defeat the initiative. The chamber probably will say that raising the minimum wage would kill jobs. That’s just not true. Labor policy experts have concluded that raising the minimum wage has modest or no effects on employment, hours or other labor market outcomes. When we raise the minimum wage so that families can cover the basics, their spending will boost the District’s economy and help our communities thrive. Families will be able to pay rent and shop in their neighborhoods. In Seattle, which is leading the way to a $15 minimum wage, including for tipped workers, the restaurant industry is booming, according to the Puget Sound Business Journal. The paper reported that “some of the chefs who are opening restaurants at a dizzying pace are the ones who had issued dire warnings of empty tables and shuttered rooms as a result of the wage law.” The question in the District, as it is across the country, is whether our government can be made to work for everyday Americans, not just the wealthy and big corporations. D.C. voters should get a chance next year to prove that we can build an economy that supports working families. **Read more about this issue:** George F. Will: Raise the minimum wage? It’s iffy. E.J. Dionne Jr.: Raising the minimum wage is the right idea Mirta Gutierrez: Raising the minimum wage would hurt entry-level workers Betsey Stevenson: Five myths about the minimum wage

Nobel-winner Edmund Phelps on his plan to help low-wage workers — without raising the minimum wage

__    *[WSU]: Wayne State University _He was awarded the 2006 Nobel Prize in economics for his work on how to determine a nation's optimal savings level, on the foundations of macroeconomics, and on the relationship between inflation and unemployment in both the short and long term. He is generally credited with introducing the idea of a "natural rate" of unemployment._    *[WSU]: Wayne State University _In the 1990s, he worked extensively on issues of economic inclusion, culminating in a proposal for work subsidies for low-wage workers in his 1997 book "_Rewarding Work _." His most recent book,"_Mass Flourishing _,"is about how grass-roots innovation drives drives economic growth, employment and job satisfaction, and why such innovation may be declining of late. We talked on the phone Thursday afternoon; a lightly edited transcript follows._    *[WSU]: Wayne State University **There have been dozens of studies on the employment effects of the minimum wage at this point. What's your take on that literature?**    *[WSU]: Wayne State University It's one of the subjects that the economics profession has really never achieved a consensus on. Statistical studies are all over the lot about the pluses and minuses of raising the minimum wage. There must be a level so high that, if you raised the minimum wage still higher, total employment would contract. Everyone recognizes that you can only go so far. But for now there's disagreement. The advantage of work subsidies is that they would bid up the wages of low-wage people, and that same bidding for more low-wage people in the labor market would pull up their employment too. With the minimum wage, of course, the suspicion is that raising it will cut back on the number of low-wage workers that companies feel they can afford. **In preferring work subsidies over minimum wage increases, are you subscribing to the theory that the minimum wage creates a price floor on labor, lowers demand for it and thus creates a shortage of low-wage job opportunities?**    *[WSU]: Wayne State University I don't think it would lead to an outright shortage, but in most cases it would reduce hiring in the aggregate, and it would tend to shift hiring away from the lowest paid workers to the not-so-low-paid workers, because if you're going to have to pay more anyway, you will choose to hire the more promising candidates. If you raised the minimum wage to $10.10 [which Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Ca.) proposed and the White House supports], then some companies that might have otherwise gone on paying the minimum of $7.25 an hour would now say, "Well, if I have to pay $10.10, I'm going to hire high school graduates rather than dropouts."    *[WSU]: Wayne State University The intuition of most economists is that both effects are going to be present. Companies are going to skimp a bit on labor in the aggregate when the minimum wage goes up, and they will tend to substitute more skilled workers for less skilled workers for the reasons I just outlined. **Do you think the increased labor cost to employers gets passed on to consumers in the form of higher prices?**    *[WSU]: Wayne State University We are talking about a smallish percentage of workers that'd be affected [EPI puts the number at 16.4 percent for Harkin-Miller -- Dylan]. So it is not nearly as consequential for business costs as some of the big hikes in the price of oil that we've seen over the decades. So I would suppose that costs would rise, sooner or later, depending on what else is happening, by one or two percent. But I don't think that is going to ignite expectations of inflation and require the Fed to go into a tight money posture.    *[WSU]: Wayne State University **Moving on to your proposal: a subsidy to employers who hire low-wage workers. A lot of people hear that and think, "Well, doesn't the Earned Income Tax Credit do that already?"** **Your proposal differs in that the money goes straight to the employer rather than the employee, but what is the advantage of it over the EITC? Or over the minimum wage, for that matter?**    *[WSU]: Wayne State University The main point is that raising the minimum wage seems to all economists to, at the very least, fail to _raise_ employment, and we'd all like to see better inclusion of low-skilled workers into good, paying jobs. They need jobs that will support them financially, make them better experienced and make their lives a little more meaningful.    *[WSU]: Wayne State University The low-wage employment subsidy idea is that the government would pay companies a subsidy for every low-wage person on their books. In the execution of that idea, the government must subsidize not only the employment of $7-an- hour workers, but also $8-an-hour and $9-an-hour workers, and so forth. You want to pull up the wage rates at the bottom, but you don't want the result that the people who were _at_ the bottom are now earning more than people who were _next to_ the bottom. You have to pull up the lowest wage more than the next lowest, and that less than the wage after that.    *[WSU]: Wayne State University You ask about EITC. That has historically been heavily oriented toward mothers of dependent children, and although there have been some steps to broaden it, it remains a program that does not do much for those without dependent children, such as most single men. My thinking has always been that the worst problem we have with regard to lack of inclusion is the terribly low labor force participation rates and terribly high unemployment rates of young men, especially young men in ethnic minority groups, and in particular young black men. You have little representation of young black men in the business sector, so you have children growing up in disadvantaged neighborhoods who don't hear discussions at the dinner table about what goes on at in business. It's almost as if we have two nations. I've long felt that this is an untenable situation, and should be remedied in a reasonably cost-effective way, and I think that graduated low-wage subsidies are just that sort of system. **One common criticism of this kind of system is that it can create perverse incentives. People might be less likely to stay in high school if they don't need it to make a decent living, for instance, and businesses might be more reluctant to give folks in this position raises if raises brings with them a lower subsidy. How big a problem do you think that is?**    *[WSU]: Wayne State University The problem that some young people might not stay in high school to get a degree is a real one. Prior to the subsidies, getting a high school diploma meant the difference between, say, $10-an-hour and $7-an-hour, and afterwards it won't. So there's a loss of incentives for young people to stay in high school for the extra training, the enhanced literacy and so forth. If we institute a low-wage employment subsidy program, that's one thing we want to watch, its effects on the demand for years of education. But just because there is theoretically such an effect doesn't mean it's of a large enough magnitude to be a a crucial point against having such a program at all. Perhaps the low-wage employment subsidy scheme would also reduce the incentive of a worker to move up the ladder, to get promoted to a higher position, and you don't want that. You want them to pull themselves up. But I'm not sure that the ambition to do better, to climb higher is just a matter of that wage differential. There could be all sorts of reasons to want to get promotions. It's natural that people compete to go up the ladder, to express their determination and exercise their ambition. There might be greater security up to a point, it's maybe more pleasant to be able to give orders than to be always on the receiving end of orders, it's nicer to have more responsibility, to have the scope to show what you can do, and so forth. There are a hundred factors behind the aspiration to do better. **So I could imagine someone looking at the job market today and thinking, "Even if we subsidize low-wage employers, it'll still be tough for low-wage workers and they may not have enough bargaining power for this to really help them." Do you agree with that, that this is mainly helpful during upturns but downturns are a different story?**    *[WSU]: Wayne State University I certainly do not think it will help only in upturns. I think it would help in downturns as well, when companies are thinking, "Oh my gosh, maybe we have to take an ax to parts of our workforce, because it looks like this slump is going to go on for a while." In that case, the fact that every low-wage worker is not just a producer, but also someone who brings subsidy money with him or her to the company, helps to encourage the employer to hang on to them, at least for a while, to see whether things stabilize and maybe start turning around. To take an extreme case, suppose the subsidies were constructed so that companies don't have to pay for the lowest-wage people, and the government simply paid them, or paid the company to pay them. In that scenario, if that was sufficient for the companies to attract such workers, I would expect that the firms would downsize very little in the event of a downturn, because those lowest-wage workers weren't costing it anything but floor space. It does have a buffering effect. **You sometimes hear people arguing that we need _both_ the minimum wage and wage subsidies, that they serve as complements. What do you make of that argument?**    *[WSU]: Wayne State University I disagree because under wage subsidies, we can expect that that wage will be bid up by companies competing more strenuously for each low wage worker because each low wage worker will bring a subsidy that goes to the company. The market competition passes along some of the subsidy to the workers. So if we think that $11 is the right minimum wage, maybe the wage subsidy program could easily deliver $11 as an effective minimum, and there'd be no need for a statutory minimum wage law. If there are companies already paying everybody $11, they wouldn't be affected by a minimum wage law all about $10. But if there is a high minimum wage, it will be very important to enact work subsidies of low-wage employment. **I think the argument is more that, if you implemented wage subsidies now, much of that would be captured by the employer rather than passed along in the form of a raise to workers. If I'm an employer paying $11 an hour now and the government steps in and says, "We'll pay $7 out of that if you'd like," I'll just pay out $4 and pocket the savings.**    *[WSU]: Wayne State University That could be the immediate impact. The immediate impact might well be that the company is delighted to find that wage rates are still low, and now it has the subsidies coming in. But someone in the company will say, "Why don't we hire some more of these low wage people? We passed them up before because we hesitated to pay them $7 an hour, but now we can pay them $9 while reducing our own cost to, say, $6 thanks to the $3 subsidy." Then a bidding war breaks out among employers, all of whom would like to step up somewhat their use of low-wage labor, because it's now a bargain, taking into account the subsidy. So that's got to buoy up both employment and wages. **Would the work subsidies make the difference between low employment and high?**    *[WSU]: Wayne State University Since "Rewarding Work," which I stand by, I've been struck by the utter principlelessness that we find in Washington, where any appeal to state aid is on an even basis with other appeals, and it's just a matter of what society feels like doing. Some people get their houses blown away, that's a shame, so let's give them a few tens of billions of dollars. It doesn't matter that they happen to be in the upper half of the population.    *[WSU]: Wayne State University That's a corporatist idea, that everybody's entitled to social support. It wasn't that way in Mussolini's time, but there was an anti-market feeling, that everyone is entitled to be protected from the market. That has metastasized into what I call the "new corporatism," where it isn't just a few anointed social groups like factory labor and certain communities that are deserving, but everyone is deserving of support by the state. The message is, "Regrettably, we can't help everybody, but we'll get to you." It creates this fantastic business in your town of lobbying and patronage. There are just so many claimants for so many things. Businesses now think they'll make more money if they get one or two government contracts, so it's better to orient themselves toward pursuing government contracts. That will earn more profit over the long haul, especially if you allow for risk. That will earn more profit than if we devote ourselves to some five year project that may or may not deliver an innovation. So you get this orientation of businesses away from creation of things and visions and all that, and into lobbying, rent-seeking, etc. And once a large established corporation has the special interest money it wants, then it's that much harder for newcomers to break into the industry with a new innovation, and to the extent that new entrants have been neutralized, then any innovation becomes unnecessary, because they don't have to worry about innovations from outsiders. They've built a fortress around themselves, and so they don't need to innovate anymore. I think, in a nutshell, that's a significant part of the story of what's happened in the American economy. I think American society gradually begins going to pot starting in the 1960s, continuing in the 1970s, and the best evidence of that is that there was a tremendous slowdown of total-factor productivity (TFP) growth, and we haven't pulled out of that yet. If we pulled out a decade later, it might just be one of those things that lasts a while and then we're back in business, but that hasn't happened. We've had steadily slow productivity growth, with the exception of the years of the Internet build-out, which petered out abruptly in 2004.

Raising D.C.’s tipped minimum wage would hurt, not help, servers

_Michael Saltsman is research director at the Employment Policies Institute, which receives support from restaurants, foundations and individuals._ D.C. Mayor Muriel E. Bowser (D) proposed raising the minimum wage for tipped employees by 171 percent. That sounds extreme — because it is. Bowser’s announcement came less than a month after her State of the District speech calling for a 30 percent increase in the regular minimum wage, to $15 from $11.50. Servers in the District also would be subject to a new wage requirement, but the minimum wage for tipped employees would increase to $7.50 from $2.77. D.C. law permits employers to pay a lower base wage and count tip income toward the minimum-wage requirement. In reality, those take-home wages for tipped employees are many times larger than the required hourly minimum. In testimony before the D.C. Council, restaurateurs in the District reported that their employees earned anywhere from $20 to $35 an hour when tips were included. (If a server sells $100 in food, he typically gets an 18 percent to 20 percent tip; the restaurant may make 5 percent profit on a $100 meal.) Nearly 28,000 people are employed at full-service restaurants in the District — more than 5 percent of the D.C. private-sector workforce. A walk along 14th Street NW any night of the week will tell you that the District is undergoing a restaurant boom. Bowser’s proposal to dramatically increase the tipped minimum wage isn’t just unnecessary; it also threatens this vibrant foodie culture. It’s easy to forget during a bustling Friday night, but the average profit margin at a full-service restaurant is in the low single digits. Labor costs make up about one-third of restaurant expenses. Nearly tripling the hourly wage for tipped employees would force dramatic changes in service, food prices and employment levels. Need proof? Look no further than New York, which Bowser’s spokesman cited as the model for her proposal. The mayor may want to look a little closer at how that model is working out for Empire State restaurants. Restaurants have cut shifts, laid off employees or closed altogether because of a tipped wage set at the same level proposed for the District. Betty’s Diner in Buffalo, Longway’s Diner in Watertown and Peppermill Restaurant in Rochester all reduced their hours to cut down on unsustainable labor costs associated with the new tipped wage. McGirk’s Irish Pub in Binghamton and P.J. Clarke’s in New York City eliminated some positions to try to compensate for these costs. Piggy Pat’s BBQ in New Hartford laid off six employees, eliminated employee health-care insurance, cut hours of operation, reduced menu options, doubled up duties and sent people home early because of the new tipped wage. These anecdotes are backed up by hard evidence. A study published in 2014 in the Southern Economic Journal analyzing two decades of government data found that a higher tipped minimum wage reduced employment in full-service restaurants — for tipped employees in particular. That doesn’t necessarily mean that restaurants closed; instead, they may have scheduled fewer employees per shift or opted for table-side ordering systems that reduce the need for servers. In a new twist, some restaurants in high-cost markets have experimented with a no-tipping approach as a means to fund higher pay requirements for their staff. Predictably, waiters who find themselves earning far less per hour when tips are eliminated aren’t happy: Some San Francisco-area restaurants have seen 60 to 70 percent of their staff leave after implementing a tip-free approach. In a recent Washington City Paper article, a server predicted a “mass exodus of skilled waitstaff” if D.C. restaurants did the same. Rather than listening to activist groups, Bowser should take a tip from employees, employers and, as the D.C. restaurant boom shows, customers themselves: Leave the tipped wage alone. **Read more about this issue:** Robert J. Samuelson: Minimum-wage madness Charles Lane: The risks of California’s minimum-wage madness Mirta Gutierrez: A $15 minimum wage would hurt entry-level workers

Who actually makes the minimum wage in America today

If the federal government ever raises the minimum wage, it wouldn't help everyone -- immediately, at least. Although raising the floor reverberates throughout the wage scale, the vast majority of workers already make more than $7.25 an hour, either because they live in states that have set their own baseline higher or because their employer doesn't want to be known as sticking to rock bottom. But there were still almost 3 million people who made the minimum wage or less in the United States in 2014. And,thanks to the Bureau of Labor Statistics, we know who they mostly are: disproportionately young, female, part-time, Southern restaurant workers without a high school degree.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Here are a few headline stats: Interestingly, although wealth inequality has widened along racial lines, it doesn't really show up at the very bottom of the income ladder: About four percent of both white and black hourly workers made the minimum wage or less, compared with three percent of Hispanics and Asians.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico

A middle path on increasing the minimum wage

NOT SURPRISINGLY, the nonpartisan analysts at the Congressional Budget Office have found that President Obama’s proposal to raise the minimum wage would have costs as well as benefits. Increasing the minimum from its current level, $7.25 an hour, to $10.10 by the second half of 2016, as the president advocates, would lift 900,000 individuals out of poverty — while reducing total employment by about 500,000 workers. This finding is perfectly consistent with both economic theory and the empirical literature. Equally unsurprisingly, Democrats and Republicans immediately turned the CBO report into more fodder for their long-running dispute over increasing the minimum wage — which the former tout as a panacea for economic inequality and the latter demonize as a job-killer. The prospect of an election-year legislative compromise on this issue, never bright, now seems fainter than ever. That’s doubly unfortunate, since the CBO report is best read as a gentle argument in favor of a middle path on the minimum wage. Of course, the necessary precondition for seeing it in those terms is the ability to recognize that both sides in the age-old minimum-wage debate have valid points: A decent society would neither price entry-level workers out of jobs nor leave them completely without leverage in the labor market. The real issue is not so much whether to have a minimum wage, or even how much it should be, but how best to set it. Our current procedure goes something like this: At irregular intervals, Washington politicians, and their allied lobbyists, stage a huge battle over arbitrarily selected numbers. A much better procedure would consist of three steps: First, link the minimum wage to an appropriate benchmark. We have suggested a minimum wage high enough to pay a full-time worker an average income equal to two-thirds of the poverty line for a family of four, or roughly the average level of the past 55 years. At present that would be $8 an hour — a 75-cent raise over the minimum. Second, provide for automatic, modest annual increases, based on an appropriate inflation factor. Third, augment the earned-income tax credit, a cash supplement to wages that works like a negative income tax. It has been gradually replacing the federal minimum wage as a poverty-fighter in recent years but remains too small for certain workers, such as childless single adults. Our proposal has all the poverty-fighting advantages that proponents of a $10.10 minimum claim for their idea — with the sole exception that it raises the minimum less rapidly than they would like. It also has additional, compensating advantages: It would remove future minimum wage increases from political contention and it would have less dampening effect on employment. We’d say it’s more politically feasible, too, if we had any confidence that either Republicans or Democrats were actually interested in a practical solution. **Read more about this topic:** George F. Will: Raise the minimum wage? It’s iffy. Betsey Stevenson: Five myths about the minimum wage Robert J. Samuelson: The minimum-wage muddle Eugene Robinson: Democrats can win on raising the minimum wage The Post’s View: Minimum wage is on the way up in and around D.C.

A $15 minimum wage would harm D.C. businesses and workers, Chamber of Commerce study says

Thanks to local legislation passed in 2014, the District’s minimum wage jumped to $10.50 Wednesday morning, and next year, it will increase another dollar to $11.50.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico All the while, labor activists have been campaigning to land an initiative on the ballot that would raise the District’s minimum wage to $15 per hour by 2019 — a movement that’s been gaining momentum throughout the country.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico But the D.C. Chamber of Commerce released a survey of local businesses owners Tuesday saying that if the minimum wage were to jump to $15 an hour, half of businesses would need to cut back on existing employees’ hours. A majority of businesses, the survey concluded, would not be able to employ additional workers. _[Campaign to begin for a $15 minimum wage]_    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The Chamber surveyed hundreds of its small and large member businesses to collect information on the potential impact of a $15 minimum wage in the city.  In 2013, the minimum wage was $8.25 in the District and, if it jumps to $15, the chamber argues, that would mean almost doubling wage costs for businesses in a relatively short amount of time. It would also put D.C.’s minimum wage at more than twice the current federal rate. “This could make the difference in their operations and essentially in keeping the lights on,” said Harry Wingo, president and chief executive officer of the D.C. Chamber of Commerce, in a news release. “Increasing the cost of doing business in the District is the biggest threat to local companies, right on par with the recession, and will result in the loss of jobs.” San Francisco, Seattle and most recently, Los Angeles all have passed $15 minimum wages.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Advocates say the current minimum wage is not a livable wage, and raising the floor of wages is an important step in confronting income inequality.

Tommy Wells plans to spend a week living on minimum wage

Tommy Wells, as a D.C. Council member, makes a yearly salary of $130,510. Starting tomorrow, he is pledging to live — or at least eat and travel — on considerably less. Wells said his decision to hold his food and transportation costs to the level of a minimum-wage worker for a week is meant to draw attention to the District’s high cost of living and the council’s move last week to approve a considerable increase in its minimum wage over the next three years. But it also stands to burnish the mayoral candidate‘s progressive bona fides as he tries to position himself as the D.C. version of Bill de Blasio, the unabashed liberal who will become New York City mayor on Jan. 1.    *[WSU]: Wayne State University Asked Tuesday if other politicos have engaged in the “Live the Wage” exercise previously, Wells said, “I’m pretty sure de Blasio and some other folks have done it.”    *[WSU]: Wayne State University His decision, he quickly added, was not a conscious attempt to imitate de Blasio, though Wells did say his campaign was researching how much de Blasio had lived on. “My background is having worked around social services for my whole career,” he said. “This is not a new foray.” De Blasio took the challenge in July, pledging to live on $92 a week. Wells could have a little more scratch to play with, considering that D.C.’s minimum wage is $1 higher than the federal minimum of $7.25 prevailing in New York. But not much more. Wells said Tuesday afternoon that he has not calculated just how much he’ll be living on but that it will involve taking the wages of a 40-hour minimum-wage workweek and subtracting at least 30 percent for housing and living expenses. (At least: “The average person spends a lot more than 30 percent on housing these days,” he said.)    *[WSU]: Wayne State University The biggest question mark, Wells said, is transportation — his schedule is full of campaign and council events, and he is pledging to rely on public transportation, walking and biking to get around. While he said he’ll accept rides from friends or neighbors, his campaign staff will not be chauffeuring him. “I’ll buy a SmarTrip card for $10 and go from there,” he said. This particular act of performative politics is new to D.C., but other city officials — including Mayor Vincent C. Gray, council member Mary M. Cheh (D-Ward 3) and congressional delegate Eleanor Holmes Norton (D) — have taken part in a “food stamp challenge” wherein they live on the roughly $20 to $30 received in weekly food benefits.    *[WSU]: Wayne State University But other gestures have thus far gone unreplicated in D.C. For instance: Cory Booker, the New Jersey senator and former Newark mayor, famously lived in the Brick Towers housing project for years.    *[WSU]: Wayne State University Wells said wasn’t sure yet about a follow-up: “We’re going to start here, but there are some other groups I think will be in need of attention,” he said.

Robert J. Samuelson: The minimum-wage muddle

We’re now engaged in another divisive debate over the minimum wage and its offspring, the “living wage.” We’ve been here before, because both sides seem to have strong arguments. On the one hand, raising wages by government fiat seems a job-killer. Economics 101 teaches us that if you increase the price of something — including labor — people will buy less of it. On the other hand, guaranteeing that full-time work protects against poverty seems a decent standard. The present federal minimum ($7.25 an hour) doesn’t do this. At 40 hours a week, it amounts to $15,080 a year; that’s above the government’s poverty-line for a single person ($11,702 in 2011) but not for a family of four ($22,811). To make sense of this debate, you need to know three things. First, whatever else it is, a higher mandated wage is not a plausible solution for poverty — at least not as defined by government. The reason: Most of the poor don’t have jobs, and even those who do typically don’t work full time. In 2011, 46.2 million people were below the government’s poverty line. Of these, 26.5 million were of working age (18 to 64), but fewer than 40 percent worked at all and only 10 percent had full-time, year-round jobs. Second, all low-wage workers aren’t poor. “There’s a big distinction between low-wage workers and low-income families,” says economist David Neumark of the University of California at Irvine. About a third of minimum-wage workers, he says, come from families in the top half of the income distribution, with annual incomes of $50,000 or more. These may be teens or spouses who are a family’s second or third earner. This means that gains from mandated wage increases don’t go exclusively to the poor and low-skilled. Third, economists disagree whether past increases in the minimum wage destroyed jobs. One group of studies finds little or no effect; these studies usually compare employment levels in states that have raised their minimums above the federal level with nearby states that haven’t changed their minimums. Without job loss, it’s a no-brainer to raise the minimum, argue Sylvia Allegretto and Steven Pitts in a paper for the Economic Policy Institute, a left-leaning think tank. Adjusted for inflation, it’s now 23 percent lower than in 1968, they say. By contrast, Neumark and others find that minimum-wage increases have reduced employment. Every 10 percent increase may cut teen jobs by 1.5 percent; a 30 percent wage increase implies job reductions of almost 5 percent. A higher minimum involves a “trade-off of higher wages for some against job losses for others,” says Neumark. Where do I come out? Somewhere in the muddled middle. The federal minimum has more political symbolism than economic significance. Originally instituted in 1938 at 25 cents an hour, the rate has been lifted intermittently, usually after a period when inflation and an expanding economy have eroded its importance. It’s the modest nature of the increases that explains their small impact on jobs, which is what all the studies show. In 2012, the minimum affected only 4.7 percent of hourly paid workers, down from 6.7 percent in 1997. The Obama administration proposes raising the minimum in stages to $9 by the end of 2015. That’s 24 percent since the last increase in 2009. I doubt its impact, for good or ill, would be large. Some workers might lose jobs, but the greater purchasing power of those who received wage increases might more than offset the losses of the added unemployed. But large, abrupt increases in the minimum would almost certainly kill lots of jobs. That’s the danger of “living wage” proposals, which often involve steep increases. Striking fast-food workers want $15 an hour. In Washington, the D.C. Council has passed legislation (the mayor must still approve or veto it) that would require Wal-Mart to pay $12.50 an hour, roughly 50 percent higher than the city’s existing minimum, $8.25. Wal-Mart has plans for five stores in the city, with three under construction. If the law takes effect, the company says it will cancel the others. Here’s the larger issue. In the short run, even sizable increases in mandated wages may have moderate effects on employment, because businesses won’t abandon their investments in existing operations. But companies that think themselves condemned to losses or meager profits won’t expand. Not surprisingly, a study by two economists at Texas A&M; finds that the minimum wage’s biggest adverse effects are on future job growth, not current employment. To this defect must be added another: An excessively high minimum will attract more skilled workers, denying the less skilled an entry point to work and on-the-job training. The minimum wage seems a shortcut to social justice. It isn’t. _Read more fromRobert Samuelson’s archive._ **Read more about this topic:** Matt Miller: Time for ‘Big Mac’ statesmanship Harold Meyerson: A new look for labor Harold Meyerson: How low wages hurt the economy Robert J. Samuelson: Cautious capitalists

From the U.S. Chamber’s Tom Donohue: What income inequality?

Thomas J. Donohue, the longtime chief executive of the U.S. Chamber of Commerce, sounded like a skeptic on income inequality at his annual State of American Business address in Washington on Wednesday. When a reporter observed at a news conference after his 36-minute talk that he seemed to be calling the whole concept of income inequality into question, he responded with a non sequitur, applauding what the Obama administration is doing in pushing trade agreements. “ _If_ there is inequality,’’ Donohue said, the White House is addressing it all wrong. “The view across the street,” at 1600 Pennsylvania Ave., “is that more government programs will create more jobs.’’ Which is not, of course, the view at 1615 H St. NW, where Donohue has been opposing regulation and battling environmentalists since 1997. Martin Regalia, the chamber’s chief economist, said income inequality is “not as bad as many of the statistics show — you have to use the right numbers.” This week, everyone from President Obama to the Republicans who want to succeed him is talking about income inequality, on the 50th anniversary of President Lyndon Johnson’s famous promise to lift up America’s underclass by declaring a war on poverty. “You may have noticed that there has been a lot of focus recently on the subject of inequality,’’ Donohue said in his talk. The gap between the wealthiest and the rest of us is wider than at any point since the 1920s, with a family in the top 1 percent having a net worth 288 times as high as the typical family. President Obama has called that disparity “the defining focus of our time.’’ But that focus is mistaken, in the view of the chamber, which routinely opposes any increase in the federal minimum wage of $7.25 an hour. Donohue also predicted Wednesday that Congress will probably extend unemployment benefits again but added that he doesn’t foresee an extension helping the jobless much. Donohue is, however, concerned about the lack of economic mobility that’s inextricably linked to the income inequality he wouldn’t recognize: “It seems to me,’’ he said in his talk, “that what we should really be talking about is equality of opportunity. How do we give everyone a fair shot at the American Dream?” His proposed solutions to the opportunity gap — education reform and more training — are not completely unlike Obama’s, although the president wanted to offer more directed aid to living in poverty. “I’m telling you right now,’’ Donohue said, that if the country doesn’t vastly improve public education, 30 percent of Americans will be left behind. As many as 1.5 million manufacturing jobs could be filled right away, he said, if Americans had the skills to fill them. “Oh, and by the way, that costs money,’’ he said of education and training, which he would propose to boost by cutting from entitlement programs. How? By increasing Medicare co-pays, for one thing. And, he added, “I hate to say this, because they always say get rid of waste, fraud and abuse, but there is a lot of that.” Donohue is also a strong proponent of immigration reform, because American business needs both low-skilled and high-skilled workers not currently in the labor pool. His push for that reform isn’t shared by many of those congressional Republicans he’s pledging to keep in office when he says that a priority is to “protect and expand a pro-business majority in the House and advance our position in the Senate.” But that sentiment on reform is changing, he said, in part thanks to his lobbying efforts on immigration and partnerships with unions. He pronounced himself “encouraged with a lot of the noise and soundings out of the House,” he said. “I think we’re going to get this done” this year. LBJ’s war on poverty created the safety net as we know it — Medicare and Medicaid, Head Start and food stamps. Then, and ever since, the business lobby has been warning against these programs. Donohue’s predecessor in the job, Richard L. Lesher, lost the support of many members over his advocacy for the Clinton administration’s proposed plan to overhaul our health-care system. But Donohue has opposed Obamacare from the start, and on Wednesday repeated that “many firms are stopping new hires and cutting workers’ hours because of the law’s mandates,’’ though data so far don’t bear that out. He did add, however, that the law isn’t going anywhere, and that critics should stop trying to kill it and start trying to cure it: “We’re not going to get rid of the bill, so we’re going to have to devise ways to make it work.” In his mid-70s, Donohue isn’t going anywhere, either; he told the New York Times last summer that “if you see me in a box with flowers around it, I’m only thinking about retiring.” Meanwhile, he still has the same impressive head of white hair he arrived with. His approach hasn’t changed noticeably, either.

This large D.C. suburb will consider a $15-an-hour minimum wage

Montgomery County will join the District of Columbia in considering legislation to raise its minimum wage to $15 an hour by 2020, placing the Washington region in the middle of a national debate over the possible economic impact of such a hike. County Council member Marc Elrich (D-At Large), the architect of an unusual 2013 collaboration by Montgomery, the District and Prince George’s County to gradually raise the minimum to $11.50, said he expects to introduce the $15-an-hour bill as early as next week. Elrich said that while the 2013 increase was an important step, there is now wider recognition that the minimum must be closer to a “living wage.” “The amount of money a person earns should be sufficient to live on,” Elrich said. “I think there’s a broader understanding that you need to tackle wages to deal with poverty.” Prince George’s County Council Chairman Derrick Leon Davis (D-Mitchellville) said it is unlikely that his jurisdiction will join the latest effort. The county, he said, is currently facing too many economic uncertainties to justify another increase. Moreover, nonprofit providers of services to the developmentally disabled are already saying that without more help from the government, they will be unable to keep pace with the current schedule of wage increases. “Our realities are catching up with us right now,” Davis said. “At this time, it would be imprudent to take another step in that direction.” The measures in Montgomery and the District come as the “Fight for 15” movement, backed by labor unions and Democratic presidential contender Sen. Bernie Sanders, is gaining momentum. On Monday, California Gov. Jerry Brown (D) announced a deal with state lawmakers to raise the minimum wage to $15 an hour by 2022. Los Angeles, San Francisco and Seattle have also passed laws within the past two years, each with slightly different timetables, to reach a $15 hourly wage. Last year, more than 130,000 fast-food workers in New York won an increase to $15 that will take effect in New York City at the end of 2018 and statewide in 2021. The federal minimum wage of $7.25 an hour has not changed since 2009. The debate over whether to boost the minimum wage centers on an issue economists have argued over for years: Does a rising wage lead to job loss, ultimately hurting low-income workers more than it helps? D.C. Mayor Muriel E. Bowser (D) announced her proposal for a $15 minimum wage at her State of the District address March 22. She said the hike was part of a “bold” plan to make good on her campaign promise to create “pathways to the middle class” for D.C. residents. Montgomery’s minimum wage is set to rise from $9.55 to $10.75 an hour in July and to $11.50 a year later. A full-time minimum-wage worker earning $15 per hour would have an annual income of about $30,000 — still quite low in a county where the household median is just under $100,000. Heather Dlhopolsky, chair of the Greater Bethesda-Chevy Chase Chamber of Commerce, said a rising minimum wage would add to a growing burden on employers, particularly small businesses, which includes increasing pressure to provide paid family leave and new insurance requirements that are part of the Affordable Care Act. “I think it all goes to the notion of Montgomery not being business-friendly,” Dlhopolsky said. Elrich said he did not expect difficulty is assembling a majority to pass his bill, but Council President Nancy Floreen (D-At Large) was more guarded. “We’re in a tough situation,” she said. “We’re trying to create a positive business climate but also create a place where people can get paid a decent salary. We’re certainly not going to rush into it.”

Phil Mendelson: The time is right to raise D.C.’s minimum wage

Washington has one of the highest costs of living in the country. Yet more than a half-dozen jurisdictions require a higher minimum wage, including San Francisco ($10.55 an hour) and Santa Fe ($10.51). But before the District acts to raise the minimum, The Post’s editorial board would have us wait and study the issue. To what end? In the Nov. 11 editorial “Better pay,” The Post offered three supposedly unanswered questions: How many D.C. residents would be affected? At what level might a higher minimum wage harm the working poor by rendering them ineligible for certain public assistance? And at what point could an increase discourage employers from locating in the District? The first question is irrelevant. But the answer is about 7,000. So, are we to leave the minimum wage at $8.25 an hour ($17,160 a year) — a poverty wage — because two-thirds of the District’s minimum-wage earners live elsewhere? We already know the answer to the second question, too. Looking at more than a half-dozen benefit programs targeting the poor (including child care and housing assistance programs, Temporary Assistance for Needy Families and the earned-income tax credit), it is clear that increasing the minimum wage to $10.50, based on income requirements at this time, would have no effect on eligibility or benefits except for some reduction in food stamps for a two-person household. However, that analysis raises another question: Should the government, in effect, subsidize private-sector employers that pay poverty wages? That’s what happens when a full-time minimum-wage job leaves a family below the federal poverty guidelines. A 2009 report by the Ohio Department of Job and Family Services, for instance, found that more than 15,000 Wal-Mart workers were on Medicaid while more than 12,000 received food stamps. As for discouraging employers from locating in the District, a recent analysis commissioned by the pro-business D.C. Chamber of Commerce found “little solid research on the effects of a higher minimum wage on business creation or relocation decisions.” But we know this much: According to data provided by the Office of the Chief Financial Officer, more than two-thirds of minimum- wage jobs are in the food preparation-serving sector; the low-wage restaurants are more likely to be McDonald’s than the Prime Rib; McDonald’s is not a destination restaurant to which diners will travel far; thus, not too many minimum-wage jobs will relocate out of the District. The effect of the minimum wage on employment is one of the most studied concepts in economics; we do not need another study to show that the minimum wage does not increase unemployment. A “living wage” is based on the cost of housing, food, transportation, taxes, etc. According to the MIT “Living Wage Calculator,” the living wage for the District is $13.67 an hour. Yet the District’s current minimum wage is $8.25. Raising the minimum wage is the right thing to do. Waiting is not. **Read more about this topic:** The Post’s View: Minimum wage on the way up in the District and nearby counties Ed Lazere and Elissa Silverman: Time to give D.C. workers a raise

How to get a raise at McDonald’s

Today, fast-food workers in more than 100 cities will stage another in a series of one-day strikes, in some places engaging in civil disobedience. The workers’ “Fight for 15” campaign, an effort to win $15 hourly wages and contracts from some of the nation’s largest employers, most particularly McDonald’s, has been building steadily since a small band of employees first walked off the job two years ago in New York. By the conventional metrics of organizing projects, the workers’ effort, backed and coordinated by the Service Employees International Union, is a work in progress at best, a quixotic venture at worst. The great unionization campaigns of the 1930s and ’40s focused on factories that employed thousands. McDonald’s offers unions no such economies of scale: The hundreds of thousands of people who work for the company and its franchises are scattered among thousands of small outlets. It’s hard to see how even a rising number of sporadic strikes by discrete groups of employees will bring McDonald’s to the bargaining table anytime soon. Still, even though the campaign has yet to win a union contract for a single worker, it already has to be judged a signal success. By highlighting the abysmal incomes of millions of hardworking Americans, it has prodded governments to phase in minimum-wage increases in a growing number of cities and states. California has raised its minimum to $10; Massachusetts, to $11; the District and its Maryland suburbs to $11.50. Seattle has hiked its minimum to $15, and San Francisco voters are expected to do the same at the polls in November. San Diego recently raised its standard to $11.50, and on Monday, Los Angeles Mayor Eric Garcetti proposed raising his city’s minimum to $13.25 — roughly the same level that New York Mayor Bill de Blasio (D) and Chicago Mayor Rahm Emanuel (D) are pushing for. Other legislation targeted at low-wage workers is being enacted, as well: Last week, the California legislature, with the backing of Gov. Jerry Brown (D), passed a bill mandating paid sick days for the state’s workers. The fast-food workers’ campaign, then, may be viewed not simply as a unionization drive but also as the second act of a broader workers’ movement kicked off by the Occupy Wall Street demonstrations of 2011. Occupy never developed a strategic focus that went beyond occupying, but it nonetheless focused the nation’s attention on the widening chasm separating the 1 percent from everybody else. The fast-food campaign, similarly, has not produced — not yet, at least — anything resembling a union contract, but it has staged enough high-profile actions, with a compelling economic and moral message, to win real gains for workers, whether those workers stand to ever become union members or not. The unions’ victory in Seattle — together with its small, suburban adjunct, SeaTac, the only cities to have gone all the way to $15 — is emblematic of the way workers win today. Initially, unions hoped simply to win contracts for the 6,000 service-sector workers at Seattle’s airport and the surrounding hotels. When employers resisted, the unions threatened to place a $15 wage proposal on the SeaTac ballot (the airport is located in SeaTac), but still the employers wouldn’t negotiate. To everyone but the unions’ surprise, voters approved the measure last November. In Seattle proper, SEIU leader David Rolf timed fast- food demonstrations to coincide with major events in that city’s mayoral election, even succeeding in getting eight of the nine candidates to a televised debate in which all the questioners were low-wage workers. The eventual winner, Ed Murray, took the strongest stance in favor of the $15 standard, and, emboldened by the victory at SeaTac, steered a business-labor negotiating team and then the city council to enact the $15 ordinance this summer. Instead of unionizing 6,000 workers, then, the unions engineered a major raise for an estimated 100,000. In today’s America, workers can still mobilize and win, but their victories are far more likely to come in the political and legislative arenas, where unions retain some power, than in actually building unions, which the weakness of U.S. labor law renders nearly impossible. The challenge before unions, then, is how to maintain and devise organizations that enable workers to have bargaining power — at the ballot box, in the halls of government and, perhaps, ultimately, in the workplace again — when employers and the law are arrayed against them, and when the workers they champion aren’t dues-paying members who provide the funding for their endeavors. Absent such organizations, workers’ ability to bargain — at the polls no less than on the job — will eventually disappear. _Read more fromHarold Meyerson’s archive or follow him on Twitter._ **Read more about this topic:** Eugene Robinson: Obama should raise the minimum wage Catherine Rampell: Seattle’s bold minimum wage experiment Harold Meyerson: A higher minimum wage may actually boost job creation The Post’s View: A middle path on increasing the minimum wage

Obama’s claim that there is ‘no solid evidence’ that boosting the minimum wage harms jobs

_“We all know the arguments that have been used against a higher minimum wage. Some say it actually hurts low-wage workers — businesses will be less likely to hire them. But there’s no solid evidence that a higher minimum wage costs jobs.”_    *[WSU]: Wayne State University **–President Obama,remarks on economic mobility, Dec. 4, 2013**    *[WSU]: Wayne State University The Fact Checker generally hesitates to wade into messy economic debates. As the Atlantic memorably noted earlier this year, “If a meteor ever smashes into the earth, leaving the planet a dark lifeless wreck, there will still be two economists walking down a desolate post-apocalyptic Connecticut Avenue arguing about whether minimum wage laws kill jobs.”    *[WSU]: Wayne State University But here’s the president of the United States, essentially saying that the debate has been settled. Is that really the case? The president’s comments are striking because, as any student of Economics 101 can tell you, it flies in the face of basic economic theories about the impact of higher costs on employment. Here’s how economist Paul Krugman, a fan of the president’s proposal to boost the minimum wage, put it in 1998:    *[WSU]: Wayne State University In a more recent column on the minimum wage, Krugman again referred to basic economic principles:    *[WSU]: Wayne State University The White House, in support of the president’s comment, pointed to a section of the 2013 Economic Report of the President (pages 120-121). The report noted that most economists had once believed an increase in the minimum wage would reduce employment but that “the consensus view among economists has since shifted as more evidence has accumulated.” It also cited a 2009 meta-analysis of 64 studies of the minimum wage that found “no evidence of a meaningful adverse employment effect” of the minimum wage.    *[WSU]: Wayne State University The problem is that while there may be a new consensus emerging on the left-leaning side of economic theory, there is an equally fierce response from other economists. In 2006, economists David Neumark and William Wascher published a survey of more than 100 studies, and came to an opposite conclusion, directly contradicting the results of the so-called New Minimum Wage Research. They found that the majority of the studies showed that “raising the minimum wage leads to economic distortions and often has unintended adverse consequences for the employment opportunities of low-skilled workers.”    *[WSU]: Wayne State University The Fact Checker obviously is not going to take a stand on this debate, only to note that it exists. Each side can find fault with the methods of the other. Neumark and Wascher were faulted for making judgments about different studies, while the meta-analysis was criticized for treating each study as equal in quality.    *[WSU]: Wayne State University Economist Arindrajit Dube and others came up with a new approach in 2010, looking at the impact in counties adjacent at different states, that bolstered the findings of the new minimum wage forces. But economists Jonathan Meer and Jeremy West this year fired back with a study that found that minimum wage hikes reduce net job growth because of the effect on expanding companies. (In October, Dube responded that their supposed job losses were occurring in the sectors without minimum wage workers, which in turn prompted this rebuttal by Meer and West.) And a 2011 study from economists at the London School of Economics and the Central Bank of Turkey found higher minimum wages increased unemployment.    *[WSU]: Wayne State University In any case, it’s wrong to suggest the debate is settled. Economists remain sharply divided about the issue. Daniel S. Hamermesh, an economist at the University of Texas at Austin who supports indexing the minimum wage to inflation, said the president is making a sharp distinction when the real question is whether the impact will be large or small: **Update, Feb. 18** : The Congressional Budget Office analyzed the proposal to increase the minimum wage to $10.10 and concluded that, under a mid-range estimate, it would lead to a loss of 500,000 jobs because of two key reasons: consumers buy fewer goods because of higher prices resulting from a minimum wage and because employers hire fewer workers because the cost of labor has increased. This is not an exact science, and CBO said the full range of the impact on employment was a very slight decrease in jobs to as many as 1 million fewer jobs.    *[WSU]: Wayne State University The president is making a bit of a judgment call when he uses a phrase such as “no solid evidence.” But at the same time he appears to be dismissing the research and findings of a significant part of the economic academy. A few tweaks to his sentence would have made it more accurate. He could have referred to “mixed evidence.” Or he could have said that increasingly economists are turning up evidence that, especially if the minimum wage just keeps up with inflation, the impact on jobs likely is negligible. But to flatly declare the debate is over is misleading.  He did not quite say there was no evidence–but he came close.  (About our rating scale)    *[WSU]: Wayne State University  **NEW: Send us facts to check byfilling out this form**    *[WSU]: Wayne State University **Follow The Fact Checker onTwitter and friend us on Facebook**    *[WSU]: Wayne State University

Why Scott Walker thinks the minimum wage is ‘lame’

Now that he's officially a presidential candidate, Gov. Scott Walker (R-Wis.) is learning that every word he says is parsed in a way that it might not otherwise be. Which isn't to say that he wasn't being intentional when he called the idea of a minimum wage "lame" while talking to Fox News' Sean Hannity Monday night. But it makes a closer look at his comment more than warranted. "The left claims that they're for American workers," Walker told Hannity. "They've just got really lame ideas, things like the minimum wage. Instead of focusing on that, we need to talk about how we give people the skills and the education, the qualifications they need to take on careers that pay far more than minimum wage." Walker's tapping in to the conservative opposition to recent proposals to significantly increase the minimum wage, especially for fast food workers. After the Congressional Budget Office looked at the effects of lifting the baseline to $10.10, Pew Research pointed out that it would "fuel both sides of the minimum-wage debate" -- those who want to move people out of poverty and those who think that it will end up costing jobs. It will cost some jobs, the CBO figured -- but with the benefit of putting $17 billion more in real income in the pockets of the poorest workers.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico The governor has crafted a third category. Last fall, he told the editorial board of the Milwaukee Journal-Sentinel that he doesn't think the minimum wage "serves a purpose" because the debate becomes "what the lowest levels are at. I want people to make, like I said the other night, two or three times that."    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico If the purpose the minimum wage is meant to serve is to lift people out of poverty, Pew points out that Walker's right: Most minimum wages aren't high enough to do that. The minimum wage is indeed lame, in the sense that it's relatively impotent. Earning a minimum wage in 2014 was enough for a single person not to live in poverty, but not anyone with a family -- and not everywhere across the country. In part, that's because the minimum wage -- like wages on the whole \-- has stayed fairly flat, meaning that its spending power has diminished. (Prior to three increases in 2007 through 2009, the last minimum wage increase was in 1997.)    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico What Walker's trying to do, though, is reframe the issue. Increasing the minimum wage would, by Pew's assessment, result in a net boost to real incomes of $2 billion. But Walker and other conservatives would rather focus on getting more people jobs that pay a higher salary. The left's plan is lame in _that_ sense because it is a Band-Aid to the real problem of opportunity. Like welfare, they might argue, it provides some disincentive to self-improvement.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico Self-improvement is challenging when you're living in poverty. And if Walker's goal is to "give people the skills and the education" to get better paying jobs, a minimum wage job can help fill that gap. Here's a story to that end: "My first job was washing dishes at the Countryside Restaurant. Then, I moved up to the big times and started flipping hamburgers in high school at McDonald’s to save up for college." Two minimum wage -- or barely-above-minimum wage -- jobs that allowed someone to go to college. The two can go hand-in-hand. The person who worked at those restaurants, of course, was Scott Walker, and the story came from his announcement speech. When he was squirreling away money to attend Marquette, the salary he was making probably seemed less lame.

A wrong-headed Maryland bill attacks local worker-friendly legislation

_Wade Henderson is president and chief executive of the Leadership Conference on Civil and Human Rights. Christine Owens is the executive director of the National Employment Law Project._ One of the most inspiring movements in recent history has been the Fight for $15, led by low-wage workers who organized to win higher wages and other benefits in their workplaces, communities and states. With the retrenchment of workers’ rights and civil rights we now face at the federal level, local initiatives such as the Fight for $15 are even more important for ensuring good jobs that support families and communities. But now, in Maryland, the Fight for $15 finds itself under attack from a surprising source: Maryland Del. Dereck E. Davis (D-Prince George’s). Davis introduced harmful legislation that would block cities and counties in the state from raising the minimum wage higher than the state’s paltry level of $8.75 per hour or adopting other basic worker safeguards, including paid sick leave. Legislative leaders in Annapolis must reject this wrongheaded proposal — and instead strengthen protections for vulnerable workers across the state. Cities and counties have been leading the push for stronger worker protections in the United States in recent years. The Fight for $15 started in New York and spread to San Francisco, Seattle, Los Angeles, Chicago and the District. Cities and counties have led the way in ensuring that workers are entitled to paid sick leave, a basic protection that most states, including Maryland, still do not guarantee. Maryland’s cities and counties have long been leaders in this movement. In the 1960s, Baltimore was among the earliest cities to enact a local minimum wage. Montgomery and Prince George’s counties have had higher local minimum wages since 2014. Last year, Montgomery County became the first community in the state to guarantee earned sick leave. In introducing his legislation, Davis argued that the state needs a uniform business environment. But the experiences of the more than 40 localities that have adopted local minimum-wage laws indicate that these measures help workers and are manageable for employers. One key role they play is to allow higher-cost regions to adopt minimum wages that better match their costs of living. Maryland’s D.C. suburbs are among the nation’s most expensive places to live, with living costs comparable to New York, San Francisco and Seattle. According to the Economic Policy Institute, in 2014, a single worker without family responsibilities living in the D.C. suburbs needs to earn at least $20 per hour on a full-time basis just to make ends meet. Parents need significantly more. Montgomery and Prince George’s counties raised their minimum wages to $10.75, going to $11.50 this year. The Montgomery County Council recently passed a bill increasing the minimum to $15. (The county executive vetoed it.) Davis’s legislation would block these local efforts and harm workers and their families. Local wage laws allow a safety valve for addressing worker pay when the state is unable to act. For example, with Gov. Larry Hogan (R) likely to veto any action by the legislature to raise the minimum wage significantly, local laws may be the only way many Maryland workers will get a raise in the near future. Davis’s proposed ban on local wage laws would have an especially severe impact on workers of color. As a recent report by the National Employment Law Project highlighted, more than half of African American workers and almost 60 percent of Latino workers struggle to make ends meet on less than $15 per hour. Thousands of home health aides, security guards and fast-food workers across the state would be locked in poverty wages if Davis’s legislation passes. This bill is coming from a Democrat who has often supported workers. Typically, red-state Republicans team up with corporate interests such as the Koch brothers-backed American Legislative Exchange Council to block cities from raising their local wages. And it has been communities of color and civil rights organizations such as the Southern Christian Leadership Conference, the NAACP and faith groups that, with worker-rights groups, have championed local action to protect workers rights and ensure that they are not left behind. Working families in Prince George’s County and throughout Maryland need Davis to lead in the fight to raise wages and protect workers — not to try to lock workers in poverty. **Read more about this issue:** The Post’s View: $15 is the wrong goal for minimum-wage advocates Katrina vanden Heuvel: How a $15 minimum wage went from ‘extreme’ to enacted Michael Saltsman: Raising D.C.’s tipped minimum wage would hurt, not help, servers Jared Bernsten and Ben Spielberg: Raising the minimum wage doesn’t hurt businesses

How Australia’s minimum wage differs from America’s

Eugene Robinson [“An issue Democrats can win on,” op-ed, Dec. 7] argued that America’s minimum wage should be increased in part because it is lower than in some other countries, such as Australia. But the high Australian minimum wage that he cited is misleading, because it doesn’t apply to young workers, who disproportionately lose their jobs in response to minimum wage increases. Australia’s high minimum wage applies only to most workers age 21 and older. Workers younger than that can legally be paid as much as 63 percent less than that wage, depending on their age, and they sometimes receive less than the U.S. minimum wage. ****Hans Bader,** Washington** The writer is senior attorney at the Competitive Enterprise Institute.

There’s some really good news for low-wage workers this weekend

It has been a difficult year for the left politically, but at least with respect to the minimum wage, progressive activists had major victories — including in a couple of very red states.  The greatest increase will apply to companies in New York City with at least 10 employees. Minimum-wage workers at these businesses will receive a raise of $2 an hour on Saturday as the floor increases from $9 to $11. More-modest increases will apply to smaller firms in New York City and companies elsewhere in the state. Workers also will receive substantial raises in states carried by President-elect Donald Trump. In Arizona, the hourly minimum will increase from $8.05 to $10. The floor will increase from $7.50 to $9 in Maine, from $8.50 to $8.90 in Michigan and from $8 to $8.50 in Arkansas.    When asked in a debate a year ago whether he supported an increase in the minimum wage, he said, “I would not do it.” In May, though, Trump altered his position, seeming to suggest that, while he would support an increase in the minimum, he thought that states should set the levels and that the federal government should not enforce a minimum at all.  While proponents of minimum-wage increases have had impressive successes, they did not expand that momentum this year to the 21 states that have not set floors above the federal minimum of $7.25. Workers making the minimum in those states will not get a legally mandated raise this year. Seven of the 19 states raising minimums this weekend will record modest increases of between a nickel and a dime per hour to adjust for increases in the cost of living.

How the U.S. minimum wage stacks up globally, in charts

As part of his economy-focused State of the Union address, President Obama made a rare pitch for raising the federal minimum wage. At the current $7.25 rate, full-time workers earning minimum wage make an annual $14,500, while the federal poverty level for a family of two is $15,130. Some have argued that Obama should have called for an even higher wage floor -- he promised $9.50 in his 2008 campaign -- but regardless, the United States has one of the lowest minimum wages among developed economies.    *[WSU]: Wayne State University As the International Labor Organization found in their most recent Global Wage Report, in most developed countries minimum wage workers make a much higher percentage of the median full-time wage. In France, for example, the minimum wage is about 60 percent of the average salary, while in the United States it's just below 40 percent. Only Japan and Spain trail the United States in how much the lowest-rung workers make, compared to all employees:    *[WSU]: Wayne State University As the ILO puts it, the wide-ranging minimum wage levels "reflect different perceptions about the risks that minimum wages may pose in respect of the displacement of low-paid workers" -- meaning that some countries' policymakers don't worry as much about higher wages causing layoffs, which is a chronic complaint of U.S. minimum-wage opponents. What's interesting is that minimum wage growth has declined across all developed economies over the past four years, so the United States is hardly alone in that regard. (It has only increased here from $6.55 to $7.25 since 2008).    *[WSU]: Wayne State University The ILO writes that although governments used higher minimum wages as a type of social protection through 2009, as the recession worsened most policymakers either slowed the increase of minimum wages or froze them entirely.

Los Angeles approves $15.37 minimum wage for hotel workers

The Los Angeles City Council voted Wednesday to raise the minimum wage for hotel workers to $15.37, one of the highest wage requirements in the country. Hotel workers in yellow shirts packed City Hall as the council voted 12 to 3 to approve the measure, which will go into effect for hotels with at least 300 rooms beginning in July. Hotels with 150 rooms or more will have to meet the wage requirement a year later. “Hotel workers are here because they want family-supporting wages,” said Maria Elena Durazo, executive secretary-treasurer of the Los Angeles County Federation of Labor, AFL-CIO, during the public comment portion of the meeting. “Hotel workers are here because they know they deserve better.” But opponents of the wage hike said it would be bad for business. James Crank, president of the Beverly Garland hotel in North Hollywood, said one set wage across such a sprawling and diverse city didn’t make sense. “The San Fernando Valley is not Santa Monica,” Crank said. “The San Fernando Valley hotels cannot contain a rate of this magnitude.” The minimum wage will be among the highest in the country. Mayor Eric Garcetti hopes to follow it with a city-wide hike to $11.25 by 2017.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico California’s minimum wage is currently set at $9, and it’s one of 22 states with a minimum wage higher than the federal level, according to the U.S. Department of Labor.    *[WSU]: Wayne State University   *[Tue]: Tuesday   *[Wed]: Wednesday   *[UNM]: University of New Mexico

Raising the tipped minimum wage: Good for workers, good for restaurants

Michael Saltsman’s assertion that raising D.C.’s tipped minimum wage would hurt servers was flat-out wrong [“Take a tip from servers: Leave their wages alone,” Local Opinions, May 15]. As a Manhattan restaurant owner, I’m proud to say that the recent increase in the minimum wage has made my business stronger and my employees’ livelihoods stabler and more secure. We also increased wages for our kitchen staff this year. As a result, our low turnover rate is the envy of our peers: The national average is 70 percent per year; ours is less than 10 percent. Customers admire and support our commitment to fair wages. And, most important, it’s the right thing to do. We are not alone. Mr. Saltsman’s cherry-picked anecdotes do not reflect the views of the restaurant owners I know. For example, Danny Meyer and Union Square Hospitality Group’s #HospitalityIncluded initiative has been a resounding success; the restaurant the Modern just posted its most profitable quarter to date. Seven states, including those that make up the entire West Coast, have eliminated the tipped minimum wage, and the predictions of a restaurant apocalypse ring hollow. Mr. Saltsman’s position is hardly surprising. His employer, the Employment Policies Institute, lobbies for the corporate restaurant industry, which has worked to keep restaurant wages low and benefits nonexistent. Advocating for a tipped minimum wage of $2.77 seems more appropriate to 1976, not 2016. ****James Mallios** , New York**

1 in 13 minimum wage workers has a college degree

You may increasingly need a college degree to get a job, but there’s no guarantee that job will pay decent wages.    *[WSU]: Wayne State University Here’s a breakdown of all workers who earn at or below the minimum wage, sorted by educational attainment, from a recent Labor Department release:    *[WSU]: Wayne State University Altogether, 7.9 percent of workers earning at or below the minimum wage have at least a bachelor’s degree. That said, only a very small share of college graduates overall actually wind up in minimum wage jobs. Of all bachelor’s degree holders who are paid at hourly rates (that is, excluding salaried workers), just 1.9 percent earned at or below the minimum wage. The share of workers overall who make at or below the minimum wage has declined in the last few decades, likely at least in part because the value of the minimum wage has fallen in inflation-adjusted terms.    *[WSU]: Wayne State University While minimum-wage workers are often stereotyped as being pimply teenagers working part-time to collect a little pocket money, actually about half of minimum wage workers are at least 25 years old, and about a third of minimum wage workers typically log at least 35 hours a week.