AUDASE

The Talk of the Town; from The New Yorker

Thinking about the minimum wage 

COMMENT

Higher Calling

In 2005, Alaska Airlines fired nearly five hundred union baggage handlers in Seattle and replaced them with contractors. The old workers earned about thirteen dollars an hour; the new ones made around nine. The restructuring was a common episode in America’s recent experience of inequality. In the decade after 2000, Seattle’s median household income rose by a third, lifted by the stock-vested, Tumi-toting travellers of its tech economy. But at the bottom of the wage scale earnings flattened.

Sea-Tac, the airport serving the Seattle-Tacoma area, lies within SeaTac, a city flecked by poverty. Its population of twenty-seven thousand includes Latino, Somali, and South Asian immigrants. Earlier this year, residents, aided by outside labor organizers, put forward a ballot initiative, Proposition 1, to raise the local minimum wage for some airport and hotel workers, including baggage handlers. The reformers did not aim incrementally: they proposed fifteen dollars an hour, which would be the highest minimum wage in the country, by almost fifty per cent. A ballot initiative so audacious would normally have little chance of becoming law, but Proposition 1 polled well, and by the summer it had turned SeaTac into a carnival of electoral competition. Business groups and labor activists spent almost two million dollars on television ads, mailings, and door knocking—about three hundred dollars per eventual voter. (Alaska Airlines wrote the biggest check for the no side.) On November 5th, SeaTac-ians spoke: yes, by a margin of just seventy-seven votes, out of six thousand cast. A reversal after a recount is still possible.

In any event, SeaTac has proved that the sources of surprise in American politics since the Great Recession are not limited to Tea Party rabble-rousing. The grassroots left, which seemed scattered and demoralized after the Occupy movement fizzled, has revived itself this year—with help from union money and professional canvassers—by rallying voters around the argument that anyone who works full time ought not to be at risk of poverty. Earlier this year, fast-food workers nationwide went on strike for higher pay. This holiday season, activists have been excoriating WalMart because one of its stores organized a charitable food drive for its own low-paid employees. McDonald’s was taken to task for suggesting, on a company Web site, that strapped employees could raise cash for presents by selling belongings on eBay.

The movement has momentum because most Americans believe that the federal minimum wage—seven dollars and twenty-five cents an hour, the same as it was in 2009—is too low. A family of four dependent on a single earner at that level—making fifteen thousand dollars a year—is living far below the federal poverty line. In January, President Obama called for raising the federal minimum to nine dollars an hour, and, more recently, he endorsed a target of ten dollars. Yet Congress has failed to act: a bill is finally heading for the Senate this month, but intractable Republican opposition in the House has made passage of any legislation in the short term highly unlikely. The gridlock has prompted local wage campaigns such as the one in SeaTac.

Twenty-one states and more than a hundred counties and cities have enacted laws that set minimums above the federal one. Before SeaTac’s vote, an Indian reservation in California had the highest local minimum in the country, of ten dollars and sixty cents. San Francisco’s is just a nickel less. But political support for higher wages extends well beyond Left Coast enclaves. According to a Gallup poll taken earlier this year, a majority of Republicans favor a minimum wage of nine dollars. That reflects a truth beyond ideology: life on fifteen thousand a year is barely plausible anymore, even in the low-cost rural areas of the Deep South and the Midwest. National Republican leaders are out of touch with the electorate on this as on much else, and they are too wary of Tea Party dissent to challenge their party’s current orthodoxies of fiscal austerity and free-market purity. In New Jersey, Governor Chris Christie, a presumed 2016 Presidential contender, publicly denounced a ballot measure to raise his state’s minimum to eight dollars and twenty-five cents and to guarantee annual increases linked to inflation. The proposal passed last month anyway, backed by a sixty-one-per-cent majority.

For decades, business owners have resisted higher minimum wages by arguing that they destroy jobs, particularly for young people. At some theoretical level, high minimum wages will distort job creation, but the best empirical evidence from the past decade is aligned with common sense: a minimum wage drawn somewhat above the poverty line helps those who work full time to live decently, without having a significant impact on other job seekers or on total employment. (For example, a study of pairs of neighboring counties with differing minimum pay found that higher wages had no adverse effect on restaurant jobs.) Even so, a federal minimum wage of ten dollars or more will not solve inequality. It will not stop runaway executive pay or alter the winner-take-all forces at work in the global economy. Yet it will bring millions of Americans closer to the levels of economic security and disposable income that they knew before the housing bubble burst.

Now ’tis the season to be hired for temporary low-wage jobs: about half a million people will get work packing Amazon boxes, tending department-store perfume counters, and restocking toy-store shelves to earn and spend their way through the holidays. For those who are paid minimum wage, the outlook remains desultory. Bloomberg News, noting that spendable incomes at the bottom of the pay scale have hardly risen for the fourth consecutive year, reported that “low-income Americans will again have a less-merry season than affluent consumers, who are more flush thanks in part to surging stock markets.”

In SeaTac, at least, there is cheer. The higher-wage campaign showed some of the Occupy movement’s exuberant spirit, but it added a poll-tested goal and the savvy of political professionals. It was politics of a familiar type, yet the bold demands discomfited some of the Northwestern establishment. The Seattle Times urged SeaTac-ians to vote no; the editorial board worried that Proposition 1 was “a labor contract written by social activists,” as if that were a departure from history. The case for a strong minimum wage has always been, in part, civic and moral. Minimum wages do not create new “entitlement” programs or otherwise enjoin the country’s sterile debates about the value of government. They are designed to insure that the dignity of work includes true economic independence for all who embrace it.

—Steve Coll