Wednesday, March 12, 2014

"Compromising Won’t Help Get to $15 Now" -- The Urbanist


The first and most important step is to reject the argument that a higher wage is what would cause a business to go under. For nearly 40 years that claim has driven American economic thinking and all it’s gotten us is a stagnating wage and more people living in poverty despite holding down full time jobs. Since 1973 wages for non-supervisory retail workers have fallen by 30 percent when adjusted for inflation.
The evidence is clear—raising the wage never has the dire impacts that businesses fear it will. In 2012 San José, California raised its wage by 25% from $8/hr to $10/hr. Initial concerns have given way to acceptance and even supportas businesses realized they could adapt. Large and small businesses complained in the late 1980s and again in the late 1990s when Washington State raised the wage. Washington now has the highest minimum wage in the country (at least until California fully implements its new $10/hr wage in 2016). It also has a higher job creation rate than the national average.
Perhaps this is because, as research from Good Jobs Seattle shows, businesses will also see increased consumer spending that helps offset higher wage costs. An Economic Policy Institute study found that, based on numbers from the Federal Reserve, every dollar increase in the minimum wage led families to increase spending by about $2400 per year.
No wonder small business owners were among those speaking out in favor of the $15/hr wage at Wednesday night’s town hall meeting. They understand that we don’t have to smash workers’ wages to support local businesses.
Other businesses, like Elliott Bay Books, continue to charge that raising the wage will raise their costs so high that it will force them to close. The truth is that there is a wide range of factors that contribute to a business’s costs. Why is it that a wage is the one that is make or break? Businesses often complain about regulations. Yet there would be very little public support in Seattle for relaxing safety rules at a construction site, or health rules at a restaurant, even though doing so would almost certainly save those businesses money.
If we feel these small, local businesses need our help, the city can look at all kinds of programs, incentives, and maybe even tax credits or tax breaks. We could also look at ways that larger businesses are favored by local and state policies and address those, rather than try to protect the neighborhood bookstore by holding down wages. Some of those ideas may be practicable and desirable, and some might not. But there are many options open to us other than telling workers they have to accept poverty wages in order to keep their jobs. After all, most Washington progressives reacted with anger when Boeingmade exactly that same demand of its machinists recently, insisting they give up their pensions in order to keep their jobs.
Just as we insist all businesses respect health and safety rules, we must also insist they all pay their workers at least a $15/hr wage. No exceptions, no loopholes. Otherwise we will perpetuate a two-tier economy where some workers do well and others continue to struggle to afford rent. A universal wage increase doesn’t mean we are consigning popular local businesses to the dustbin of history. It just means all of us—owners, workers, consumers—are refusing to buy into the right-wing’s frame on wages and jobs. It means we’re going to innovate better solutions that match our values rather than undermine them. Solutions that emphasize the needs of workers, rather than subordinate those needs to those who own businesses.

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