The minimum wage debate is really all about people. It’s about the guy who works at your neighborhood store, and the woman who takes care of your kids. It’s about making sure that our neighbors, friends, and employees have enough to live on. Ultimately, that will require much more than just raising the minimum wage, but increasing take home pay for low-wage workers is a great place to start.
I grew up in Seattle, and I have seen massive changes in those four decades. I think we can all agree that Seattle is not the working-class city it once was. This city is prosperous. Construction is booming, buildings are going up and we have a greater concentration of wealth than many other regions. But not everyone is benefiting. Simply put, the rich are getting richer, the poor are getting poorer and the middle class is getting squeezed. Many people I grew up with can no longer afford to live here, raise their children here, and grow the city. And that hurts all of us.
The cost of a one-bedroom apartment in Seattle has an average rent of about $1,500 a month, depending on the neighborhood. That’s far more than a full-time worker making $9.32 an hour can afford, especially when you consider other high costs it takes to live here like food, child care, and transportation.
Any policy changes to the minimum wage should be mindful of the impact on small businesses and human services. But we shouldn’t let that stop us from doing what is right and makes sense for our city, state, and our community. Because the biggest impact will be improved economic security which translates into less demand for social services and more customers for our small businesses.
Of course, there are a lot of claims floating around about increasing it and what it would do. In the spirit of moving forward thoughtfully, let’s take them one by one and look at the facts:
“It kills jobs!” The weight of real-world evidence shows that increases in the minimum wage do not have a disastrous impact on employment. However, the research largely focuses on modest minimum wage increases (10 to 30 percent), so it is difficult to measure the full impact of a large increase.
“It won’t reduce inequality.” An increase in the minimum wage would reduce wage inequality but not overall income inequality. The main reason for income inequality is that our tax system is upside-down, meaning it requires low- and middle-income people to pay a higher proportion of their earnings in taxes than wealthier people. Washington state has the most upside-down or regressive tax system in the country.
“An earned income tax credit would be better.” Studies show that a combination of increasing the minimum wage and an earned income tax credit (EITC) for low-income working people would be effective. The EITC boosts the income of low-wage workers, helping to keep them in the workforce and improving the lives and prospects of their children. Half of all states have an EITC that supplements the federal credit. Washington state has an EITC (the Working Families Tax Rebate) but is it not funded.
“Economic growth is the answer.” Our economy has grown substantially over the last four decades, but the majority of benefits have gone to the richest one percent. If economic growth at the top was the answer, we’d know it by now.
Increasing the minimum wage needs to be part of a broader strategy to reduce income inequality. That strategy should include long-term and short-term moves such as universal pre-kindergarten; fully funding basic education; child care subsidies, paid sick days and other policies that help parents find and keep a job; and making our tax system less regressive.
Let’s remember that this debate is about people and the future of Washington state. Raising the minimum wage is the right thing for all of us, but it’s only a start.
Remy Trupin is the Executive Director of the Washington State Budget & Policy Center, a research organization that focuses on the prosperity of all Washingtonians. Learn more at www.budgetandpolicy.org.