In a public event on Sunday at 2 p.m., the Teamsters Local 117 and OneAmerica announce in press release, Uber and UberX drivers will describe the company’s "predatory practices, the unwarranted deactivation of drivers from the Uber app and flaws with the company’s rating system," at the Yesler Community Center. Seattle City Council members Mike O'Brien and Kshama Sawant will be there.
"My rating went to a 4.6 (out of a five-star rating) and they suspended me," said former Uber driver, Will Anderson, in the release. "They just turned my phone off. They didn’t give me a warning, they didn’t give me a week’s notice...And they’ve done that to a lot of people. That’s huge—if you make an investment in a vehicle and you have a family you need to feed."
I'll have more on this next week, but in a statement—surprise!—Uber rejected the allegations. "Uber uses a rating system that is based directly on rider feedback and is an average of the rating they received after completing a trip with a rider," says Uber Seattle General Manager Brooke Steger. "If a partner is consistently receiving negative feedback, partners are provided with the opportunity to improve their service level. If riders continue to complain, the partnership may be ended with that driver as they are not able to provide the level of service that our riders demand." And, she says, there's an appeal process for "deactivation."
Uber has been banned in Portland, New Orleans and Miami, and there's growing pushback from drivers and officials from Houston to San Francisco. But let's not throw it under the bus (remember buses?) yet. If the company's going to strike the right tone and handle worker complaints constructively, Seattle's a great place to start.
Remember Sakuma Brothers Farms? The sprawling berry farm in Skagit Valley that's totally a friendly family farm, not a multi-million dollar company built on the exploitation of migrant workers (including children) who do excruciating, low-paying work picking berries and live in decrepit labor camps that are nothing more than clusters of run-down shacks?
The farm is preparing for this year's harvest season, which begins in June, by declaring that it will exclusively rely on berry pickers imported from Mexico under the government's H-2A guest worker program. But that means the hundreds of farmworkers who stormed off the farm last summer on strike will be out of the job this year—if the farm's application is approved by the Deparment of Labor. (The farm is still under investigation for using guest workers last year during a labor dispute, which is prohibited.)
Here's the thing: the farmworkers who've picked berries for Sakuma Brothers in the past are dropping off hundreds of signed letters—farmworker Ramon Torres, who led the strike last year, has 317 in hand and expects to soon have more than 400, as more seasonal workers migrate north from California—with the Department of Labor that say they're ready and able to work for the farm.
But the farm says there's a labor shortage. "That's a lie, there are a lot of workers," Torres says when I reach him by phone. I ask whether they're ready to work. "Sí, ahora," he responds emphatically. Last year, Sakuma Brothers Farms fired Torres for a domestic violence charge and tried to drag his reputation through the mud by incessantly bringing it up and posting the arrest record number on its website. The charge was thrown out with prejudice by a Skagit County judge in February, meaning it had no basis and the plaintiff (in this case, the state) cannot appeal.
By law, a farm cannot use imported guest workers unless the government certifies that there are not enough "able, willing, qualified, and available" US workers, and that the wages and working conditions of US workers won't be adversely impacted.
Mike Klotz is co-owner of Delicatus, a Seattle delicatessen. This piece is part of a series of minimum wage op-eds from activists, business owners, low-wage workers, and experts. If you have an editorial you'd like to submit, send it here.
Council Member Sawant,
I am a progressive, and upon hearing of your campaign for city council, I found myself with a moral dilemma. I was excited to support a candidate who spoke of the injustices of corporations, but as a small-business owner, I was also concerned at the impact a 60 percent wage increase would have on the very business I worked so hard to create. My business partner felt as I did, and on October 26, 2013, he wrote you an e-mail addressing our very real concerns. Less than 24 hours later, he received a response from your campaign assistant* addressing our concerns and closing with this assurance:
We would not want to enact a minimum wage increase without also guaranteeing subsidies/tax credits to small business owners, an overhaul of the B&O tax code, and the establishment of a non-profit municipal bank to invest in small business. So in many ways, the plight of small businesses will be in a much better position with someone like Kshama in office fighting for the interests of ordinary people.
Because of that campaign promise, we both voted for you. And it is because of that statement that I find myself at odds with what you have done since taking office.
KPLU walks us through the union's history and makes the the current national union bosses sound really sketchy—holding votes on holidays, overriding local leadership, and being forced to redo the election by the Department of Labor after an investigation:
Jason Redrup is a longtime machinist and most recently a business representative in District Lodge 751. But over the years, even he didn’t pay that much attention to the process of electing new national union leaders.
“They were really not elections, per se, because they didn’t have anybody running against them,” Redrup said. “It was almost like reading the minutes. It’s like we’d get somebody to read off the list of names and they’d be nominated, and that’s the last we’d hear of it.”
But now, there is actually an election happening, and Redrup is one of the reformers running to replace the union’s leaders. Over the weekend, Boeing machinists gathered in Renton to prepare to get out the vote, each of them walking out the door with stacks of sample ballots and fliers listing the reform ticket candidates...
What’s driving the reform effort in the Seattle area is residual anger over the Boeing contract extension offer. In January, members narrowly accepted the plan that phases out their defined-benefit pension in exchange for securing production of the 777x jet.
Read the whole thing. The story explains that similar reform efforts are underway at other big unions, including postal workers, but quotes a UCLA researcher who throws cold water on their chances: "Insurgent candidates have an uphill fight, and the case of the machinists is no exception."
A recent report suggests that unless Qatar issues and enforces sweeping labor reforms soon, more than 4,000 migrant workers in the country will die before it hosts the 2022 World Cup.
...An estimated 1,200 Indian and Nepalese migrant workers have died in Qatar over the last three years from work-related causes (which include accidents on the job, heart attacks from heat stress, and illness connected to substandard living conditions). The two countries are estimated to supply near half of Qatar's 1.4 million migrant workers.
The reason why employers in Qatar are in the habit of seizing the passports of their workers is as much practical as symbolic: the passport registers a human with rights, a human who is recognized and documented as such. To seize a passport is to seize the political as visible—there can also be a politics without the state, a politics "sans papiers." What is left (or more closely, what is desired) is something like Agamben's bare life, a life that can be killed without a sacrifice (work accidents, heat stress, untreated illnesses). The words of a FIFA executive, Theo Zwanzinger: “This feudal system existed before the World Cup...”
Hamilton Nolan at Gawker posted an anti-union video that Target shows its employees. Nolan explains:
The existence of Target's new anti-union employee training video (entitled "Think Hard: Protect Your Signature") was first reported today by Josh Eidelson at Salon. And we have obtained the actual video, which is above. It features Dawn and Ricardo, a cool, knowing, multiracial pair of Target employees who are here to talk to you, the Target team member, about the dangers of unions. "Someday, someone you don't know may approach you at work, or visit you at home, asking you to sign your name to an authorization card, petition, or some other union document," Ricardo warns.
"Unions want what we have" the video declares. How so? Ricardo explains, as if speaking to a child: "We're a target, because unions are threatened by us. And here's why: when we take business away from retailers that are unionized, those companies may downsize, reducing the number of employees. And that means the union loses members, which is a big problem for the union business. Did you notice how I just called it a business? Because that's what it is."
Dawn continues: "A union is not a charity. it's not a club, and it's not part of the government." Ricardo explains that "unions may have been needed in the past," but the worker protections previously enabled by unions are now state and federal law, so why would anyone need to join them? "Nobody wants to pay dues for something they already have," Dawn concludes. Because everything is great in America!
In the fall of 2011, I spent a lot of time with Seattle's Occupy constituency. Like, a lot of time. And during those months—when Occupy Seattle went from "a lot of dedicated people who wanted the attention of a city government who seemed to be largely ignoring their plight" to "a small group of very militant, very demanding transients"—I watched a movement that I really, really believed in begin to slip away as louder, more aggressive voices took over.
And I'm worried the same thing could happen with the 15 Now campaign for a higher minimum wage.
At a town hall meeting on March 5, I watched some very heartfelt, very reasonable people testify both for and against a higher minimum wage. I also watched business owners and employees alike propose rational methods for enacting the change—policy ideas that would guarantee a living wage and also help ease the increase in labor costs for employers.
Yesterday, Starbucks announced that patrons would finally be able to tip their baristas digitally. Which seems like a good thing but is in fact really kind of awful.
Beginning March 19, customers using Starbucks App for iPhone in the U.S., U.K. and Canada will experience a streamlined design and easy access to their account and My Starbucks Rewards information. In addition, customers using the app will have the option to leave a tip at more than 7,000 company-operated Starbucks® stores in the U.S.
Customers can show their appreciation to store partners by tipping through the Starbucks App for iPhone. Customers are given the option to provide a tip in the following denominations: $0.50, $1.00, $2.00.
Note: The tips will not be based on percentage. They'll just be a flat rate. If you're, say, picking up the office coffee order and it comes to, like, $40, the highest tip you can leave is $2.00, or about a 5% tip. Starbucks doesn't mention if you can give more than one tip, but I doubt it—so that's the first bullshit thing.
The second bullshit thing is that this is most likely a way for Starbucks to dodge paying their employees more.
As Dominic pointed out yesterday in this piece you should read about the proposed $15/hr minimum wage, one tactic employers are trying to use to cut their own labor cost in the instance of an increase is "total compensation," or rolling tips in with wages. This is a way to offset labor costs, while essentially placing the burden of paying service workers on to customers.
Previously, the only way for customers to show their appreciation/help baristas reach anything close to a living wage was to tip in cash. Cash tips are sort of a double-edged sword; while people carry actual bills a lot less frequently, resulting in fewer tips, cash tips aren't documented. The IRS does require baristas to declare tips as part of their income, but those who work at places without digital or credit card tipping rarely do, because a.) there is no record, and b.) there are rarely enough of them to make them worth declaring.
Additionally—and this is perhaps the most salient part of all this—Starbucks can't point to those tips as part of the baristas' wages.
As a result, tips have been sort of a see-no-evil aspect to Starbucks's (and similar companies') business model. Digital tipping allows them start accounting for those tips and, potentially, get away with including them in barista wages.
To be fair, when I was working as a Tully's barista, I would have loved digital tips because it would have meant more much-needed money in my pocket. And in the immediate future, digital tips will absolutely be beneficial to low-wage workers, because it will just be more money.
But in the long-term, especially when the fight to increase the minimum wage is happening right in Starbucks's front yard, the timing of this decision is definitely suspect.
Oh, and the $2.00 limit thing is pretty shitty, too.
If Seattle restaurateurs think a 61 percent increase in the minimum wage is precipitous, just look at what their cohorts in Santa Fe County, New Mexico are going to have to deal with:
The Santa Fe County Commission voted unanimously Tuesday to increase the minimum wage in Santa Fe County from $7.50 per hour to $10.66 per hour.
The ordinance passed by the commission also calls for employees who normally receive more than $30 per month in tips or commissions to be paid a base wage equal to 60 percent of the new so-called “living wage."
The lowest allowable hourly rate for those employees will increase from $2.13 per hour to $6.40 per hour. Both new wage standards are set to take effect in 60 days.
The new minimum wage will be increased annually by the percentage of increase — if any — that occurs in the Consumer Price Index, and the base wage for tipped employees will increase in relationship to the new minimum wage.
That represents a 200 percent increase in the minimum wage for tipped employees, 42 percent for everybody else! And unlike Seattle, where our hike to $15 will almost certainly be phased in over several years, Santa Fe County's wage hike happens all at once, and in only 60 days. That's not much time for businesses to adjust to the new reality.
Opponents relentlessly warn that sudden massive hikes in the minimum wage inevitably lead to mass extinctions of small businesses. Looks like Santa Fe County will test that thesis before Seattle does.
In other minimum wage news, the Los Angeles City Council has unanimously voted to authorize a study on raising the minimum wage for workers at large hotels to $15.37 an hour. By the time Seattle's minimum wage hits $15, that number may not look so radical anymore.
Danny Westneat apparently thinks of himself as a lone voice of reason in the wilderness, and so when the same Seattle Human Services Coalition report that came across everybody else's desk came across his desk, he asks: "Is the city even aware of these problems? I would hope so, but who really knows."
Um... yeah, Danny. That's why SHSC surveyed its members in the first place, several of whom sit on the mayor's Income Inequality Advisory Committee. I first mentioned that the committee was considering accommodations for nonprofits a month ago, and I only mentioned the issue because it had been raised to me by members of the committee. So yeah. The city is aware of these problems.
(As a tangent, let me just say that Westneat mentioning the report's "delicate and blandly worded conclusion" while ignoring the firmly worded opening statement—"SHSC fully supports raising the minimum wage ... to $15/hr"—is disappointing.)
As for how to pay a living wage to all those college educated social workers currently earning only $12.75? Yeah, raise taxes. Of course, raise taxes! We underfund human services to the point where we impoverish those serving the poor. The status quo is indefensible.
As for which tax to raise, here's an idea I first pitched nearly a decade ago, when the Sonics were first threatening to leave the city. A Jock Tax: an income tax on the salaries earned by athletes during their “duty days” in the city.
At least twenty other states already levy just such a “jock tax”… a tax our own Sonics, Mariners and Seahawks players already pay on nearly every away game. So why shouldn’t we tax opposing players too?
It won’t cost WA residents anything, and in fact, it won’t cost most of the visiting players all that much either, as any tax they pay here can be deducted from their state and federal income taxes, and they’re already hiring accountants to file tax returns in a dozen or more states. And they’re millionaires. Put a high exemption on the tax so as not to burden low-paid athletes in low-profile sports, but make the A-Rods pay their due. They can afford it.
A Jock Tax would be a tax on the privilege of playing professional sports in Seattle, and as such is not explicitly prohibited by anything in state statute. To avoid potential legal complications due to our lack of an income tax, we'd likely have to levy the Jock Tax on our own athletes too. But that's okay. They can afford it. And a rather middling Jock Tax rate should easily cover the added expense of paying human service workers a $15 minimum wage.
Yeah, I know, an income tax is allegedly unconstitutional. But the underlying constitutional issue—Is income property? (Hint: It's not. It's a transaction)—hasn't come before the state supreme court in over half a century, and well respected constitutional attorneys expect our modern court would likely overturn the crippling 1933 decision. Overturning that decision would put an income tax back on the table in Olympia, and that is the only way to spark the kind of debate that could ever lead to building the political support necessary for implementation.
So that's my modest proposal: pass a Jock Tax dedicated to funding human services, while phasing in a $15 minimum wage for human service providers over a period long enough to allow for the Jock Tax to wend its way through the courts.
Go read this excellent column by Joni Balter.
In a preliminary report released today (pdf), the Seattle Human Services Coalition (SHSC) declared that it "fully supports" raising Seattle's minimum wage to $15 an hour, while urging that it be implemented in "a thoughtful manner to prevent unintended consequences," such as denying low-income people access to critical services.
The Seattle Human Services Coalition recognizes the importance of a livable minimum wage in addressing poverty in our community. SHSC fully supports raising the minimum wage for all human services workers (and others) to $15/hr.
We are also acutely aware that this call for raising the minimum wage must be done in such a way that does not result in a decrease in urgently needed services; any solution must take into account the impact on the vulnerable people we serve.
SHSC's concerns are very real. As the report points out, nonprofits generally don't have the option of raising prices or cutting profits in response to higher labor costs. Without additional resources (from donations and government grants and contracts), many human service organizations would be forced to cut back services. The report contains a laundry list of potential cuts that we would surely want to avoid, from reducing the availability of Head Start to decreasing housing and rental assistance to the homeless to closing after school programs and much more.
The sad truth is that persistent underfunding has made social work, childcare, and other human services some of our nation's lowest paid professions. "Parking lot attendants get paid more than childcare workers," SHSC co-chair Steve Daschle told me. "It is so telling of our society that we value our cars more than our children." With so many human service workers now earning below $15 an hour, a minimum wage hike would cost SHSC members millions of dollars a year.
The challenge in the minimum wage debate, says Daschle, "is to get policy makers to look at the bigger picture, and see how these decisions ripple across the broader community." More funding might be part of the solution, as well as a phase in that gives both human service organizations and their government and philanthropic funders the time to adjust. But as much as he warns against ignoring the potential impact on vulnerable communities, he also cautions against misusing this report: "It should not be used as a reason for not pursuing a minimum wage," insists Daschle.
"Much of our work is all about trying to bring a livable wage to all people," says Daschle. Including the employees of SHSC members.
If there was one thing in the minimum wage debate that everybody seemed to agree upon, it's that a 61 percent hike in Seattle's minimum wage from $9.32 an hour to $15 an hour would be unprecedented. Except, we were all wrong.
While researching the history of the minimum wage, I stumbled on Initiative 518, approved in November, 1988, by a whopping 77 percent of Washington voters:
Shall the state minimum wage increase from $2.30 to $3.85 (January 1, 1989) and then to $4.25 (January 1, 1990) and include agricultural workers?
That represents a stunning 85 percent increase in the state minimum wage over two years, a far more precipitous hike than the three-year, 61 percent increase the city council is likely to approve.
To be clear, most of Washington's minimum wage workers enjoyed a substantially less dramatic hike in income. By 1988, Washington's state minimum wage had been allowed to lag far behind the then federal minimum wage of $3.35 an hour. So most of our state's minimum wage workers saw a 27 percent increase in wages from $3.35 to $4.25.
But tipped employees (like restaurant workers) were different.
In 1966, Congress created a "tip credit," allowing employers to pay a subminimum wage to tipped employees—originally 50 percent of the base minimum wage. But federal law also permits states to create their own higher minimum wage standards. When the federal minimum wage is higher than the state's, the federal wage prevails; when the state minimum wage is higher than the federal, the state's wage takes precedence.
There is no tip credit in Washington state. But since Washington's 1988-era $2.30 minimum wage was below the federal minimum wage of $3.35, but above the federal subminimum wage for tipped employees, $2.30 an hour was our effective minimum wage for tipped employees at the time I-518 went to the ballot. A June 2, 1988 article in the Spokesman-Review appears to confirm this:
What a difference a year makes. Last March, when the Seattle City Council first convened a special committee to study taxi regulations, the issues before it seemed intractable.
Taxi operators were demanding a crackdown on flat-rate/for-hire cars picking up hailing customers, among other issues, while struggling flat-rate/for-hire drivers were demanding the same rights as traditional taxis to pick up hailing customers. There seemed to be no way to make both sides happy.
"I'd love to be presented with that problem again," Committee on Taxi, For-Hire, and Limousine Regulations chair Sally Clark sighed wistfully about her original mission. A year later, the surging popularity of unregulated "rideshare" services like Lyft, Sidecar, and uberX (redubbed "Transportation Network Companies," or TNCs) has flipped the industry on its head, uniting taxi and flat-rate/for-hire operators against a common foe. At stake is the survival of the traditional taxi industry—and the interests of the consumers it exclusively serves—as well as that of its trendy new competitors promising better service at an unregulated price.
Those TNCs are popular, yes—just look at those pink mustaches everywhere—and they've hired themselves some high-priced lobbyists. But at a packed committee meeting on February 14, they faced organized opposition from the established taxi industry. So the council canceled a vote and postponed legislation for two weeks while they wrestle with the thorniest question: Should the city place a limit on the number of TNC drivers (which currently proliferate in numbers the companies won't disclose), and endure the backlash of customers who find them faster and more efficient than traditional taxis?
... And so can the Seattle Times editorial board:
NO grumbling or muttering is allowed or appropriate. Lingering hard feelings over labor politics between Boeing and the Machinists union must yield to a golden reality.
First the extremely profitable Boeing extorted billions in additional tax breaks from the state at a time we're failing to meet a court order to adequately fund K-12 schools, and then it extorted humiliating contract concessions out of its union machinists—the source of the company's profits—at the threat of moving their jobs out of state. And "no grumbling or muttering is allowed or appropriate"...? You gotta be fucking kidding me!
Great. The jobs are staying in the region. Good for the workers. And good for Boeing, which won't lose money on planes built here the way it loses money on planes built in non-union South Carolina. But honestly, fuck 'em. Boeing management should have to work hard to win back the trust and loyalty of the best aerospace workforce in the world.
No, what would really be inappropriate here is silence. For it is the refusal to express righteous outrage at the outrageous that lays the groundwork for its repetition.
According a report by Bloomberg News, a hike in the federal minimum wage from $7.25 to $10.10 an hour might only cost consumers an additional penny on a $16 purchase.
A boost in the minimum wage to $10.10 would add $200 million — or less than 1 percent — to Wal-Mart’s annual labor bill, the University of California Berkeley Center for Labor Research and Education estimates.
If Wal-Mart passed along the estimated $200 million in extra labor cost to consumers, it would equal about a penny per $16 item, said Ken Jacobs, the Labor Center’s chairman. Meanwhile, the rise may boost purchases among the chain’s core shoppers, many of whom could see their earnings climb, he said.
Walmart has remained neutral in the current minimum wage debate, but actually lobbied on behalf of a higher wage floor the last time it was raised. “The U.S. minimum wage of $5.15 an hour has not been raised in nearly a decade, and we believe it is out of date with the times,” then CEO H. Lee Scott said in a speech in 2005. “Our customers simply don’t have the money to buy basic necessities between pay checks.” The same is true today.
Kudos to executives at Gap, Inc. for doing right by both their employees and their shareholders:
In a surprising move, Gap Inc. informed its employees on Wednesday that it would set $9 as the minimum hourly rate for its United States work force this year and then establish a minimum of $10 next year.
Gap said this move would ultimately raise pay for 65,000 of its 90,000 American employees, including those at Banana Republic, Old Navy and other stores.
Gap is making this move as many states consider raising their minimum wage, and as Republicans and Democrats debate a bill that includes a proposed increase in the federal minimum wage to $10.10 an hour by 2016.
... Glenn K. Murphy, Gap’s chief executive, said in a letter to the company’s employees, “To us, this is not a political issue. Our decision to invest in front-line employees will directly support our business, and is one that we expect to deliver a return many times over.”
Industry analysts suggest that Gap really will realize many returns, including lower turnover, happier, more committed, higher-quality employees, and thus more satisfied customers. And no doubt there's a PR advantage to voluntarily embracing a higher minimum wage—wildly popular with voters—while one's competitors appear to be dragging their feet if not actively opposing it. But despite Murphy's protestations, it is clearly a political issue as well.
Minimum wage campaigns like the one being fought in Seattle and elsewhere are both raising public consciousness about the issue and applying political pressure in both legislatures and board rooms. Again, I'm not questioning management's decision to do the right thing by its employees, but Gap's decision to voluntarily raise minimum wages by 38 percent over two years did not happen in a vacuum. It was influenced by two years of smart, dedicated political activism.
As for the rest of the retail industry, they have a choice. They can follow the lead of companies like Gap and Costco and get out in front of the minimum wage—securing better, more dedicated employees now, while reaping the benefits of good will—or they can get out of the way and save their pennies as they wait for lawmakers and voters to force a higher minimum wage upon them. But within this current political climate, allowing oneself to become a poster child of the minimum wage opposition can be very bad for business, something even the fast food industry has apparently learned:
Seattle McDonald's owners and operators say they're discussing raising minimum wages at their Seattle restaurants and the are not fighting wage hikes. The statement comes from Derek Morrison, spokesman for the local restaurant owners.
The opposition has already lost the minimum wage battle; the only question is by how much? And smart executives are already adjusting their business models to the new political and economic reality.
I'm glad he's on our side in this particular struggle, and if Seattle's $15 minimum wage ultimately goes to the ballot, I sure hope he spends big in its defense. But if Nick Hanauer is in fact "a leader in push for $15 minimum wage," as the Seattle Times implies, who exactly is following him? Certainly not the thousands of fast food workers nationwide who have risked their jobs striking for a living wage, or the hundreds of organizers from labor unions like SEIU and activist groups like Socialist Alternative who have relentlessly campaigned to push this issue along.
Nothing against Hanauer—he's playing a useful role too. But this eagerness to anoint him a "leader" (you know, because he's very, very rich), comes off as a willful denial of the grassroots nature of this movement. In spirit, in tactics, and in personnel, the fight for a $15 minimum wage arose from the ashes of Occupy Wall Street. No doubt Thomas Carlyle would approve of this Great Man interpretation of history, but to tout a 1 Percenter as a "leader" of this movement is not only counterfactual, it is counterproductive, as it inevitably raises suspicions about motives.
Hopefully, future historians will ignore the first draft.
Want to join the fight for a $15 an hour minimum wage and organize your own neighborhood group? Then join Kshama Sawant and 15Now.org for a day of organizing, education, and music tomorrow, starting at 2 pm at SEIU 775 Headquarters, 215 Columbia St., Seattle. In addition to Sawant, featured speakers include Seattle/King County NAACP leader James Bible, SEIU 775 president David Rolf, and Green Party presidential candidate Jill Stein, plus musical performances from RA Scion and Epiphany Jam Experience.
Been meaning to post this video for a couple days:
When San Jose voters went to the polls in 2012 to consider a ballot measure raising the city's minimum wage to $10 an hour—a 25 percent increase above California's $8 an hour state minimum wage—opponents decried the dire economic consequences. Jobs would be lost, shopkeepers would shut their doors, and businesses would flee across the street to nearby Cupertino, voters were warned.
So what sort of disaster actually befell San Jose businesses after voters approved the measure by a 60-40 margin? KIRO-7's Essex Porter went down to San Jose to find out:
The owner of Philz Coffee, Nick Taptelis, faced a decision when the minimum wage went up 25 percent. He decided to keep price increases to a minimum, instead focusing on training his 26 employees to deliver high quality service, and then enticing them to stay with a starting wage of $11 an hour, a dollar more than required.
“If you want everybody happy, satisfied, great customer service, sometimes you have to sacrifice a dollar,” he said. Taptelis says business growth has more than paid for the additional cost.
As head of the San Jose Downtown Association, Scott Knies has seen the effects of the higher minimum.
“In some cases businesses put folks on part time, they lost benefits,” he said. A solid opponent of the higher minimum wage before the vote, Knies led the business community in making “lemonade out of lemons,” creating a marketing campaign to keep customers in San Jose. He says downtown did not lose any business because of the higher minimum wage.
You know, in the same way that Washington's $9.32 an hour minimum wage hasn't caused businesses to flee across the border to exploit Idaho's $7.25 minimum.
Yes, I know, $10 isn't $15, so maybe businesses here will have a tougher time adjusting. Or maybe not. The point is, San Jose voters quickly discovered that the fear-mongering of minimum wage opponents was totally unfounded.
In this week's print edition of The Stranger we break the news about a new poll that finds 68 percent support for raising Seattle's minimum wage to $15 an hour. It's kinda stunning. But of course there is more to the poll than I had room to cover in print, so if you want additional details, I have uploaded a PDF of the EMC Research polling memo.
There is a lot to unpack in this poll, but apart from the surprising strength of support for a $15 minimum wage in Seattle, I think one of the more fascinating aspects is the way that a majority of voters agree that such a measure would both hurt and help local businesses. Fifty-one percent of respondents agree that "increasing the minimum wage will hurt local small, minority owned, and family owned businesses," yet an astounding 71 percent also agree that "a higher minimum wage helps local businesses because more workers making more means they will have money to spend." That overlap represents a pretty nuanced take on the issue. But it also represents an embrace of the demand-side economic arguments that Kshama Sawant, Working Washington, and others have been relentlessly pushing over the past year or so.
It's been the supply-siders who have dominated the economic debate since the Reagan years—the key to priming the economy and creating more jobs, we've been told, is to cut taxes and costly regulations on businesses. It is this trickle-down dogma that opponents fall back on when they warn that a higher minimum wage would inevitably cost jobs, thus hurting exactly the people it is intended to help. But Seattle voters clearly aren't buying it.
Could it be that in the minimum wage debate we have finally found a wedge issue that effectively undermines the conservative economic doctrine that has dominated policy debates for the past thirty-some years? If so, then the corporatists might be better served by quickly conceding on the minimum wage, than by prolonging a debate that sparks an economic reawakening that could threaten their entire economic agenda.
The New York Times editorial board effectively makes the case for raising the minimum wage, because unlike the Seattle Times editorial board, its editors are smart, thoughtful, and respect math:
The political posturing over raising the minimum wage sometimes obscures the huge and growing number of low-wage workers it would affect. An estimated 27.8 million people would earn more money under the Democratic proposal to lift the hourly minimum from $7.25 today to $10.10 by 2016. And most of them do not fit the low-wage stereotype of a teenager with a summer job. Their average age is 35; most work full time; more than one-fourth are parents; and, on average, they earn half of their families’ total income.
None of that, however, has softened the hearts of opponents, including congressional Republicans and low-wage employers, notably restaurant owners and executives.
The editorial goes on to explain other factual, math-based things—like how there is overwhelming evidence that modest hikes in the minimum wage do not cost low-wage jobs. Read the whole thing for yourself, and then weep for our city's lack of editorial clarity and honesty.
Now, if I were writing for the Seattle Times editorial board, and I was tasked by publisher Frank Blethen with opposing the $15 an hour minimum wage movement here in Seattle, I would embrace the NY Times' logic, and strongly editorialize in favor of a bill to raise the state minimum wage to $12 an hour—something I know senate Republicans would never allow. Then, establishing that pro-minimum wage advocacy as street cred, I would argue against raising Seattle's minimum wage to $15 an hour—warning that it is too much, too soon, and too local—in the hope that a compromise on the $15 target might split minimum wage proponents, thus undermining their effort.
A sudden 61 percent hike in the minimum wage would indeed be unprecedented, so while there is no evidence that such a hike would cost jobs, neither is there evidence that it wouldn't (as Carl Sagan used to say, "the absence of evidence is not the evidence of absence"). Such a $12-not-$15 argument would represent a smart rhetorical strategy that preys upon uncertainty without coming off as heartless, stupid, or dishonest. But I'm guessing the Seattle Times editorial board is too rigid to abandon the losing arguments with which it has already failed to shift the minimum wage debate. Instead, we'll continue to be presented with unconvincing anecdotal stories about how a minimum wage ordinance would hurt immigrants and empower labor bosses.
The fact is, when it comes to public opinion, opponents have already lost the minimum wage debate. No shame there; the facts just simply weren't on their side. But if the goal is to actually influence public policy, they are doing themselves a disservice by clinging to supply-side orthodoxy.
A new released statewide poll (pdf) conducted on behalf of SEIU 775NW, UFCW Local 21 and other labor unions finds strong support for raising the Washington State minimum wage to $12 and hour: 65 percent net favor to 28 percent net oppose. The survey of 500 likely voters was conducted December 6-9, and has +/- 4.4 percent margin of error.
The survey finds broad support for a higher minimum wage across demographic groups—even 43 percent of Republicans expressed favor—and in two key swing legislative districts. The survey also found that nearly three quarters of respondents support paid sick leave, according to a press release:
Both of these worker-supportive bills are before lawmakers here in Olympia. Rep. Jessyn Farrell (D-Seattle) introduced HB 2672 which would raise the state’s minimum wage to $12/hour by 2017. The minimum wage bill is scheduled to be heard at 1:30 p.m. Tuesday before the House Labor Committee. The Paid Sick and Safe leave bill, HB 1313, introduced by Rep. Laurie Jinkins (D-Tacoma), passed out of the House by 52-45 vote last week.
My guess is that if 65 percent of voters statewide support a $12 minimum wage, then there's probably a similar level of support for a $15 minimum wage here in ultra-liberal, high-cost-of-living Seattle. Hard to see how elected officials can argue for bucking this trend.
As popular support for a $15 minimum wage continues to grow, Seattle's small-business community has grown ever more fearful.
In an open letter to Mayor Ed Murray and the task force he's assembled to study the minimum-wage issue, the Broadway Business Owners Association recently declared that it "unanimously opposes a $15 minimum wage," asserting that "a 60% increase in employee wages would create an extreme hardship," forcing the closure of some small family-owned businesses.
It is a fear that restaurateur Dave Meinert—who insists he supports raising the minimum wage—was quick to repeat. Sitting in the bar at Capitol Hill's Lost Lake Cafe, which he owns, Meinert counted up his fixed costs and thin margins before declaring: "If I had to go to $15 across the board tomorrow, I'd close."
But it is unlikely to come to that, for a number of reasons.
One of the main arguments that opponents use against raising the minimum wage (by any amount, let alone a jump to $15) is that it would inevitably reduce employment for low-skill workers, particularly teenagers. Were these arguments put forth by advocates for the young and/or working poor, I might take them more seriously. But coming as they do from corporate-funded propaganda machines like Douglas Holtz-Eakin's American Action Network (which spent $750,000 in Washington State in 2010 running attack ads against Senator Patty Murray), I find their defense of low-wage jobs on behalf of low-skill workers to be rather disingenuous.
But is it true? Holtz-Eakin and other conservatives love to cite a 2012 study by economists Joseph Sabia, Richard Burkhauser, and Benjamin Hansen (pdf) that found that a 31 percent New York State minimum wage hike from $5.15 to $6.75 between 2004 and 2006 reduced employment for those at the bottom of the workforce by over 20 percent compared to neighboring states. Indeed, whenever you hear a minimum wage critic categorize this assertion as an undisputed fact, they are almost always referring to the Sabia, Burkhauser, Hansen (SBH) study.
But a new paper from University of Delaware economist Saul Hoffman (pdf) pretty much tears the SBH study a new one. It's not the methodology that throws the much-cited SBH study off, finds Hoffman, but rather the data. SBH reached their conclusion by analyzing a subset of the federal government's monthly Consumer Population Survey (CPS), resulting in a very small sample size of young, low-skill workers. But when the full CPS was used—the "gold standard" of US employment data—the negative impact on employment disappears.
My re-analysis of the SBH natural experiment yields results that are substantially different than theirs. I find no evidence whatsoever of a negative employment impact for young, less-educated workers in NY following the minimum wage increase. The difference in results reflects the different data sources used. SBH used the CPS-MORG, which are a one-quarter subsample of the full CPS, while I used the full CPS files. In this case, the MORG files yield incorrect estimates of the employment rate changes in NY and in the control states, substantially overstating the apparent impact of the minimum wage change. When the two data sources conflict, there can be no doubt that the full CPS, which is the source of official employment data, is the appropriate one to rely on.
But Hoffman goes further. He also applies the same analysis to CPS data for four other states that raised their minimum wage during the same period (if less steeply than NY), finding a small positive employment impact compared to neighboring states. Hoffman concludes:
My findings of employment effects that are either negligible, as in the case of New York, or positive, as in the case of DC, FL, IL, and NJ, are largely consistent with the newer round of minimum wage employment estimates.
Hoffman cautions that his findings merely support the idea that a modest hike in the minimum wage over two years "may not be problematic in terms of employment." NY's $5.15 to $6.75 minimum wage hike represented a 31 percent increase; the other states he analyzed raised their minimum wage by only 10 to 20 percent. But a $15 minimum wage would represent a 61 percent increase over Seattle's current $9.32 an hour minimum wage. There is little precedent for such a large increase, and as Hoffman notes, the natural experiments he analyzes "are not informative about what the employment consequences might be for much larger increases." But, then, neither is the SBH study that opponents so often cite to argue that a $15 minimum wage would be a disaster.
The point is, while it might seem reasonable to speculate that a large minimum wage hike could negatively impact employment—particularly for young, low-skill workers—there is no data to back this argument up! So there.
As is typical of such things, there wasn't much actual news at Mayor Ed Murray's afternoon news conference updating the progress of his Income Inequality Advisory Committee. This is the task force that will ultimately advise Murray on how to craft a $15 minimum wage ordinance, and given that it has had only two meetings, mostly dedicated to organizational issues, there couldn't possibly be much interesting news to report.
Still, it's nice to have an update. Members have now been divided into subcommittees and are preparing to commission an economic impact study that will guide their recommendations. While most of their deliberations will be behind closed doors, there will be five or six opportunities for public input between now and April, including a city council hearing and an "income inequality symposium." The committee is scheduled to make its recommendations to the mayor by late April. That's a pretty tight schedule.
More interesting were some of the comments made by Murray and committee co-chair Howard Wright (of the Space Needle and hotelier Wrights), about how eager they are to avoid sending a $15 minimum wage to the ballot (presumably either as an initiative or a referendum). "I don't want to see this deteriorate into class warfare," emphasized the upper class Wright. "We as progressives must reach out and work with each other to improve the wages of people who work in this city, and not drive this to the ballot," advised Murray, warning that a ballot measure would "divide us."
Which is good. Because fear of a ballot measure is exactly what we need to keep this effort moving forward. As I mention in today's paper, a $15 minimum wage is extremely popular, and growing in support every day. When asked if he was still committed to $15 as the target, Murray unhesitatingly answered "I am." That means if Wright—the co-chair representing the business side of the table—is committed to avoiding a ballot fight, then he also must be committed to somehow getting to $15. And that's a very positive sign that some sort of acceptable recommendation can ultimately come out of this process.
President Obama plans to stress executive action in Tuesday night's State of the Union address, including an order to raise the minimum wage to $10.10 an hour for some federal contract workers, administration officials said.
Obama will also pledge to work with Congress on legislation to increase the federal minimum wage for all workers from its current $7.25 to $10.10... Obama's minimum wage order will cover people who are performing services, such as janitors or construction workers, and are making less than $10.10 per hour.
The executive order is likely to impact about 250,000 federal government contract workers.
There is a growing sense of inevitability to the minimum wage debate, kind of like we see with marijuana legalization and marriage equality, in which states and cities are leading the way. Republicans can resist this all they want—at their peril—but the nation is embracing income inequality as one of the most pressing issues of the day.
So the standard Republican response to any Democratic proposal to raise the minimum wage is that if we really want to help working people, government should focus instead on creating jobs. “I do not think this idea will create one additional job,” Senator Janéa Holmquist Newbry (R-Moses Lake) told the Seattle Times about the House Democratic bill to raise Washington State's minimum wage to $12 an hour by 2017. Which is weird. Because because Republicans usually argue pretty strenuously that government isn't any good at creating jobs. That's the job of the private sector, they say.
I suppose Republicans might counter with proposals to cut taxes and slash regulations as a sorta supply-side stimulus package—because if only the very rich were just a little bit very richer, they'd start spending their fortunes creating more jobs, or something. But Republicans don't really have much else to offer in response to minimum wage hike proposals—nothing constructive, at least—other than accusing the working poor of being worthless and/or lazy, and warning that a higher minimum wage will destroy small businesses and cost us jobs.
Of course a higher minimum wage would cost some jobs—better paid workers are more loyal, healthy, and productive, and so some businesses would need fewer employees to achieve the same output. And I don't doubt that some businesses really would curb hiring out of fear or confusion or spite, while for other businesses it simply might take a little time for them to figure out how to deal with higher labor costs. I also suppose that there are some business models absolutely predicated on paying poverty wages; those jobs might be permanently lost.
But a higher minimum wage would also create jobs. More money in the pockets of those who need it most means more money being spent on goods and services. Even Walmart, the king of low wages, has unselfconsciously complained about how stagnant incomes have hurt its bottom line. So think of a minimum wage hike as a demand-side stimulus package. More demand will spur businesses to increase supply, and that means more hiring. It's basic economics, and at least as reasonable as the supply-side gospel that has dominated public policy for the past few decades.
And regardless of job creation, there is little debate that a higher minimum wage would reduce poverty rates. There might very well be some losers, but overall poverty rates would decline.
But there's one more advantage to a higher wage floor that I don't see much discussed, and that is that higher wages would more equitably distribute the jobs that are already available. Think about it. Wages are so low, that many low-wage workers need to take on second jobs just to scrape by. Forty hours a week (if you can get it) simply isn't enough to pay the bills. And then there are the many two-income families where one parent might choose to cut back their hours to better care for the kids if that was economically feasible.
Most people don't take a second job because they want to. They do it because they absolutely need too.
A livable minimum wage would mean fewer minimum wage workers holding more than one job, which would mean more jobs available to other minimum wage workers! You know, less unemployment. And as the demand for second jobs decreases, the labor market will tighten, spurring employers to offer even higher wages. Which means more money in the pockets of consumers. Which means more spending. And more jobs. It's a virtuous demand-side cycle.
A humane economy would not force the working poor to work 60 to 80 hours a week just to feed and clothe their children. And neither would a functional economy.
Following on the heels of Governor Jay Inslee's State of the State call to raise Washington's minimum wage, Representative Jessyn Farrell (D-Seattle) has introduced a bill to do exactly that. HB 2672 would raise the state minimum wage to $12 an hour in three increments—to $10 an hour in 2015, to $11 an hour in 2016, and to $12 and hour in 2017, after which it would be indexed to inflation.
Washington's current inflation-indexed minimum wage of $9.32 an hour is already on pace to exceed $10 an hour by 2017, so the actual net increase on final phase-in would be less than $2 an hour. But that's not nothing to the half-million or so Washingtonians who see their wages go up. It's also arguably good for the economy and good for taxpayers.
“If families have more money in their pocket, it lessens the demand for government assistance," Farrell explained in a press release. "That saves all of us money.”
In a prepared statement, Governor Inslee seemed to welcome Farrell's proposal:
“Too many hard-working men and women in Washington are falling further behind, impacting not just the prospects for those workers and their families but the prosperity of our state as well. That’s why I called on legislators to join me in this conversation and I want to thank the House Majority for putting forth a common sense plan for providing a fair wage for more Washingtonians.”
No, I don't expect this bill to pass this session because I don't expect anything to pass this session. But it is important to keep this conversation moving forward. That's how stuff ultimately gets done.
As to why $12 instead of $15, well, I'd rather raise the wage floor as high as possible, but there is a strong argument to make that since everything is more expensive here in Seattle than throughout much of the rest of the state, so too should our minimum wage. So I'm comfortable with there being some level of disparity.
Also, as I wrote after Inslee's State of the State address, any increase in the state minimum wage makes it easier to raise the minimum wage here in Seattle. Whether or not you buy into the argument that a $15 minimum wage would put Seattle at a competitive disadvantage compared to surrounding communities, even the mere prospect of a higher state wage helps undermine that argument. This bill is good for Seattle, even if it ultimately doesn't directly impact our minimum wage workers.
So kudos to Farrell and her 31 Democratic co-sponsors.
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