Makes sense, when you think about it. The minimum wage struggle is occurring at the intersection of powerful forces. It’s taking place at a time of growing economic inequality, the erosion of working people’s rights, and the globalization of an economic oligarchy whose scope of power is unprecedented in modern times.
And now it appears to be applying an old maxim from the early days of the environmental movement: Think globally, act locally.
The voters decide
That’s why a lot of people will be looking very closely at the outcome of a city referendum in SeaTac, Washington. Voters there agreed to raise the minimum wage to $15 an hour, a measure which corporations fought bitterly and nearly to a standstill. The measure indexes the city’s new minimum wage to inflation, and requires employers to provide 6.5 days of vacation time per year to full-time employees.
It passed by only 77 votes.
The SeaTac vote is likely to face legal challenges, and for good reason: if it succeeds, it could become a model for similar initiatives around the country.
Voters in SeaTac joined those in New Jersey, who approved a smaller minimum wage increase that state. In an outcome that is at least as telling as SeaTac’s, New Jersey passed its referendum by a landslide margin of 60 percent to 39 percent – and it did so while simultaneously reelecting conservative Gov. Chris Christie by a similar margin.
The idea is gaining ground in state and local legislatures as well. County councils in Montgomery County and Prince George’s County in Maryland voted to raise the minimum wage to $11.50 per hour by 2017. Democrats in Illinois are pushing for a minimum wage increase to $10 per hour. California’s minimum wage rise to $10 per hour by 2016. Similar initiatives are being pushed in a number of other states, either as legislation or is ballot initiatives.
These efforts can be thought of as a sister struggle to the growing movement among minimum wage workers for better pay and improved working conditions. This renewed worker activism has been on display in strikes and other actions by fast food employees, and in the actions by Walmart workers which led to this weekend’s dramatic and successful Black Friday protests.
And, in a related development, worker organizers are planning fast-food strikes this Thursday in one hundred cities and additional demonstrations in another hundred cities.
In what may be a sign of this idea’s popularity, some Democrats clearly see these political initiatives as an opportunity to strengthen their party’s standing among voters. On the organizing front, the union movement is supporting the rising tide of activist fast-food employees. That movement can be seen as an opportunity to increase the nation’s wage base while at the same time reinvigorating and reshaping the working people’s movement.
Corporations don’t want to see a renewed union movement – or, for that matter, a renewed and more aggressively populist Democratic Party. They certainly don’t want to see an independent movement for economic justice which could reinvigorate both those institutions while moving leftward.
There’s another reason for corporations to resist them, too. If minimum-wage increases improve the economies of the communities which adopt them, the lesson will be visible to the nation as a whole. It will provide even more evidence for the idea that economies are best built from the ground up and the middle out, not from the top down.
Thinking economically, acting locally
But can these initiatives really succeed in improving local economies? Despite the naysayers, that seems likely.
Economist Tyler Cowen spoke for the “anti” side on the Marginal Revolution blog when he wrote of such initiatives, “… unless you have the Sea-Tac airport or some comparably immobile resource in your district, it is harder to make them work if the wage change is local only.” Certainly SeaTac’s airport makes it exceptional, but there are a number of municipalities with major employers.
And while there is no precise data on the impact of hyper-local minimum wage differences, it would be a mistake to accept the idea that these initiatives will only work in a SeaTac-like situation. Consider the county initiatives in Maryland, for example: It’s unlikely that people will drive from Rockville to Frederick or the District of Columbia for a lower-cost fast food meal.
Feeding the hand that bites them
Cowen goes on to say that these laws are “a classic instance of expressive voting at the expense of good economic policy.” Is that true? Will fast-food outlets sell fewer meals when the minimum wage is raised, for example? Let’s look a little closer at the data.
As the Bureau of Labor Statistics reports, “About three-fifths of workers earning the minimum wage or less in 2012 were employed in service occupations, mostly in food preparation and serving related jobs.”
Among other things, this is the same demographic that typically eats at fast food restaurants. This has led a number of economists to suggest that the cost of paying an increased minimum wage will be partially offset by an increase in sales these establishments. Lower-wage workers are also a primary target market for employers like Walmart, which is why certain estimates and studies have suggested that an increase to the minimum wage would lead to offsetting gains for the retail industry.
What’s more, an increase in the minimum wage would also release pent-up demand in the economy – demand that is likely to have a stimulus effect on local and national economies.
Successful minimum-wage initiatives at the state, county, and municipal levels could help spur action at the national level, while shifting the political equation leftward. Grassroots worker action may yet, as Rep. Alan Grayson says, represent “a new political movement of the disenfranchised.”
Even those highly-publicized Black Friday fights over televisions are, in an indirect way, part of the struggle. The fighters don’t realize it yet, but their squabbles symbolize the plight of middle-class Americans who have been forced to fight one another for meager “bargains” – “bargains” which include low-paying jobs with poor working conditions – rather than working together to fight for a better system of transactions.
Two complementary movements – one based in the workplace, and the other in the voting booth – could have profound and broad significance. Their immediate goal of increasing the minimum wage has enormous value on its own. But it could also become a coalescing point for a broader movement for economic justice.