progressive federalism at work
Seventeen states and the District of Columbia have minimum wages higher than the federal rate, and labor groups are actively look to expand that number. In California, after vetoing minimum wage legislation twice, Governor Schwarzenegger will propose a $1 hike in the minimum wage next week as labor groups and Democratic politicians organize support for a state referendum. Similar initiatives proved successful in 2004 in Nevada and Florida. John Edwards has made increasing state minimum wage rates a central initiative of his One America Committee PAC.
Pursuing progressive reforms at the state level is wise, both as a policy matter and as political strategy. The current federal minimum wage results in an income that still falls below the federal poverty line. Opponents of the minimum wage have never proven that it leads to greater unemployment. The most common examples cited by conservatives are European countries with wages significantly higher than rates proposed by any serious advocates in the U.S. Pursuing activity at the state level has the added advantage of addressing the concerns of some that federal minimum wage hikes do not take local factors into account. State legislatures are presumably more sensitive to local economic conditions.
Politically, minimum wage legislation can serve as organizing tools. In particular, the use of the referendum can help with turnout in low income urban areas. Some (here, here, and Barney Frank in this story) have argued that gay marriage referenda helped stoke turnout for President Bush in 2004, though this view is ably disputed by others (here and Andrew Sullivan). Even if the evidence on the gay marriage referenda of 2004 is unclear, the potential for state minimum wage bills and referenda to assist in organizing and turning out the working poor should be explored.
The states can serve as a proving ground for an array of progressive, pro-working family policies that cannot receive a hearing in Washington today. This route permits experimentation with new approaches and can help revive the fortunes of Democrats in unfriendly states.
What a fantastic wage! A real windfall for those workers....
What is the minimum wage in most of western europe? About $10?
Oh, those democrats are just darn liberal!
THat was sarcasm BTW. The democrats are rightwing, and so are democratic activists.....
January 2, 2006 5:29 AM | Reply | Permalink
I'm not sure Iagee that this is such a great turnout driver, however. Particularly when used in presidential years. In those years, the only people it will bring to the poll are people who are not hooked in anyway. There is no reason to believethey'll vote the progessive way on other issues. Look at minimum wage in Florida. Bush won and the minimum wage won.
In off year elections, I believe there is a chance it could help by getting progessive/liberal voters who wouldn't otherwise vote to come out. So its a useful tool when deployed strategically, but not a silver bullet. This stuff isn't as important as the central policy issue of doing something to address stagnant wages and help working families.
January 2, 2006 6:04 AM | Reply | Permalink
If the minimum wage was $10.00 how many jobs would be cut and those workers receive $0.00? Wishing, sadly, doesn't make it so.
January 2, 2006 6:55 AM | Reply | Permalink
I agree, how many jobs would be cut.
When I go to my local cafe for coffee would I pay $5.00 a cup to pay this added increase in minimum wages.
I believe the market should dictate the price of wages.
You'll never create an environment of shortage of workers to jobs as long as you keep the border open.
Oil companies and grain companies or any other commodity knows that when you have a shortage you can increase the price, but when labor wants to make demands the business community hires the cheaper immigrant or decides to move oversees.
If the working class could control this labor pool, businesses would have to pay more and there would be compitition between the businesses. if a company didn't want to pay for health and welfare you as a worker could move where your needs are met and if that business wanted to retain you to prevent you from looking elsewhere you'd get your price.
But this idea of millions of illegal immigrants available to counteract the pressure that would come to bear on business's because of worker demands, it skews the free market when it comes to the shortage of labor.
Tariffs would offset this rush to move oversees.
This is just my opinion
January 2, 2006 7:50 AM | Reply | Permalink
How many people would be out of work with a minimum wage increase?
That's a good question and not surprisingly people actually look at statistics about that kind of thing. The data that I've seen (and this is most certainly not my area of study) indicates that the demand for minimum wage workers is pretty inelastic. When wages rise, the demand for workers doesn't change much in response. Wal-Mart and McDonald's will need just as many low-wage workers at $6.75 as they did at $5.75 and since cashier wages make up a relatively small part of the cost of the cheap crap, the consumer price of cheap crap stays pretty level.
January 2, 2006 8:24 AM | Reply | Permalink
Anyone that complains jobs may be lost through marginal increases in wages and benefits at the low end of the scale is in complete denial about the pillage of dollars that has been perpetrated by the upper end and the jobs that has cost.
January 2, 2006 8:49 AM | Reply | Permalink
As for outsourcing, Starbucks isn't going to outsource their cashiers. McDonald's isn't going to outsource their burger-flippers. Those are the minimum wage jobs in this country, and you can't outsource them. McDonald's was experimenting with call-center order takers, but that's just a small portion of their labor force. They'll still need kitchen workers, floor cleaners, etc.
General call centers are already outsourced. Most outsourcable jobs are already outsourced.
A higher minimum wage may possibly cause some businesses to close if they can't pay their workers, but more likely they'll raise prices somewhat. Imagine that, the wealthy middle class might actually have to pay a little more to the minimum wage workers they live off of.
Plus, raising minimum wage is a low-key way states can raise their tax revenue a little - with the lowest workers getting paid more, the taxed percentage of their income will also be a little higher.
January 2, 2006 8:49 AM | Reply | Permalink
I wonder if illegal immgrants are really such a drain on working class wages. As opposed to technological advances. Whenever I see pictures of any sort of processing plant whether cars or peaches what strikes me is how few people are seen.
Tom Friedman in his last book wrote about a fast food franchisee who's drive-in orders are taken in a central location hundreds of miles away from the restaurant. They are then sent back to the restaurant to be filled. This apparently eliminates a number of employees and fills the order more efficiently.
If raising the minimum wage does not cause the disaster the Right is always forecasting it is not the panacea of the Left either.
January 2, 2006 9:17 AM | Reply | Permalink
Not really because they are really two different problems that are connected by supply and demand. Top executives are grossly overpaid. It is an outrage, but most corporation have reduced the number of middle managers as well as blue collar workers. CEO's pretty much set their own pay by choosing who is on their boards.
Until this scam is address CEOs will continue to be overpaid. However, it does not mean that corporation will overpay for white or blue collar workers who can be replaced by technology.
January 2, 2006 10:58 AM | Reply | Permalink
There's nothing inherent about these jobs that make them low-paying, just as there was nothing inherent about the old factory jobs that made them decent paying.
And we could add, there's nothing inherent in U.S. executive positions that make their compensation exponentially bigger than even high-level managers' pay.
However, although fighting for a livable minimum wage is important, it won't do nearly as much for workers as universal health care. This is an issue on which employers and employees can agree on--U.S. companies are hobbled by expensive health care expenses that their rivals don't have.But before we reach that major battle, fighting state by state for increased minimum wage increases is a reasonable, morally necessary step in the right direction.
January 2, 2006 1:26 PM | Reply | Permalink
January 2, 2006 4:54 PM | Reply | Permalink
Thanks, AlanC9. I guess what I really meant to say is that there's nothing inherent in the job that executives do to make them worth spectacularly more than anyone else in their companies.
January 2, 2006 7:15 PM | Reply | Permalink