Why So Stingy, Seattle? Government Could Do Much More Than Raise The Minimum Wage!

Man, Forbes is all about the conservative contributors who protest (usually with misleading evidence) against Seattle’s $15/hr. I commented on Tim Worstall’s similar article a few weeks ago and argued against his claim that he was in the “evidence-based community.” I would wager that you, Mr. Leef, are in the same (mislead) boat.

Firstly, the timeline on the wage increase is often unknown and/or ignored. It will take seven years to phase in: The big companies (500+ employees) get three years since they have more “wiggle room” to account for the wage increase. The small companies (500 employees and less) get seven years to phase up to $15/hr. Furthermore, as much as three-quarters of Seattle’s establishments have fewer than 10 employees.

There are also allowances for teenage employees, they will get sub-minimum “training wages”. According to the EPI (in regards to the federal minimum wage):
“It is a common misconception that the minimum wage workforce is comprised mostly of teenagers working part-time to make a little extra spending money. This is decidedly not the case; rather, the vast majority – 84.1 percent – of those benefitting from the proposed increase to $9.00 are at least 20 years old. This means that less than 16 percent of the workers impacted by the President’s proposal are teenagers. … It is clear that the bulk of minimum wage workers are mid- or full-time adult employees, not teenagers or part-timers. (However, the fact that some of these workers are teens and part-timers who are working only to make some additional disposable income is not justification for paying them subpoverty wages.)”

Additionally, the Seattle minimum wage ordinance specifically states that there will be a sub-minimum wage for teenagers. The teen wage idea acknowledges that employment rates for workers aged 16 to 19 in the Puget Sound have fallen by half since 2000, according to the Brookings Institution.

Secondly, in terms of hours per week worked, low wages are more common among part time workers, yes, but most low-wage workers work full time. Among full time workers (those who report they usually work at least 30 hours a week when they work), 10% earn the current minimum wage compared to 30% of part time workers. Whereas, 65% of minimum wage workers are full time compared to 85% of all Seattle workers. (“Who Would be Affected by an Increase in Seattle’s Minimum Wage?” UW Report)

Thirdly, yes, more companies will turn to machines to replace workers. But that’s not a bad thing. We are in the middle of a Technological Revolution. The same thing happened in the Industrial Revolution: machines replaced human workers. I look at it as “trimming the fat.” The “fat” being the enormous profits that company executives get by not paying their workers living wages.

There’s an overwhelming need to invest more money and human labor in non-manufacture jobs. It is no longer necessary to have human workers take your order at McDonalds, for human workers to package your Amazon purchase, for human workers to assemble cars, and so on and so forth. This trend is not new, it’s been developing for the last few decades; think of the automobile industry crash in Detroit. Human labor should now being channeled toward thought-producing work: technological innovation, research, education, the arts.

And, finally, it seems like Forbes contributors are so blinded by their “conservative economics” that they don’t realize how important a minimum wage based on living costs is to the current economy. Ideals are great and all, but in order to work they must take the current economic contexts into account.

Historically, “while the laws governing wages initially set a ceiling on compensation, they were eventually used to set a living wage. An amendment to the Statute of Labourers in 1389 effectively fixed wages to the price of food. As the centuries passed, the Justice of the Peace, who was charged with setting the maximum wage, also began to set formal minimum wages. The practice was eventually formalized with the passage of the Act Fixing a Minimum Wage in 1604 by King James I for workers in the textile industry…

The first national minimum wage law was enacted by the government of New Zealand in 1894, followed by Australia in 1896 and Great Britain in 1909. In the United States, statutory minimum wages were first introduced nationally in 1938, and reintroduced and expanded in the United Kingdom in 1998. There is now legislation or binding collective bargaining regarding minimum wage in more than 90% of all countries.” (Wikipedia, Minimum Wage)

The minimum wage in the US is no longer live-able and has not been for a while now. It hasn’t kept pace with productivity since the 70s, and it hasn’t kept pace with inflation since the 80s. (CEPR)

According to the EPI:
“On average nationwide, working families with two parents and two children require an income of $48,778 to meet the family budget. In major urban areas, expenses for this four-person family range from $42,106 in Oklahoma City to $71,913 in Nassau/Suffolk, N.Y.; families in small towns and rural areas start from a low of $35,733 in Marshall County, Miss. to $73,345 in Nantucket and Dukes Counties, Mass.

Much of the regional variation in family budgets is pushed by price differences in just a few items: housing, health care, and child care…

Family budgets calculated by EPI represent the pre-tax (taxes are included as a budget category) annual family income required to maintain a safe but modest standard of living.”

In Seattle, specifically, the living wage for a family of the same size (2 parents, 2 children) is $19.63/hr which is $40,829 annually (MIT calculator). That is lower than the federal family budget average and yet still exponentially higher than the $15/hr minimum wage raise.

Is that enough evidence for you?

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by | June 23, 2014 · 5:43 pm

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