Apart from Seattle’s minimum-wage debate, America needs a pay raise
Increasing the minimum wage needs to be a national discussion. Involve Congress, and make it a campaign issue for 2014.
Times editorial columnist
Minimum-wage workers across America need a pay raise. They could use the cash and so could the economy that would immediately receive every penny.
Helping those on the lowest income rung does more good than that endlessly recycled shibboleth about tax cuts for the wealthiest empowering the economy. Yeah, prove it.
Seattle’s internecine debate over a $15 minimum wage stalled Wednesday, but was revived Thursday by Mayor Ed Murray.
I will concede the whole local discussion netted more results than the Occupy Wall Street political theater that it echoed.
Otherwise, the origin of the $15 figure was never clear. Proponent Nick Hanauer told a meeting of The Seattle Times editorial board that he basically made it up.
The other night, the economics correspondent for the PBS NewsHour said the proposed wage represented financial self-sufficiency for a Seattle household with one adult and one child. More than I knew before.
Part of the disconnect for me with the Seattle effort is the prospect of a higher minimum wage being fought out from city to city.
The time is ripe for the U.S. Congress to act. Right, I can imagine the eye rolls that sentence inspires.
I also want to read more about wage rates and cost of living. As contrived as $15 feels, I find a lot of credibility in the $13.58 hourly wage that Puget Sound’s resident number-crunching economist Dick Conway found when he did the math.
Ideas are in play at the federal level to varying degrees. One described by the Congressional Budget Office is backed by President Obama. A $10.10 option would raise the current $7.25 per hour to $10.10 in three steps — in 2014, 2015 and 2016. Then, and I think this is key, the rate would be annually adjusted for inflation measured by the Consumer Price Index.
Washington voters put indexing into state law in 1998, requiring adjustments based on the federal CPI for urban wage earners and clerical workers.
The CBO has a minor kerfuffle about the impact of minimum wage increases on employment, but lots more economists argue the effect is overstated.
Another study by the Congressional Research Service, entitled “Inflation and the Real Minimum Wage: A Fact Sheet,” explains the peak value of the minimum wage in real terms was reached in 1968.
That year’s $1.60 minimum wage had the buying power of $10.69 today. It would take a 47 percent bump of $3.44 to reach that point now.
Making the rate current and indexing it into the future is hardly a reckless step. If conservatives love to argue that generous welfare programs buy people into idleness, then make work attractive with decent wages.
Washington state’s minimum wage went to $9.32 in January, and Oregon’s rose to $9.10. California goes from $8 to $9 this July, and $10 by 2016. San Francisco’s minimum wage just went to $10.74.
In statistically adjusted numbers, about 3 percent of workers in Washington earn the minimum wage.
I am not a fan of nips and tucks on the minimum wage. Let the Internal Revenue Service keep track of those relatively few workers who receive a gratuity. Nothing about that culturally dictated income is predictable. And no assumptions can be made about how its applied across the food service and hospitality industry.
Credit for health-care payments? How many minimum-wage workers are covered by their employers?
Increase cost-of-living equity for minimum-wage workers. When teenage employees receive discounts on their expenses in the economy, then a discounted wage rate might be worthy of discussion.
Increase efforts to move people beyond minimum-wage jobs. Every penny spent on education, job training and workforce development pays dividends for individuals, employers and the state economy.
The fight is bigger than Seattle. Broaden the discussion, expand the political turf and increase the beneficiaries.
Lance Dickie's column appears regularly on editorial pages of The Times. His email address is email@example.com