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FEBRUARY 2003
The Politics of the Minimum Wage Are Back
by Rick S. Bender, President of the Washington State Labor Council, AFL-CIO

State lawmakers tend to show considerable deference for public “mandates” as expressed through ballot initiatives that cut or limit taxes. Though legislators may privately gripe that these initiatives are bad policy or motivated by voter ignorance and self-interest, you won’t find many politicians signing legislation to undo them.

The same isn’t true for our state’s minimum wage law, which now faces a multitude of attacks in Olympia.

I’m proud to have personally filed Initiative 688 five years ago, which proposed to raise our state minimum wage and grant automatic annual adjustments for inflation. I’m proud that Washington’s labor movement led the charge for its passage, despite the fact that few union members would benefit directly.

We did it because we believe no one who works full time should be forced to live in poverty. Washington voters agreed -- by a 2-to-1 margin that surpasses every subsequent tax-cutting “mandate.”

Our state became the first to index its minimum wage (although Oregon and Alaska have since followed our lead and at least six other states have similar legislation pending). In doing so, we stopped our lowest-paid workers from watching their wages’ value continue to erode.

And as an added bonus, we spared ourselves the perennial minimum wage debate between the best economists money can buy about whether or not the sky will fall.

But guess what? They’re ba-ack.

Bills have been introduced in Olympia to create a sub-minimum “training” wage for teenagers and new hires, to allow employers to deduct employee tips or certain “reasonable costs” from these wages, and to freeze our minimum wage until the compassionate conservatives in D.C. get around to raising the federal version (mired for several years now at a shameful $5.15 an hour).

With the latest cost-of-living adjustment to $7.01 an hour and high unemployment caused by recession, business interests sense a window of opportunity to tamper with this law. Their efforts are bolstered by the tremendous public-policy influence recently granted them in the name of business “competitiveness.”

Their lobbyists offer anecdotal evidence of employers who say the minimum wage is putting them out of business.

But a new study by the nonpartisan Economic Opportunity Institute paints a different picture. Its analysis, “Working Well in Washington: An Evaluation of the 1998 Minimum Wage Initiative,” shows employment in minimum wage-paying industries like restaurants, hotels and retail establishments continued to grow in the pre-recession years of 1999-2000, even as the minimum wage jumped from $5.15 to $6.50.

With the onset of recession in 2001-02, and significantly smaller inflation adjustments in the minimum wage, employment dropped in those industries but at the same rate as job losses in other sectors. In fact, those industries' job losses were at a far lower rate than in better-paying sectors like manufacturing and high-tech.

Another thing business lobbyists would like us to believe is that minimum wage earners are all teenagers and lucky duckies with more than one job. The truth, according to census data, is that 75 percent of minimum wage workers are over 20, about 60 percent are women, nearly half are employed full time and one-third are the primary breadwinners in the family.

Reality check: At $7.01 an hour, full-time workers make less than $14,600 a year. That means many qualify for government assistance to meet their family’s basic needs like health care, housing, child care and transportation. In effect, we taxpayers are being asked to subsidize businesses by covering the societal costs of their poverty wages.

It’s time the “competagogues” in the business community stop blaming government for our economic problems. Let’s work together and find ways to make Washington an even better place to do business, without making it a worse place to live and work.

It’s also time for state legislators sponsoring these minimum wage attacks, none of whom I recall making campaign promises to freeze or cut the minimum wage, to be reminded: Keep the politics out of the minimum wage.

Otherwise, organized labor will give them all the politics they want -- by making sure voters know which of their elected representatives chose to attack our state’s lowest-paid workers.

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Copyright © 2003  Washington State Labor Council, AFL-CIO