Wage debate disrupts real efforts to help workers

Contributing WriterApril 30, 2014 

Seattle Mayor Ed Murray walks into an April 24 news conference past supporters and opponents of a proposal to increase the minimum wage in the city to $15 an hour.

ELAINE THOMPSON/THE ASSOCIATED PRESS

Seattle’s $15 minimum wage debate will likely be resolved at the November ballot. Although Seattle Mayor Ed Murray would like to avoid ballot battles, activists associated with the group, 15 Now, are already gathering signatures. They say if the mayor and City Council fail to adopt a wage hike they like, they’ll take it to the voters.

Last week, Murray said he wanted a supermajority recommendation from the 24-member committee he appointed to address the issue. He thinks broad support from the advisory group would demonstrate that its proposal is right for the city, making dueling initiatives unnecessary.

That seems improbable. While the committee includes business, labor, nonprofits and council members, participation in the discussion presupposed willingness to compromise. For many on both sides, compromise is capitulation.

What Seattle does matters statewide. So far, no one has devised a containment strategy to prevent Seattle politics from spreading. It’s not Vegas. What happens in Seattle doesn’t stay in Seattle.

Last week, Murray outlined six principles on which a thin majority of his committee agrees: $15 is the right number; the increase should be phased in for small businesses and nonprofits; once reached it should be adjusted for inflation; everyone pays – no exemptions; there needs to be an enforcement plan; and credit for some benefits should be phased out as higher wages phase in.

The principles are fuzzy. Here’s what’s clear: The mayor and most members of his committee want to get to a $15 citywide minimum wage quickly, they want it to affect everyone and they will create a new enforcement system to assure compliance.

It remains complicated. Does $15 include tips and other benefits? How small is a small business? How long a phase-in? What’s enforcement entail?

Although business groups sensibly argue that the minimum wage should reflect total compensation, union and progressive activists reject the idea. They contend it breaks with the state’s existing minimum wage law. Washington is one of seven states without a tip credit. Socialist city councilmember Kshama Sawant, channeling Gertrude Stein’s thoughts on a rose, says, “Wages are wages are wages.”

A sharp increase in the minimum will cause some businesses to control costs by cutting other benefits, leaving some employees worse off. Wages spent on health care or education won’t be available for groceries.

Despite the presence of business members on Murray’s committee, the Seattle process has had a consistent get-it-done slant. There’s scant acknowledgment that an unprecedented 60 percent minimum wage increase will lead to job losses, business closures and relocations.

To study the effects, the city hired a prominent labor economist who supports raising the wage. The mayor’s minimum wage symposium resembled a campus teach-in, with proselytization disguised as education. No skeptical economists were invited to participate. Nothing was permitted to disrupt the narrative.

Yet, economists generally agree that raising the minimum wage leads to downsizing and slower hiring. The larger the wage jump, the greater the job loss. Some believe the positive effects of higher wages outweigh the negative impacts on employment. It’s a worthwhile debate, one the city has largely bypassed as officials attempt to fine-tune negotiations leading them to their pre-ordained destination.

This is where a columnist generally inserts a paragraph saying the advocates are well intentioned, but that their strategy is flawed. I’m disinclined. The advocacy has been too strident, too one-sided for that. The most aggressive advocates deny even the possibility of adverse consequences. That they know better, or should, calls their intentions into question.

Murray says he worries about a “class war” if a satisfactory compromise eludes the committee. The 15 Now ballot measure prescribes $15 for all and a three-year phase-in for small business and nonprofits, defining small as fewer than 250 employees. No committee compromise will go that far.

Sawant wants the conflict.

“We live in a capitalist system. It is class warfare,” she said, as she recycled rhetorical assaults on the 1 percent.

That’s inaccurate and recklessly provocative. Civic and business leaders in Seattle have worked in good faith, arguably against their own self-interest, to increase opportunities and compensation for low-wage workers. Those efforts should not be held hostage to the demands of a small group of militant activists.

Bainbridge Island resident Richard S. Davis is president of the Washington Research Council. Email him at rsdavis@simeonpartners.com.

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