You have to credit the 15 Now Tacoma folks. With the threat of a radical ballot initiative, they’ve forced the capitalist running dogs of Tacoma — i.e., the City Council and Chamber of Commerce — to scramble for an alternative that will undoubtedly involve raising the minimum wage in the city.
The council more or less had to play into their hands.
The initiative, if passed, would move the current $9.47-an-hour minimum to $15 as soon as the measure is certified at the beginning of 2016. Were that to happen, Tacoma would be immortalized as a textbook case of utopian economics run amok.
A big chain like Walmart, a stock villain in the 15 Now Tacoma campaign, could probably handle the impact of a sudden 58 percent rise in the wage floor. But hundreds of the city’s small employers could no longer do business as usual. Some would fold; some would move to Lakewood, University Place or Fife; some would reduce hours, lay off employees or cut benefits to comply with the initiative.
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15 Now Tacoma demonstrates about as much empathy for small businesses as Mao Zedong did. Its initiative even threatens employers with felony charges. But the proletariat would suffer, too. A lot of workers would wind up with $0.00 an hour, which is what you earn when you have no job.
This isn’t to say the minimum wage can’t be raised. It can — but judiciously, and with a degree of economic literacy.
That should be the goal of the Minimum Wage Task Force authorized by the City Council last week and appointed by Mayor Marilyn Strickland on Tuesday. The advisory group consists largely of people who represent businesses, unions and nonprofits.
There’s enough talent in this group to produce a competing ballot measure that will provide a choice between Santa Claus and what’s possible.
Seattle is the obvious precedent. Its City Council — also under pressure from radicals — adopted an elaborate multiyear phase-in of a $15 minimum wage. It gave nonprofits and smaller businesses more time to adapt; it also offered some relief to businesses that were providing health care benefits.
Tacoma’s task force and City Council shouldn’t feel compelled to replicate Seattle’s plan. There’s nothing magical about $15.
Before the Seattle City Council enacted its ordinance, it commissioned the Evans School of Public Affairs at the University of Washington to do a study of the potential impact. The contents of the UW report got little public attention, but the researchers reached an important conclusion: An increase of the minimum wage to $12.12 would cut Seattle’s poverty rate three-quarters as much as increasing it to $15.
In other words, a 30 percent increase produces 75 percent of the results. The UW group hadn’t even factored in any loss of work resulting from the $15 minimum.
The loss of government assistance is one reason the effect on poverty quickly starts to fade. Low-wage workers lose food stamps and other public benefits as their pay rises — again assuming they hang on to their jobs.
Tacoma voters are generally sensible. Some would vote for an immediate increase to $15; it’s not likely most would. An alternative that isn’t designed to punish employers would ensure that economic reality will prevail.