Tacoma’s ballot gives citizens a unique opportunity this fall — the chance to stick a shiv into their own city’s small employers.
Voters should see through the false promises of the 15 Now movement and vote against Initiative 1. The question here isn’t whether to raise the minimum wage; it’s how to do it. Pushing Tacoma’s minimum from $9.47 an hour to $15 almost overnight is how not to do it.
A far better choice is Initiative 1B, an alternative the Tacoma City Council put on the ballot as a counter to Initiative 1. This measure would raise the wage floor — in measured steps — to $12 on Jan. 1, 2018, and adjust it for inflation in following years.
The logic behind 15 Now resembles a fairy tale: The king wants happy people, so he orders an end to poverty. The law decrees wealth; the commoners’ pockets are filled; stores sell more stuff, and all rejoice forever after.
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It’s magical thinking. An abrupt 58 percent jump in the minimum wage would produce a slew of unintended and unhappy consequences. Serious economists (outside Marxist circles, anyway) warn that a sudden increase of such magnitude would shrink or kill some businesses, drive others away and deter new enterprises from moving in.
Low-wage workers — the very people the wage floor is supposed to protect — would likely suffer the most. There would be some winners among them, but many losers. A $15-an-hour wage translates into a $0.00-an-hour wage if your employer can’t afford to keep you on the payroll.
This scenario isn’t a boogeyman of corporate bosses. Last year, the Congressional Budget Office — a strictly nonpartisan outfit — concluded that raising the federal minimum wage from $7.25 to $10.10 could eliminate from 500,000 to 1 million jobs across the nation.
That’s not necessarily an argument against going to $10.10, but it is an argument against going there in a single leap. In the case of Initiative 1, the city would go to $15 in a single leap. The CBO didn’t analyze that prospect, perhaps because it was beyond the pale of reason.
The $15 proposal is also a blunt instrument.
It may seem counter-intuitive, but many workers who make less than $15 an hour live in middle-class households. They may be teenagers on their first job, for example, or second-income earners who work in a low-paying nonprofit agency because they love the cause. They don’t need a one-size-fits-all wage mandate.
A much smarter way to help the actual working poor would be to expand the federal earned income tax credit, which provides income to people who are holding down jobs yet living at poverty’s edge.
Washington has a state-level equivalent, the Working Families Tax Rebate, which has never been funded.
Tax credits have several advantages over whopping minimum wage increases:
▪ They reach all the poor — in Yakima, Hoquiam and Lakewood, not just in Seattle or Tacoma.
▪ They don’t disqualify struggling families from public assistance programs linked to earnings.
▪ They aren’t accidental middle-class entitlements.
▪ They also spread the burden of poverty relief rationally, across society, rather than foisting it disproportionately on small-business owners (who themselves are often far from affluent).
Initiative 1 wouldn’t lay waste to Tacoma’s economy, but it would do damage, especially in households of modest means. Initiative 1B is the rational alternative.
There’s a world of difference between them.