minimum wage

LA and the $15 minimum wage: It all started accidentally at a Washington airport

David Rolf, International Vice President of the Service Employees International Union, stands in his downtown Seattle office. Rolf led the campaign to bring a $15 minimum wage to Seatac, Washington in 2013.; Credit: Ben Bergman/KPCC

Ben Bergman

As Los Angeles mulls a law that would raise the minimum wage above the current California minimum of $9 an hour, it's the latest city to jump on a trend that started as the by-product of a failed labor negotiation in the state of Washington.

The first city to enact a $15-per-hour minimum wage was SeaTac, Wash., — a tiny airport town outside Seattle. "SeaTac will be viewed someday as the vanguard, as the place where the fight started," the lead organizer of SeaTac's $15 campaign, David Rolf, told supporters in November 2013 after a ballot measure there barely passed.

Rolf never set out to raise SeaTac’s minimum wage, much less start a national movement. Speaking from a sparse corner office in downtown Seattle at the Service Employees International Union 775, which he founded in 2002, Rolf told KPCC that his original goal in 2010 was to unionize workers at SeaTac airport.

When employers – led by Alaska Airlines — played hardball, Rolf put the $15 minimum wage on the ballot as leverage. “We had some polling in SeaTac that it could pass, but it was not at all definitive,” Rolf said.

That proved prescient: In a city of just 12,108 registered voters, Rolf's staff signed up around 1,000 new voters, many of them immigrants who had never cast a ballot. The measure won by just 77 votes.

It's an irony that the new law doesn't apply to workers at the center of the minimum wage campaign: The airport workers at SeaTac. That's because the Port of Seattle, which oversees the airport, challenged the initiative, arguing that the city's new minimum wage should not apply to the nearly 5,000 workers at the airport. A county judge agreed. Supporters of the $15 wage have appealed.

Still, Rolf said, "I think people are proud that that’s what happening. There are leaders of the movement in Seattle, including our mayor, that said shortly after the victory, 'Now we have to take it everywhere else.'"

The $15 minimum wage spread to Seattle last June and to San Francisco in November. 

Why $15 an hour?

The $15 figure first came to people’s attention in a series of strikes by fast food workers that started two years ago in New York. 

“I think it’s aspirational, and it provides a clean and easy-to-understand number," Rolf said. "You can debate whether it ought to really be $14.89 or $17.12, and based upon the cost of living in different cities, you could have a different answer. But in the late 19th and early 20th century, American workers didn’t rally for 7.9 or 8.1 hour working day. They rallied for an eight-hour day.”

“What’s really remarkable about social protest movements in American history is that the radical ideas of one group are often the common sense ideas of another group in a matter of a few years," said Peter Dreier, professor of politics at Occidental College.

Rolf is hopeful the $15 minimum wage can spread to every state. But Nelson Lichtenstein, Director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara, is skeptical.

“I don’t think having high wages in a few cities will mean it will spread to red state America,” he said. 

Lichtenstein said cities like L.A. have become more labor friendly, thanks largely to an influx of immigrants, but that’s not the case in the South. Oklahoma recently banned any city from setting its own minimum wage, joining at least 12 other states with similar laws, according to Paul Sonn, general counsel and program director at the National Employment Law Project.

In November, voters in four Republican-leaning states — Alaska, Arkansas, South Dakota, and Nebraska — approved higher minimum wages, but they weren’t close to $15.

A $15 dollar wage would have a much greater impact in Los Angeles than Seattle or San Francisco because the average income here is much lower than in those cities. Post-recession, income inequality has become much more of a concern for voters, which has made $15 more palatable, Sonn said.

This fall, the Los Angeles City Council enacted a $15.37 minimum wage for hotel workers that takes effect next year. A similar law has been in effect around LAX since 2007. 

But even though California cities have been allowed to set their own minimum wages for more than a decade, L.A. has never come close to doing so.

Until now.

This content is from Southern California Public Radio. View the original story at SCPR.org.




minimum wage

Why unions lead the $15 minimum wage fight, though few members will benefit

“Union members and non-union members have a strong interest in seeing our economy grow," said Rusty Hicks, the new head of the Los Angeles County Federation of Labor, which represents over 300 unions.; Credit: Ben Bergman/KPCC

Ben Bergman

Labor unions have led the fight to raise the minimum wage in several American cities, including Los Angeles, where the City Council is considering two proposals right now that would give raises to hundreds of thousands of workers (to $13.25 an hour by 2017 and $15.25 an hour by 2019).

But few of the unions' members have benefited directly from the initiatives. So why do unions care about a $15 wage for non-union workers? 

It’s part of a long-term strategy to protect the interests of their members, labor leaders say. They also see an opportunity to raise the profile of unions after years of falling membership.

"We can’t be the movement that’s just about us," said David Rolf, an international vice-president of SEIU, who led the first successful $15 minimum wage campaign in SeaTac, the town in Washington that is home to the region's similarly named airport. 

“We have to be the movement that’s about justice for all," Rolf added. "The labor movement that people flocked to by the tens of millions in the 1930s wasn’t known for fighting for 500-page contracts. They were known for fighting for the eight-hour day, fighting to end child labor.”

The idea that workers should earn $15 dollars an hour first came to the public’s attention during a series of fast food strikes that started in New York City in late 2012. Those workers didn’t just walk off the job by themselves. They were part of a campaign organized by unions, led by SEIU, which is made up mostly of public sector and health care workers.

$10 million fast-food strikes

The Service Employees International Union spent $10 million dollars on the fast food strikes, according to The New York Times. But none of those restaurants have unionized, and because it’s been so hard to form private sector union these days, they probably never will, said labor historian Nelson Lichtenstein.

“In effect what you have now is the SEIU – its hospital membership or its members working at the Department of Motor Vehicles – helping to raise the wages of fast food workers, but not their own wages,” Lichtenstein said.

That's because unionized workers earn far more than the current or proposed new minimum wages, in L.A. an average of more than $27 an hour, according to UCLA's Center for Research on Employment and Labor. 

The spread of the $15 minimum wage from SeaTac to Seattle to San Francisco — and now possibly Los Angeles — is a huge victory for labor unions, but it’s unlikely most of the people getting raises will ever be part of organized labor.

Still, the rank and file seem to support their unions' efforts.

“I personally support using our organization as a way to advocate for those who don’t have a voice," said Rafael Sanchez III, a teacher's assistant at Bell High School who's a member of SEIU Local 99. 

A challenging time for the labor movement

In the 1950’s, about one in three American workers belonged to a union. Last year, just 11 percent did – or 6 percent of private sector workers – the lowest numbers in nearly a century.

Rolf says the minimum wage campaigns mark a change in tactics for organized labor; Rather than the shop floor, the focus is on the ballot box and city hall.

“Since at least the 1980s, winning unions in the private sector has been a Herculean task," Rolf said. "The political process provides an alternative vehicle.”

And an increasingly successful one. It was voters who approved the first $15 wage, in Washington state in 2013, and another one in San Francisco last year.  

In Los Angeles, the issue is before the city council. Mayor Eric Garcetti opened the bidding, proposing a raise of $13.25 on Labor Day before six council members countered with $15.25.

The Los Angeles County Federation of Labor – lead by Rusty Hicks — is pushing for the higher option.

“Union members and non-union members have an interest in seeing our economy grow," said Hicks. "You can’t continue to have a strong, vibrant economy if in fact folks don’t have money in their pockets.”

Other benefits for unions: A safety net and a higher floor

Some union members see a higher minimum wage as a safety net.

Robert Matsuda is a studio violinist represented by the American Federation of Musicians, part of the AFL-CIO. Even though he’s not working for the minimum wage now, he worries that may not last: He’s getting fewer and fewer gigs as more film and TV scoring is outsourced overseas.

“I might have to take a minimum wage job in the near future, so it might directly affect me,” said Matsuda.

There’s also a more tangible benefit for unions, says Nelson Lichtenstein, the labor historian: A higher minimum wage means a higher wage floor to negotiate with in future contracts.

“It’s one labor market, and if you can raise the wages in those sectors that have been pulling down the general wage level – i.e: fast food and retail – then it makes it easier for unions to create a higher standard and go on and get more stuff,” said Lichtenstein.

On Friday morning, union members will rally in front of Los Angeles City Hall, calling on the council to enact a $15.25 an hour minimum wage as soon as possible.

This content is from Southern California Public Radio. View the original story at SCPR.org.




minimum wage

Small Business Development Center breaks down how raising minimum wage may affect small businesses

Minimum wage is a complex issue for small businesses, says the Small Business Development Center in Binghamton.

The SBDC adds that, typically, small businesses have a close relationship with their employees and if they could pay them more originally, they would.

They add that they believe some business owners may have to pick up the slack in order to keep costs low.




minimum wage

Minimum wage increase by other means

The employer mandate provision included in the House Democrats' bill requires employers to either provide health insurance (with upto 72.5% of the premiums) to all employees or pay an additional payroll tax. Based on the average employer-based family plans cost...




minimum wage

$15 Minimum Wage For State Employees Gaining Traction

As many states are raising the minimum wage for state employees, Shannon Meade explains that minimum wage increases will differ based on where the employees are located.

Law360 Employment Authority

View (Subscription required.)




minimum wage

Minimum Wage Fight Is At An Inflection Point

Shannon Meade talks about how the pandemic has upended the labor market, pushing employees to realize the benefits of higher pay and forcing employers to offer better pay and flexibility.

Law360 Employment Authority

View (Subscription required.)




minimum wage

As costs rise, is an $18 minimum wage the new standard for pay debates?

Shannon Meade talks about states implementing minimum wage increases, increases in employers’ total compensation packages and the trend in “unretirements.”

HR Dive

View (Subscription required.)




minimum wage

States That Raise Minimum Wage May Counterbalance Inflation

Paul Piccigallo talks about considerations for employers when raising minimum wage in the midst of rising inflation.

SHRM Online

View (Subscription required.)




minimum wage

Michigan Supreme Court Clarifies Minimum Wage & Tipped Rates and Schedule for 2025 and Future Years

On September 18, 2024, at the request of the State of Michigan and its attorney general, the Michigan Supreme Court clarified issues relating to future minimum wage rates and minimum cash wage rates for tip-credit employees stemming from an earlier opinion.




minimum wage

California Health Care Employers Must Implement California Health Care Minimum Wage Raise By October 16, 2024

Last fall, California enacted Senate Bill 525, which substantially raises the base minimum wage for health care workers over time to $25 per hour.  The first incremental increase above the general state minimum wage was scheduled to occur on June 1, 2024.  However, there were several delays and amendments to the law due to its impact on the California budget.  After the last delay in late June, health care employers did not have a clear answer t




minimum wage

In Advance of July 1 Compliance Deadlines, Chicago Agency Posts Updated Guidance and Notices for the City’s Minimum Wages, Paid Leave, Fair Workweek Thresholds, and Required Notices

The Chicago Department of Business Affairs and Consumer Protection (BACP) Office of Labor Standards (COLS) recently posted updates to its website regarding minimum wage obligations, paid leave and paid sick and safe leave, new fair work week thresholds, and updated required labor notices. The compliance deadline for these obligations is July 1, 2024.




minimum wage

Bracing for Impact if California Voters Approve Statewide Minimum Wage Increase

At the November 5, 2024 election, California voters will determine the fate of Proposition 32, which proposes to increase the state minimum wage and provide for automatic future adjustments tied to inflation.




minimum wage

Why You Haven’t Heard More About The Minimum Wage This Election Season

Shannon Meade says wage legislation on the hill has consistently failed and stalled in Congress, so states have been stepping up to fill the void.

Forbes

View (Subscription required)




minimum wage

‘We are changing the future:’ Disney World workers approve contract for $18 minimum wage

Disney’s lowest-paid full-time workers will earn at least $18 an hour this year under a contract union members overwhelmingly approved Wednesday.




minimum wage

Is the minimum wage enough to make ends meet where you live?

Minimum wage is going up in some provinces across the country, but is it enough to combat rising inflation?



  • Radio/Cross Country Checkup

minimum wage

Minimum Wage increases January 1st

Minimum Wage increases January 1st Wilmington, DE. December 18, 2018– Minimum wage will be increasing for most individuals in Delaware twice in 2019. On January 1, it will be $8.75 and then on October 1, it will be $9.25. But, for the first time in Delaware history, we will now have a multi-tiered minimum wage. […]




minimum wage

Brits warned as spreading condition affecting young people earning above minimum wage



New research has revealed a growing mental phenomena sweeping the UK, which may only affect those with a certain income




minimum wage

Bolt drivers win right to holiday and minimum wage

Thousands of drivers on ride-hailing and food delivery app Bolt have won a legal claim to be classed as workers.




minimum wage

Delhi CM Atishi announces hiked minimum wage for unorganised sector workers

Delhi Chief Minister Atishi on Wednesday announced Rs 18,066 in minimum wage for unskilled, Rs 19,929 for semi-skilled, and Rs 21,917 for skilled workers in the unorganised sector.




minimum wage

The regional effects of Germany's national minimum wage [electronic journal].




minimum wage

Minimum Wage Employment Effects and Labor Market Concentration [electronic journal].

National Bureau of Economic Research




minimum wage

Do Lower Minimum Wages for Young Workers Raise their Employment? Evidence from a Danish Discontinuity [electronic journal].




minimum wage

Changing the Structure of Minimum Wages: Firm Adjustment and Wage Spillovers [electronic journal].




minimum wage

HR e-briefing 414 - National Minimum Wage increases

After a delay of some two months from the usual release date, the National Minimum Wage (NMW) hourly rates that will apply from 1 October 2009, have been announced today, as follows: Workers aged 22 and over: £5.80 (up from the current &pou...




minimum wage

1st OECD/IZA World of Labor Seminar: Minimum Wages – Impacts and Institutional Processes - 17 November 2014

Joint Seminar on "Minimum Wages – Impacts and Institutional Processes"




minimum wage

Focus on Minimum wages after the crisis: Making them pay (PDF, 12-pages)

Three out of four OECD countries use minimum wages, and supporting low-wage earners is widely seen as important for promoting inclusive growth. This policy brief considers three aspects that are central for a balanced assessment of policy choices: The cost of employing minimum-wage workers, their take-home pay, and the number of workers affected.




minimum wage

LA and the $15 minimum wage: It all started accidentally at a Washington airport

David Rolf, International Vice President of the Service Employees International Union, stands in his downtown Seattle office. Rolf led the campaign to bring a $15 minimum wage to Seatac, Washington in 2013.; Credit: Ben Bergman/KPCC

Ben Bergman

As Los Angeles mulls a law that would raise the minimum wage above the current California minimum of $9 an hour, it's the latest city to jump on a trend that started as the by-product of a failed labor negotiation in the state of Washington.

The first city to enact a $15-per-hour minimum wage was SeaTac, Wash., — a tiny airport town outside Seattle. "SeaTac will be viewed someday as the vanguard, as the place where the fight started," the lead organizer of SeaTac's $15 campaign, David Rolf, told supporters in November 2013 after a ballot measure there barely passed.

Rolf never set out to raise SeaTac’s minimum wage, much less start a national movement. Speaking from a sparse corner office in downtown Seattle at the Service Employees International Union 775, which he founded in 2002, Rolf told KPCC that his original goal in 2010 was to unionize workers at SeaTac airport.

When employers – led by Alaska Airlines — played hardball, Rolf put the $15 minimum wage on the ballot as leverage. “We had some polling in SeaTac that it could pass, but it was not at all definitive,” Rolf said.

That proved prescient: In a city of just 12,108 registered voters, Rolf's staff signed up around 1,000 new voters, many of them immigrants who had never cast a ballot. The measure won by just 77 votes.

It's an irony that the new law doesn't apply to workers at the center of the minimum wage campaign: The airport workers at SeaTac. That's because the Port of Seattle, which oversees the airport, challenged the initiative, arguing that the city's new minimum wage should not apply to the nearly 5,000 workers at the airport. A county judge agreed. Supporters of the $15 wage have appealed.

Still, Rolf said, "I think people are proud that that’s what happening. There are leaders of the movement in Seattle, including our mayor, that said shortly after the victory, 'Now we have to take it everywhere else.'"

The $15 minimum wage spread to Seattle last June and to San Francisco in November. 

Why $15 an hour?

The $15 figure first came to people’s attention in a series of strikes by fast food workers that started two years ago in New York. 

“I think it’s aspirational, and it provides a clean and easy-to-understand number," Rolf said. "You can debate whether it ought to really be $14.89 or $17.12, and based upon the cost of living in different cities, you could have a different answer. But in the late 19th and early 20th century, American workers didn’t rally for 7.9 or 8.1 hour working day. They rallied for an eight-hour day.”

“What’s really remarkable about social protest movements in American history is that the radical ideas of one group are often the common sense ideas of another group in a matter of a few years," said Peter Dreier, professor of politics at Occidental College.

Rolf is hopeful the $15 minimum wage can spread to every state. But Nelson Lichtenstein, Director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara, is skeptical.

“I don’t think having high wages in a few cities will mean it will spread to red state America,” he said. 

Lichtenstein said cities like L.A. have become more labor friendly, thanks largely to an influx of immigrants, but that’s not the case in the South. Oklahoma recently banned any city from setting its own minimum wage, joining at least 12 other states with similar laws, according to Paul Sonn, general counsel and program director at the National Employment Law Project.

In November, voters in four Republican-leaning states — Alaska, Arkansas, South Dakota, and Nebraska — approved higher minimum wages, but they weren’t close to $15.

A $15 dollar wage would have a much greater impact in Los Angeles than Seattle or San Francisco because the average income here is much lower than in those cities. Post-recession, income inequality has become much more of a concern for voters, which has made $15 more palatable, Sonn said.

This fall, the Los Angeles City Council enacted a $15.37 minimum wage for hotel workers that takes effect next year. A similar law has been in effect around LAX since 2007. 

But even though California cities have been allowed to set their own minimum wages for more than a decade, L.A. has never come close to doing so.

Until now.

This content is from Southern California Public Radio. View the original story at SCPR.org.




minimum wage

Why unions lead the $15 minimum wage fight, though few members will benefit

“Union members and non-union members have a strong interest in seeing our economy grow," said Rusty Hicks, the new head of the Los Angeles County Federation of Labor, which represents over 300 unions.; Credit: Ben Bergman/KPCC

Ben Bergman

Labor unions have led the fight to raise the minimum wage in several American cities, including Los Angeles, where the City Council is considering two proposals right now that would give raises to hundreds of thousands of workers (to $13.25 an hour by 2017 and $15.25 an hour by 2019).

But few of the unions' members have benefited directly from the initiatives. So why do unions care about a $15 wage for non-union workers? 

It’s part of a long-term strategy to protect the interests of their members, labor leaders say. They also see an opportunity to raise the profile of unions after years of falling membership.

"We can’t be the movement that’s just about us," said David Rolf, an international vice-president of SEIU, who led the first successful $15 minimum wage campaign in SeaTac, the town in Washington that is home to the region's similarly named airport. 

“We have to be the movement that’s about justice for all," Rolf added. "The labor movement that people flocked to by the tens of millions in the 1930s wasn’t known for fighting for 500-page contracts. They were known for fighting for the eight-hour day, fighting to end child labor.”

The idea that workers should earn $15 dollars an hour first came to the public’s attention during a series of fast food strikes that started in New York City in late 2012. Those workers didn’t just walk off the job by themselves. They were part of a campaign organized by unions, led by SEIU, which is made up mostly of public sector and health care workers.

$10 million fast-food strikes

The Service Employees International Union spent $10 million dollars on the fast food strikes, according to The New York Times. But none of those restaurants have unionized, and because it’s been so hard to form private sector union these days, they probably never will, said labor historian Nelson Lichtenstein.

“In effect what you have now is the SEIU – its hospital membership or its members working at the Department of Motor Vehicles – helping to raise the wages of fast food workers, but not their own wages,” Lichtenstein said.

That's because unionized workers earn far more than the current or proposed new minimum wages, in L.A. an average of more than $27 an hour, according to UCLA's Center for Research on Employment and Labor. 

The spread of the $15 minimum wage from SeaTac to Seattle to San Francisco — and now possibly Los Angeles — is a huge victory for labor unions, but it’s unlikely most of the people getting raises will ever be part of organized labor.

Still, the rank and file seem to support their unions' efforts.

“I personally support using our organization as a way to advocate for those who don’t have a voice," said Rafael Sanchez III, a teacher's assistant at Bell High School who's a member of SEIU Local 99. 

A challenging time for the labor movement

In the 1950’s, about one in three American workers belonged to a union. Last year, just 11 percent did – or 6 percent of private sector workers – the lowest numbers in nearly a century.

Rolf says the minimum wage campaigns mark a change in tactics for organized labor; Rather than the shop floor, the focus is on the ballot box and city hall.

“Since at least the 1980s, winning unions in the private sector has been a Herculean task," Rolf said. "The political process provides an alternative vehicle.”

And an increasingly successful one. It was voters who approved the first $15 wage, in Washington state in 2013, and another one in San Francisco last year.  

In Los Angeles, the issue is before the city council. Mayor Eric Garcetti opened the bidding, proposing a raise of $13.25 on Labor Day before six council members countered with $15.25.

The Los Angeles County Federation of Labor – lead by Rusty Hicks — is pushing for the higher option.

“Union members and non-union members have an interest in seeing our economy grow," said Hicks. "You can’t continue to have a strong, vibrant economy if in fact folks don’t have money in their pockets.”

Other benefits for unions: A safety net and a higher floor

Some union members see a higher minimum wage as a safety net.

Robert Matsuda is a studio violinist represented by the American Federation of Musicians, part of the AFL-CIO. Even though he’s not working for the minimum wage now, he worries that may not last: He’s getting fewer and fewer gigs as more film and TV scoring is outsourced overseas.

“I might have to take a minimum wage job in the near future, so it might directly affect me,” said Matsuda.

There’s also a more tangible benefit for unions, says Nelson Lichtenstein, the labor historian: A higher minimum wage means a higher wage floor to negotiate with in future contracts.

“It’s one labor market, and if you can raise the wages in those sectors that have been pulling down the general wage level – i.e: fast food and retail – then it makes it easier for unions to create a higher standard and go on and get more stuff,” said Lichtenstein.

On Friday morning, union members will rally in front of Los Angeles City Hall, calling on the council to enact a $15.25 an hour minimum wage as soon as possible.

This content is from Southern California Public Radio. View the original story at SCPR.org.




minimum wage

How To Be a Millionaire On Minimum Wage

Learn how to be a millionaire even if you are a minimum wage earner




minimum wage

Northern Illinois Mayors Expect Little Disruption From Minimum Wage Hike

The Mayors of DeKalb and Rockford responded to the statewide minimum wage hike that was signed into law last week. The measure will raise the state's minimum wage to $15 per hour by 2025. DeKalb Mayor Jerry Smith worries about the effect this may have on small businesses. Smith says he would have preferred that the increase be done more incrementally. "I would have liked to have seen something that was written into law that mandated perhaps a one or two year step, and then let's take a look at it," he said. "You know, economies change." But he says the law taking effect means businesses know what to expect. "If you know that you're going to be paying nine and a quarter next year and ten the following year, or whatever the case may be, the smart businesses -- small or large -- are going to make those adjustments that are necessary so the bottom line is still black," he said. Smith says the City of DeKalb already pays its employees at a level where the wage hike's effect on city




minimum wage

Workers say minimum wage increase is a good start

Workers say, while they welcome the 3% rise in the minimum wage, it is still not enough with rising costs.




minimum wage

Mayo Liberal federal election candidate Georgina Downer now says minimum wage 'about right'

The Coalition's candidate for the marginal South Australian seat of Mayo moderates her previous position that the minimum wage and penalty rates should be abolished.




minimum wage

Tika Shares A Story About Her First Minimum Wage Job



Tika talks about the effects of minimum wage rising.




minimum wage

High Minimum Wage And The Decline Of Stores

The incentive to automate will be enormous for $15 per hour minimum wage. Of America’s nearly 16 million retail workers, the biggest group — 4.6 million — are salespeople. Their average wage is $10.47 an hour. After that, the country has another 3.4 million cashiers, and their average wage is $9.28 an hour. Only a quarter of salespeople earn more than $14 — and only 10 percent earn more than $19. The figures are worse for cashiers. But in the race to automate there will be a clear winner: Amazon. Why: Amazon can automate more easily than can physical stores. It is analogous to why long haul trucking can be automated before taxis: Just as highways are simpler places than...





minimum wage

Dropouts Need Not Apply? The Minimum Wage and Skill Upgrading -- by Jeffrey Clemens, Lisa B. Kahn, Jonathan Meer

We explore whether minimum wage increases result in substitution from lower-skilled to slightly higher-skilled labor. Using 2011-2016 American Community Survey data (ACS), we show that workers employed in low-wage occupations are older and more likely to have a high school diploma following recent statutory minimum wage increases. To better understand the role of firms, we examine the Burning Glass vacancy data. We find increases in a high school diploma requirement following minimum wage hikes, consistent with our ACS evidence on stocks of employed workers. We see substantial adjustments to requirements both within and across firms.




minimum wage

Minimum wage views sought

The Minimum Wage Commission today launched an eight-week public consultation to review the statutory minimum wage rate.

 

The commission said it adopts an evidence-based approach in conducting the minimum wage rate review and will consider the community's views.

 

Views can be sent by email before June 16.

 

Click here for information.




minimum wage

Minimum wage report due Oct

The Minimum Wage Commission will submit to the Chief Executive in Council its recommendation report on the statutory minimum wage rate by the end of October at the latest.

 

In accordance with the Minimum Wage Ordinance, the Chief Executive has required the commission to submit its recommendation report on or before October 31.

 

Pursuant to the ordinance, the commission must maintain an appropriate balance between the objectives of forestalling excessively low wages and minimising the loss of low-paid jobs as well as the need to sustain the city's economic growth and competitiveness.

 

The commission is conducting a public consultation on the statutory minimum wage rate review.

 

Views can be sent by email before June 16.

 

Click here for the consultation details.




minimum wage

Migrant workers: House panel opposes move to cap minimum wages

The Centre’s bid to arrogate to itself the power to fix the wage floor for inter-state migrant workers in the name of uniformity across the country has hit a hurdle.




minimum wage

Commencement of the new National Minimum Wage Act, 2018

The highly anticipated new National Minimum Wage Act No. 9 of 2018 (“NMWA”) came into operation on 1 January 2019. It is important to note that section 17(4) of the NMWA, which provides that the application of the new minimum wage applie...




minimum wage

Oregon governor plans minimum wage hike

The minimum wage in Portland could increase to $15.52 an hour, and $13.50 an hour in the rest of the state, according to a plan unveiled by Oregon Governor, Kate Brown. Jillian Kitchen reports.




minimum wage

Biden calls for immediate $13 minimum wage increase for frontline workers

The apparent Democratic nominee called for an immediate $13 minimum wage increase for essential workers and criticized President Trump for viewing these front-liners as “disposable."




minimum wage

Designing Thoughtful Minimum Wage Policy at the State and Local Levels


Rising wage inequality and stagnant real wages have contributed to inequality in family incomes during the past three decades. While the expansion of the Earned Income Tax Credit (EITC) and the Supplemental Nutrition Assistance Program (SNAP) have helped mitigate the impact on low-income families (Bitler and Hoynes 2010), federal minimum wage policy has not contributed to the solution. The federal minimum wage has failed to keep pace with both the cost of living and the median wage in the labor market. As a consequence, working full-time at the minimum wage does not allow many families to escape poverty, or to attain economic self-sufficiency.

State and local governments can set minimum wages in excess of the statutory federal minimum wage. Indeed, state and local governments have played an important role in establishing minimum wages across the country; as a result, thirty-seven states had state minimum wages exceeding the federal level in 2007 prior to the most recent federal increase. Cities, too, have begun setting higher minimum wages, as evidenced by city-level wage minimums in Albuquerque, San Francisco, San Jose, Santa Fe, Seattle, and Washington, DC; other cities are actively exploring possibilities of raising minimum wages. 

In this policy memo, I propose a framework for effective state and local minimum wage policy. First, I propose using half the local-area median wage as an important gauge for setting an appropriate level of the minimum wage. Second, I propose that state and local governments take into account the local cost of living as a relevant consideration in setting a minimum wage, and I provide estimates of how state minimum wages would vary if they reflected cost-of-living differences. I also recommend the use of regional consumer price indexes (CPIs) to index the local minimum wage. Finally, I propose that cities and counties coordinate regional wage setting to mitigate possible negative effects of local mandates. 

The implementation of the state and local framework does not override the need for reform at the federal level. Thoughtful reforms to the federal minimum wage can help reduce poverty and mitigate inequality. The federal minimum wage has been the focus of substantial debate by academics and policymakers; this proposal focuses on state and local reforms that have received substantially less attention. These state and local reforms can be an important part of the policy portfolio for reducing the incidence of poverty and for helping low-income families support themselves as they strive toward the middle class. In particular, although the federal minimum wage serves as a floor in the labor market, there is some room for additional increases in higher-wage areas.

Downloads

Authors

  • Arindrajit Dube
Publication: The Hamilton Project
Image Source: Hero Images
     
 
 




minimum wage

Can we take the politics out of the federal minimum wage?


At 77 years of age, the federal minimum wage deserves a respite from the day-to-day combat of political life. Today, protestors around the country are demanding a $15 minimum. But few observers think this level is economically desirable: even fewer think that it is likely.

Democrats want a higher minimum, and say so loudly. Republicans of a free-market persuasion mostly do not—but tend to stay silent because they know that swing voters look positively at raising the wages of low-earners.

The minimum wage is lagging…

Congressional political stalemate has meant the U.S. wage floor has lagged behind median earnings. In contrast wage growth in other OECD countries has performed much better, as this graph produced by the Hamilton Project shows:

Advanced nations have de-politicized minimum wage decisions

The federal minimum wage is an established piece of the U.S. policy furniture—and one that is quite dated. It now makes sense to consider taking some of the power and responsibility for setting the wage rate out of the hands of politicians—just as interest rates are set by the Federal Reserve.

This is not a novel proposal in international terms. In most advanced economies, minimum wage decisions are not purely political. Out of 66 countries studied by Tito Boeri in 2009, 24 delegate the determination the minimum wage level to a tripartite body; 26 countries set the minimum wage after taking advice following formal consultation between the Government and representatives of employers and workers; and just 16 countries (including the U.S.) set the minimum wage through a simple legislative vote.

Over in the U.K., the Conservative Prime Minister David Cameron just jacked up the national minimum wage by 3% up to £6.70, with barely a squeak of protest from employers or the right wing of his own party. Why? Because, like his two predecessors, he simply followed the advice of the Low Pay Commission, which is comprised of nine commissioners—three each from trade unions, employer organizations and academia.

Two options for taking the political heat out of the U.S. minimum wage

Can the U.S. follow suit? And if it can, what might the new system look like? Two options at least are worth considering.

1. A Federal Minimum Wage Advisory Board. This could be made up (like the U.K. version) of nine members: three representatives of employer organizations, three from labor organizations, and three independent labor economists. The Board would recommend a rate for the national minimum wage each year, which would then be enacted by Congress in the usual manner. The Board would have a strong incentive to set a rate likely to be adopted by Congress, in order to establish and maintain its reputation: there is, after all, little point in sitting on a Board that is ignored. The Board’s recommendation would not be binding and would not become the legal ‘default’ level. But because the advice is likely to be sensible, Congress would likely be inclined to follow it.

2. Wage Indexation. An alternative—favored by my Brookings colleague Gary Burtless—would be to simultaneously raise the minimum wage and introduce automatic indexing, lifting the minimum wage at the same rate as either consumer prices or the median wage—preferably the latter. In effect, this would do for the minimum wage what President Nixon did for Social Security. Congress would have the power to suspend a rise—perhaps if unemployment reached a certain threshold—but the default position would be to link changes in the minimum wage to changes in the median wage or in the broader consumer economy.

Policy commitment devices in action

These are both examples of what I have called policy commitment devices—in a new paper, Ulysses Goes to Washington—that help to overcome political myopia in order to support longer-term policy objectives. In the first case, taking advice from an independent commission, the commitment is somewhat less binding, although as James Madison knew, ‘the counsels and checks of friends’ can carry plenty of weight. Indexation would be a tighter form of binding, since inaction on the part of politicians would lead to an uprating of minimum wage, rather than the current stasis.

For both sides, there are political attractions to sub-contracting some decision-making power over the minimum wage. By accepting the advice of an independent body or allowing indexation to do its silent work, Republicans can keep their business donors and right-wing critics at bay; Democrats can do the same for unions and the political left. Sometimes the most powerful thing politicians can do is give some power away. The minimum wage is now perhaps a case in point.

Image Source: © Brian Snyder / Reuters
      
 
 




minimum wage

Seattle’s Minimum Wage Is Now $15 an Hour: Is That a Good Idea?


The Seattle city council voted to push up the city’s minimum wage to $15 an hour. If the wage hike is fully implemented, it will guarantee Seattle’s workers the nation’s highest minimum wage. The increase in the minimum wage will be phased in over a number of years. Big employers that do not provide their employees a health plan are the first that will face the $15 per hour minimum, a requirement that will be fully phased in around 2017. Large employers who offer health benefits will have to pay the $15 minimum starting in 2018. Small businesses with employees who receive tip income will have to pay the $15 per hour minimum a couple of years later, but the countable wage will include employees’ tips. By 2021 all employers in the city must offer a minimum wage of $15 an hour, regardless of the employer’s size.

The federal minimum wage is currently just $7.25 an hour, unchanged since 2009. If Congress does not raise the national minimum wage, Seattle’s minimum will be more than twice the federal minimum wage. Many states currently have a higher minimum wage than the federal one. As it happens, Washington has the nation’s highest state-level minimum wage, $9.32 per hour. Unlike the federal minimum wage law, Washington’s state law increases the state minimum wage every year in line with changes in the consumer price index. By the time Seattle’s $15 per hour minimum becomes effective for large employers in 2017, the Washington state minimum wage will be about $10 per hour, assuming consumer prices continue to rise 2% a year. Thus, large employers in Seattle will have to pay their minimum-wage employees 50% more than minimum-wage employees receive outside the Seattle city limits.

I strongly favor the Administration’s proposal to boost the U.S. minimum wage to $10.10 an hour. It will boost the spendable incomes of millions of poorly paid workers and their families, and I expect it will have only a small adverse effect, if any, on low-wage workers’ job opportunities and work hours. However, I am more cautious about the wisdom of raising a single city’s minimum wage to $15 an hour when nearby jurisdictions leave their minimum wages unchanged.

One reason for my caution is that a big minimum-wage hike can place Seattle’s low-wage employers at a competitive disadvantage compared with employers engaged in the same line of business but located in a nearby suburb. If compensation costs for low-wage workers represent a big percentage of a Seattle employer’s costs, and if the employer faces competition from businesses on the other side of the city limits, companies located in Seattle can lose customers to competitors outside the city.

Consider a business that mainly sells low-cost, fast-food meals. If it must pay $15 an hour to its low-wage employees, while its competitors less than a mile away are only required to pay $10 an hour, the companies outside Seattle can charge lower prices to their customers for shakes, burgers, and fries, and yet still make a profit. The lower cost establishments can capture a larger percentage of the local fast-food trade, reducing fast-food sales inside Seattle’s city limits. The same is true of the goods and services sold by laundry and dry cleaning establishments, inexpensive motels, and other businesses that depend on low-wage workers to stay competitive. The labor cost disadvantage caused by a higher minimum wage can hurt low-wage employment in Seattle and possibly reduce the value of some of the city’s commercial real estate.

To the extent that consumers have the option of buying goods or services from companies that are not required to pay a higher minimum wage, some of the hoped-for gains from a higher minimum wage will be lost. When customers can conveniently buy products or services from firms that face lower labor costs, the new businesses that they patronize will grow and the old, high-cost businesses they abandon will shrink. Low-wage workers may earn higher wages inside the Seattle city limits, but their employment opportunities in Seattle may shrink.

Seattle is a prosperous city, and its mayor was elected in part because of a promise to boost the pay of its most poorly paid residents. If a $15 an hour minimum wage has a chance of working and enjoying broad political support, Seattle is a good place to test the idea. I will be interested to see whether low-wage Seattle businesses continue to prosper even after they are required to pay a minimum wage that is 50% higher than the one faced by competitors in nearby suburbs. The risk of a big minimum-wage hike at the city level is that the city’s low-wage employers will be harmed in their competition with out-of-town businesses that sell the same products or services. The risk of this kind of harm is vastly smaller when the minimum wage is increased at the state or national level. If the Administration can persuade Congress to boost the national minimum wage, all employers—inside and outside a city’s limits—will be required to raise the pay they offer to their most poorly paid workers.

Note: An edited version of this post appears on Fortune.com

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minimum wage

Class Notes: Minimum Wage and Children’s Health, College Regrades, and More

This week in Class Notes: Male students are significantly more likely than female students to ask for regrades in college. Higher minimum wages have large, positive effects on child health, with the greatest benefits between ages 1-5. The Social Security Annual Earnings Test reduces the employment rate of affected Americans by at least 1.2 percentage points. Our top chart shows…

       




minimum wage

How a rising minimum wage may impact the nonprofit sector


As the income inequality discussion continues to simmer across the country, municipal minimum wage ordinances have become hot topics of conversation in many cities. In January 2016, Seattle will implement its second step-up in the local minimum wage in 9 months, reaching $13 for many employers in the city and edging closer to a $15 an hour minimum that will apply to most firms by 2019. San Francisco will reach a $15 an hour minimum by July 2018. Yet cities as diverse as Birmingham, Chicago, Los Angeles, and Louisville have enacted or proposed similar minimum wage laws. It is too early to discern true impact of these local wage ordinances, but speculation abounds regarding whether or how the higher wage will affect firms and the earnings of low-wage workers.

Less prominent in debate and discussion about the minimum wage is the potential impact that higher minimum wage rates may have for nonprofit organizations. Nonprofits perform many critical functions in our communities—often serving the most at-risk and disadvantaged. Yet, fiscal constraints often place a low ceiling on what many nonprofits can pay frontline staff. As a result, many different types of nonprofit organizations—child care centers, home health care organizations, senior care providers—pay staff at rates near or below the targets set by the recent crop of local minimum wage laws. Our popular image of a minimum wage worker is the teen-age cashier at a drive-through window or the sales clerk at a retail store in the local strip mall, but many workers in these “helping professions” are being paid low wages.

Increases in the minimum wage are occurring at the same time that many nonprofit service organizations are confronted with fixed or declining revenue streams. Facing fiscal pressure, nonprofit service organizations may pursue one or more coping strategies. In addition to reductions in staffing or hours, commonly expected responses, nonprofits may cut back services offered, scale back service areas, or favor clients that can afford higher fees.

Such responses could reduce the amount and quality of the services provided to vulnerable populations. For example, elderly populations on fixed incomes may have fewer options for home care. Working poor parents may find higher child care costs prohibitively expensive. Employment service organizations may find it harder to place hard-to-serve jobseekers in jobs due to more competitive applicant pools.

At the same time, higher minimum wages could have positive consequences for nonprofit staffing and capacity. Higher wages could reduce employee turnover and increase staff morale and productivity. Organizations may not have to grapple with the contradiction of serving low-income persons, but paying modest wages.

The most recent set of wage ordinances take cities to unknown territory. Anticipating potential negative effects, Chicago has exempted individuals in subsidized employment programs from its recent minimum wage ordinance. The city of Seattle has set aside funds to help nonprofits meet the higher local minimum wage, but many nonprofit funding streams are beyond the city’s control and are not seeing similar adjustments.

In the coming years, more research on how local nonprofits are affected by local minimum wage laws needs to occur. We should expect there to be a mix of positive and negative effects within a particular nonprofit organization and across different types of organizations. Nonprofit organizations should be engaged as stakeholders in debates around higher local minimum wages. And, nonprofits should actively engage in research efforts to document the impact of higher wages. In particular, nonprofits should work to compile data that can compare staffing, service delivery, and program outcomes before and after wage laws phase-in. Such data could provide important insight into the impact of local wage ordinances.

We also should be careful not to confuse other challenges confronting the nonprofit sector with the impact of higher minimum wages. For example, private philanthropy to human service nonprofits has failed to keep up with rising need and declining public sector revenue streams in most communities—realities that may pose more serious challenges than minimum wage laws, but ones without an obvious scapegoat.

In the end, ongoing debate around local minimum wage ordinances should provide us with the opportunity to re-examine how we support community-based nonprofits as a society and assess whether that support fits with all that we expect the nonprofit sector to accomplish for children and families in our communities. 

Authors

Image Source: © Adnan1 Abidi / Reuters
     
 
 




minimum wage

Why people afraid of raising the minimum wage are missing the point

Less work doesn't have to be a bad thing.





minimum wage

Increases in Minimum Wages Primarily Did Not Affect Health Overall

In the decade-long absence of federal action, many states, counties and cities have increased minimum wages to help improve the lives of workers. While