As President Barack Obama fights Congress to raise the federal minimum wage to $10.10 an hour, Seattle and the state of California are demonstrating how it’s done, with both of them taking significant action to raise their minimum wages far beyond the rest of the nation.
The city of Seattle is celebrating the passage Monday night of a City Council measure gradually raising its minimum wage to $15 over the next several years, which would be the highest in the nation.
Meanwhile in California, whose municipality of San Francisco currently has the nation’s highest minimum wage at $10.74 an hour and who last year raised the state minimum to $10, the state Senate approved a measure last Thursday lifting the minimum to $13 by 2017.
In Seattle, City Council member Kshama Sawant, who is a socialist, called on the nation after the meeting to elect more independent and socialist candidates and spread the push for a higher minimum wage across the nation.
“Seattle may be a hippie city. We may wear socks with our sandals,” but it’s also a city where different progressive groups can work together to bring about change, Sawant said.
“We did it. Workers did this,” Sawant said, according to The Associated Press. “We need to continue to build an even more powerful movement.”
Seattle Mayor Ed Murray was elected last year on a campaign promise to raise the minimum wage to $15.
“Seattle wants to stop the race to the bottom in wages” and address the “widening gap between the rich and the poor,” council member Tom Rasmussen said after the vote.
But the measure wasn’t universally endorsed, as the International Franchise Association, a Washington, D.C.-based business group that represents franchise owners, announced that it would sue to stop the ordinance.
“The City Council’s action today is unfair, discriminatory and a deliberate attempt to achieve a political agenda at the expense of small franchise business owners,” the group said in a statement.
The details of the measure say it would take effect on April 1, 2015, phased in at different points depending on the size of the business. Businesses with more than 500 employees nationally get at least three years to phase in the increase, while those providing health insurance will have four years to complete the move and smaller businesses will get seven years.
The measure was championed by an advisory group of labor, business and nonprofit representatives convened by Murray.
While Minnesota earlier this year raised its minimum wage by more than $3, to $9.50, by 2016, Connecticut and Maryland also have passed laws increasing their respective wages to $10 or more in coming years.
According to the bill passed in the California Senate, the state would raise the minimum wage to $11 in 2015, $12 in 2016 and $13 by 2017. In 2018 there would be additional adjustments annually for inflation.
“No one should be working full time and living in poverty,” the bill’s sponsor, state Sen. Mark Leno of San Francisco, said. “Even with our increase last year, Californians will still be paid poverty wages and qualify for public assistance.”
According to Leno, his bill would benefit 7.9 million Californians who make the minimum wage and, therefore, live in poverty, depending on social welfare programs to survive. That means taxpayers are “subsidizing the largest corporations paying these poverty wages,” he said.
But the California Chamber of Commerce called the bill a “job killer.”
“The minimum wage is meant to be an entry-level wage,” said state Sen. Tom Berryhill, R-Modesto, who voted against the measure. “It’s for kids, summer jobs.”
But Leno countered that 75 percent of Californians who earn minimum wage are adults. He pointed to his city of San Francisco, which has the nation’s highest minimum wage at $10.74 but still has the lowest unemployment in California.
Earlier this year Obama signed an executive order setting a minimum wage of $10.10 per hour for workers under federal contracts.
“I’m eager to work with all of you. But America does not stand still — and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do,” he said when he signed the order. “To every mayor, governor and state legislator in America, I say, you don’t have to wait for Congress to act; Americans will support you if you take this on. And as a chief executive, I intend to lead by example. Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover. We should too.”
If the minimum wage were raised to $10.10 an hour, which is where congressional Democrats and Obama would like to see it go, it could reduce total employment by 500,000 workers by the second half of 2016, according to a report released earlier this year by the Congressional Budget Office. But the CBO said it would also lift 900,000 families out of poverty and increase the average weekly incomes of 16.5 million low-wage workers.
In the report, the CBO did acknowledge that its calculation is an estimate, which means actual job losses could range from “very slight” to as many as 1 million positions.
“The increase in the minimum wage would have two principal effects on low-wage workers,” the CBO said in the report. “The large majority would have higher wages and family income, but a much smaller group would be jobless and have much lower family income.”
While Democrats seized on the numbers lifted out of poverty as a reason to embrace the proposal, the White House took the unusual step of disputing some of the CBO analysis.
