Raise Our Wage

Boosting social justice one paycheck at a time

Wednesday, March 26, 2014

Kshama Sawant took a moment this week to distribute to her colleagues the latest data on the potential impacts of raising wage standards in Seattle. The verdict? There really isn’t any reliable, measurable economic impact that can’t be offset by other factors.

Sawant serves along with other members of Seattle City Council on the Select Committee on Minimum Wage and Income Inequality, which was formed to review a proposal to raise Seattle’s minimum wage. If approved by the full council later this spring, the legislation could boost the wage minimum in Seattle to $15 per hour. It’s an issue the 41-year old economics professor ran for office on in 2013, bumping a 16-year incumbent from the council to be become Seattle’s first elected Socialist.

“It is fitting in many ways that the Socialist campaign in Seattle, which has to make minimum wage absolutely the center of Seattle urban politics should also be speaking out in solidarity with farm workers in rural Washington to show that all these issues are connected,” Sawant said.

Sawant distributed data from University of California Berkeley economists Michael Reich and Ken Jacobs in advance of a symposium on income inequality the Berkeley researchers will attend in Seattle this week.

“One city we have studied in detail, San Francisco, has passed a dozen labor standards laws since the late 1990s,” the researchers said. “After adding the effects of other local laws mandating employers to pay for sick leave and health spending, the minimum compensation standard at larger firms in San Francisco reaches $13. Our studies show that the impact of these laws on workers’ wages (and access to health care) is strong and positive and that none of the dire predictions of employment loss have come to pass.

“That’s not the whole story, though. A full analysis must include the variety of other ways labor costs might be absorbed, including savings from reduced worker turnover and improved efficiency, as well as higher prices and lower profits. Modern economics therefore regards the employment effect of a minimum-wage increase as a question that is not decided by theory, but by empirical testing.”

The empirical testing should in fact be practice, Sawant believes.

Since the mid-1980s, states in every region of the country have raised the local minimum wage, often numerous times. Twenty-one states currently have wage floors above the federal level of $7.25, and 11 of these raise them every year to account for inflation. Washington State currently has the nation’s highest minimum wage, at $9.32.

It hasn’t hurt Washington. In fact, it may have even helped the state’s competitiveness in the labor market.

“When Washington residents voted in 1998 to raise the state’s minimum wage and link it to the cost of living, opponents warned the measure would be a job-killer. The prediction hasn’t been borne out,” Bloomberg News reports.

“In the 15 years that followed, the state’s minimum wage climbed to $9.32—the highest in the country. Meanwhile job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate. Payrolls at Washington’s restaurants and bars, portrayed as particularly vulnerable to higher wage costs, expanded by 21 percent. Poverty has trailed the U.S. level for at least seven years.”

More than 120 cities and counties have adopted living wage laws that set pay standards, many of them in the $12 to $15 range. These higher standards usually apply—as they do in Bellingham—only to employees of city service contractors. The economic reach of these “living wage initiatives” rarely reach the broader low-wage labor market.

“The fact that Washington State pays the highest minimum wage in the nation is an indication not of the lavishness of wages in Washington State,” Sawant explained, “but an indicator of how abysmally poor the minimum wage is in other states. In fact, it is absolutely fitting and consistent, given the history of Washington State fighting for workers, that we should be one of the leading voices nationally pursuing a $15 hour minimum wage.”

Cascadia Weekly: Tell me about the data you shared this week with your colleagues on Seattle City Council.

Kshama Sawant: Yes, I shared an article with other council members that was published in the New York Times in Sunday. It was authored by two labor economists who have been studying the impacts of minimum wage increases in various municipalities around the country for well over a decade.

I shared the article because a lot of our elected officials, while they have expressed support for a $15 per hour minimum age, they haven’t heard much in the way of staking out a more concrete position on the consequences of that. I wanted to make sure they understand that there is no shortage of data and economic analysis around the question of minimum wage. This issue and the outcome of this initiative will not be based on the data, but on the political balance of forces—how is business going to pressure elected officials in city government, and how much pressure will workers apply to this issue.

I’m an economist myself, and minimum wage and poverty is something I’ve studied. But I wanted to stress that the message of economists who have studied this is that there is no real theory that you can use as a guide to decide to raise wages. What you can do is have an empirical analysis—“look, here is what happened in cities when wages were raised.” And the data indicates very decisively that price increases were minuscule in comparison the improvement in standards of living workers received from improved wages.

All these fears that businesses have that a wage increase will create widespread unemployment, widespread teenage unemployment, unemployment among skilled workers—there is no indication in the data that suggests any of these scenarios come into being if minimum wages go up.

CW: A large part of our economy in rural Whatcom County is in farm labor, of which a large portion of that is seasonal and migrant labor. How might an increase in minimum wages in a metropolitan area like Seattle influence wage policy in other areas of the state?

KS: Many of these battles people are fighting against injustice are not isolated battles. They demonstrate how we’re all facing different kinds of oppression—rural workers, urban workers—some of the issues are different but they are coming from the same systems of oppression of workers. It is fitting in many ways that the Socialist campaign in Seattle, which has to make minimum wage absolutely the center of Seattle politics should also be speaking out in solidarity with farm workers in rural Washington to show that all these issues are connected.

What history shows is that when one section of the working class loses its fears and starts working in a concerted way, organizing politically for social change—even if that political struggle is local as it is in Seattle—when one group of the working class rises up and wins victories on their political demands, that has a tremendous impact on workers and social justice activists in neighboring areas.

In fact, you can already see how fast food workers in New York City—who organized and took the lead, walking out last November and December 2012 in pursuit of higher wages—how that action triggered a national debate on the minimum wage. That was immediately followed by an initiative to raise the minimum wage in the City of Sea-Tac, and I believe it had an effect in getting a Socialist who advocates for a $15 minimum wage getting elected to Seattle City Council in November. All of this has created a tremendous churning of consciousness, where people are beginning to say, “This is something we need in our community.”

I can’t tell you how many email and messages I get where people say, “We need a Socialist on our city council, too!” To which, I respond, “We absolutely need this everywhere, but what we really need is for workers in their own cities to fight for demands that result for improvements in the standard of living.

For farm workers, I would say if we succeed in raising wages in Seattle, it may be a shot in the arm for workers everywhere. I hope it will create a sense of empowerment that people’s lives are worth fighting for.

We need to stand together.

CW: Yet there is always a divide-and-conquer element at work in our discussions of labor—organized Labor versus opportunity labor, food workers versus field workers. But where we strongly see this division is on the subject of immigrant labor, both guest workers and undocumented workers.

KS: Yes. Tied to all of this, is also the fight for immigrant rights and a path for citizenship—the fight against deportations and the separation of children from their families, the fight for rehabilitation of people who have arrived without documents, against exploitative guest worker programs. All of this are connected to our fight for economic rights, and you cannot separate one from the other.

We must make it clear that the only way we will  be able to have successes for individuals is if we build a solidarity among all workers, regardless of race or gender or origin. It is important for American-born workers to speak out in favor of the rights of immigrant workers as well, and perhaps that is a conversation you can have in your community.

CW: We have a dual problem at work in this country, do we not, where wages have been stagnant in the United States for some time, yet at the same time we have a huge and growing disparity of wealth concentrated in upper incomes. To what extent are these trends related?

KS: I believe those two trends in tandem are central to everything we are talking about.

In fact, a lot of what we’re seeing today—the political struggles that we are seeing around the country, including Seattle—you can trace back to the Occupy movement in 2011. A lot of political pundits have written off the Occupy movement, but that is a very shallow analysis. A much more serious political analysis will show that movements influence each other across time and across regions.

Occupy’s message—and it was a very simple message, the 99% versus the 1%—this was the result of decades of a systematic backslide in standards of living and standards of income. And it has been met by very concerted propaganda, spread through the media, there is no talk of costs, costs to society. It was all talk of the “American Dream,” if you work hard you will succeed, and if you do not succeed it is because the fault lies with you—you are lazy, you did not work hard enough, you were not talented enough. Occupy rose out of the ashes of all those myths and gave expression to an uneasiness everyone was already experiencing.

The other thing Occupy exposed was the other side of the equation—the financial trading that helped lead to the collapse, the annihilation of economic growth globally—who got bailed out.

Our discussions about the minimum wage is just another way of expressing that sense of anger and frustration and disappointment of economic inequality and political dysfunction.

All of this was captured in our political election last year, where 95,000 people voted for an open Socialist in defiance of all the conventional logic—you know, you can’t call yourself a Socialist or refuse corporate campaign donations and expect to win office. We threw the rule book out the window, and we won. And the reason is because that is precisely the alternatives people are searching for. They are looking for someone who will fight for their interest in change.

CW: The irony of you running openly as a Socialist is your ideas have been well received by a progressive City Council and, in fact, many of your approaches seem mild. You do not seem that radical.

KS: [laughs] I think it is true that a demand for $15 per hour is something that is broadly supported. A poll came out recently that suggests that 68 percent of likely Seattle voters strongly support a $15 per hour minimum wage. I don’t have any illusions that 68 percent of Seattle identifies as Socialist.

That shows you that the vast majority are in favor of social justice initiatives and of policies that would dramatically address income inequality and the obscene wage gap—CEOs on average earn $7,000 per hour while their workers are struggling to put good on the table. You don’t have to be a Socialist to understand that your life sucks under the current system, and that the current system will not fight for you to help make things better.

However, I would say that the fact that I am a socialist and that we ran a Socialist campaign is not incidental. It is precisely because of my understanding of the hollowness of capitalism, my understanding that in order to struggle for even a small reform under capitalism you must fully take on Big Business and fight for you ground. That comes from our clarity as Socialists. It is not incidental.

In reality, anyone could have run a campaign on the same platform we offered—raising the standard of living for low incomes, creating affordable housing and rental controls, and taxing the wealthy to provide funding for things like mass transit—these ideas have broad appeal. You don’t have to be a Socialist to support them; however, you do have to have an understanding and the courage to say, “I am going to fight boldly for these things. I am going to speak sharply for their need. I am not going to curry favor with the Democratic Party establishment, I am not going to tone down a message to receive corporate money or because that is what media pundits are telling me to do. I’m not going to take a dime from corporations because I will then be beholden to the very systems I am encouraging other people to reject.”

CW: And yet it is a message that resonates more strongly with one generation than another.

KS: Yes; a generation has grown up without a Cold War and without the stigma or baggage that represents, a relic of the past.

Instead, what they see ahead is an endless future of low-wage jobs, crushing student debt, and very little faith that the system will address these things.

So while they are not necessarily ready to talk about socialism, they do understand one thing. They understand that capitalism is not providing even their basic needs.

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