The Push for a $15 Minimum Wage
Labor activists just won a “landmark victory” in America’s second-largest city, said Rory Carroll in The Guardian (U.K.). The Los Angeles City Council voted 14 to 1 last week to raise the city’s minimum wage from $9 to $15 per hour by 2020. Seattle and San Francisco have recently made similar moves, and will enact the $15 minimum wage by 2017 and 2018, respectively. Now, organizers of the L.A. wage campaign hope “to create a domino effect,” bringing the fight for higher pay to cities around the country, including New York City, Chicago, and Washington, D.C.
Activists won’t like to hear it, but this wage hike “will hurt workers,” said Megan McArdle in BloombergView.com. I’m not saying businesses will shut their doors “en masse” or start laying off staff. But over time, employers will decide not to add workers. Struggling firms will “slip into the red.” And bosses will look to reduce head counts by investing in “labor-saving technology” like touch-screen stations for customers to do their own ordering. It won’t happen overnight. But ultimately, there will “be fewer employees in some businesses” as a result of this hike. I firmly believe that any person “willing to work” should be able to make a decent living, said Warren Buffett in The Wall Street Journal. But minimum wage hikes only leave workers behind, by reducing employment “in a major way.” Instead, we should increase and improve the Earned Income Tax Credit, which supports low-income workers but doesn’t “distort” the market by damaging employment or discouraging work.
Please spare me the “tut-tutting,” said Jeff Spross in TheWeek.com. Our society rigorously enforces the notion that everyone has a moral obligation to work. But we then refuse to require that employers pay wages that “people can actually live on.” That’s “as clear a recipe for worker exploitation as one could possibly imagine.” Opponents of higher mandated wages insist “that higher pay will lead to layoffs and business closings,” said The New York Times in an editorial. But those are the same tired arguments that have been trotted out since 1938, when the minimum wage was first introduced. “Experience and research” prove the critics wrong; higher costs to employers are offset by lower turnover and higher productivity. And with the long phase-in of these recent laws, employers have plenty of time to prepare.
The truth is, we don’t know what the effect of a $15 minimum wage will be, said Jordan Weissman in Slate.com. Cities have never attempted hikes of this magnitude before. Previous studies that indicate wage increases don’t have much impact on employment have all looked at “moderately sized” increases. And now other cities are poised to jump on the bandwagon before we know “what the results of this big test will be.” Cities like Los Angeles aren’t just defying decades of “economic orthodoxy,” said John Cassidy in The New Yorker. They are also challenging the idea that low-wage jobs are “unavoidable and acceptable.” If the city’s wage experiment can prove the critics wrong, it could “change American politics in a very significant way.”
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