A
recent study by the University of Washington announced that the
second phase of Seattle’s increase in the minimum wage, moving from
$11 per hour to $13 per hour, had the net effect of lowering the real
wages of low-wage workers by around $125 per week. This study was
immediately seized upon by the bourgeois press to show the folly of a
living wage. It also coincided with Missouri being the latest in a
series of states to use preemption laws to stop cities and counties
from setting up their own minimum wage above the state level.
The
study, which focuses on workers making less than $19 an hour as
“low-wage,” is inherently flawed. It removes from consideration
anyone working at an enterprise with more than one location. This
takes the fast-food workers who have been at the forefront of the
living wage struggles out of the picture, and focuses on low-wage
small business employment.
Further,
it compares Seattle’s economy with small cities in Washington
rather than cities with similar economic models, such as San
Francisco. And it incorrectly attributes a decline in low-wage jobs
to losses from the wage increases. In reality, the Seattle employment
market has been paying more, and the number of jobs paying over $19
per hour—the threshold for “low-wage” work—has been
increasing, as has their hours.
Seattle
businesses and the bosses’ press has not let any of these nuances
stop them from using the study to beat down demands for a living
wage, wringing their hands over how the “left” (i.e., the
Democratic Party) is now “stuck” with the $15 wage idea even
though they claim it is bad policy. Of course, we should not forget
that the Democrats had no interest in the fight for $15 as a specific
living wage target, and have tried to push for lower targets that
still do not give individuals the income needed to live in a modern
American city without government assistance.
In
a city like Seattle, where rents are rising out of control, even a
$15 ordinance is insufficient. The average rent on an apartment in
King County, Wash., has gone from $1066 in 2009 to $1617 in 2017. To
keep rental costs below 40% of income would require an average wage
of over $23 per hour. The city has led the nation in rental price
increases in the last several years. The modest increases in wages
have not outpaced the growing cost of housing, especially for workers
outside of the high-tech sector, which distorts the wage picture with
relatively high salaries.
The
struggle for higher wages has had some gains in recent months. At the
end of June, Minneapolis passed a $15 ordinance—although it will be
implemented by phases that will take until 2022 in large businesses
and 2024 in smaller ones. Most minimum wage laws have had similar
multi-year offsets in their plans, and none are indexed to inflation.
Seattle will not see $15 for every employee until 2021.
This
is not a small matter. Minimum wage fights became a major issue in
2012. What cost $15 in that year is $16 in 2017, and will probably
cost over $18 by the time Minneapolis workers see the $15
wage—leaving them $120 a week short of the targets that were used
to calculate a $15/hour living wage. Wage laws that do not adjust for
inflation are obsolete before they are fully implemented.
Unfortunately,
there are also defeats. In May of this year, the Missouri state
government passed a preemption bill stopping towns and counties from
passing their own minimum wage laws. This forced wages in St. Louis,
which had a $10 minimum, down to the state minimum wage of $7.70.
This tactic originated in Iowa this past March, and will likely be
deployed more and more frequently as living wage ordinances pass in
more city councils.
Nationwide,
job growth numbers have been strong, with a better than expected
222,000 jobs added in June. But wage growth has been sluggish, and
the new jobs have not been offering substantially higher pay. Wages
rose 2.5%, but after inflation is calculated, this is a real increase
of only 1%. Despite the erosion of many retail outlets, the job
growth has generally been in the low-paying service sector, and not
the blue-collar manufacturing industries that President Trump has
made the centerpiece of his nationalist economic vision.
A
large portion of the workforce also remains in what is called
“involuntary part-time work,” that is, workers who are forced
into part-time schedules but who would work full-time if the option
were available to them. About 5.3 million workers in the United
States are in this status, which became widespread during the recent
recession. Employers have not yet abandoned this tactic, which allows
them to avoid paying for health insurance and other benefits such as
sick time and vacation time.
Living
wage battles are particularly important because low-wage jobs are
less and less frequently a transitional step. Two-thirds of workers
who made the minimum wage in 2013 were still making within 10% of the
minimum a year later; this number was about 50% in the 1990s. The
number of workers over 25 earning the minimum wage has increased
significantly in the same time period, changing the typical
minimum-wage worker from a teenager or college student to a working
adult. However, social attitudes have not changed to fit the new
reality, and the stereotype remains a teen flipping burgers for gas
money.
Service
industry jobs are increasingly precarious as the retail sector
shrinks and changes in what is widely called the “retail
apocalypse.” Consumer spending is down since the recession began in
2008, and while the official profits rebounded in 2010, spending did
not follow quickly. With sluggish real wage growth and little
confidence, the over-supplied retail market has been forced to shrink
because there is simply too much real estate dedicated to stores. The
net effect has helped restaurants but devastated shops.
In
cities that do try to raise the minimum wage, the specter of
automation has been held over workers. Campaigns have gone so far as
to show an ordering tablet computer and say that it is the
replacement for the minimum wage worker. The gains of automation in
the service sector, where labor costs are much smaller than supply
and real estate costs, are relatively small, and the strategy overall
cannibalizes capitalism’s ability to profit by removing workers
from the pool of potential consumers.
The
living-wage campaigns led by the Service Employees International
Union (SEIU)’s Fight for $15, and by Socialist Alternative’s $15
Now, have made significant real gains for workers. The increased
minimum wage itself is an obvious benefit, but it has also brought
fast-food workers (SEIU’s main target audience) to national
attention, and put a clear class demand on the table as the major
goal of a mass movement.
It
should be no surprise that Democrats have tried many ways to kill
$15. The initial response by Obama and others, including sections of
the trade-union bureaucracy, was to take up a weak $10.10 national
minimum wage. This undercuts the idea of a living wage—that is,
that any person working full time should earn enough to support
themselves. Increasingly they have taken up supporting $15, but in
highly staged ways, modeled on Seattle, that would only rise to $15
in seven or eight years. The $15 number itself has become a symbol
rather than the living wage idea that it represents.
While
we fully support the $15 struggles, socialists know that it is merely
a first step. Minimum wages must be indexed to cost of living
increases, at least annually, or the gains will be ground away by
inflation. And while the University of Washington study is deeply
flawed, wage demands should be raised side by side with a program to
employ any workers who lose their jobs as a result.
Ultimately,
the minimum wage should be at least $20, with a “30 for 40”
policy that allows workers to work 30 hours for the same wages they
previously made in 40 as a road to full employment. And all workers
should have the right to form a union by card check without
harassment—a part of the “$15 and a union” demand that has been
lost in the shuffle.
But
the capitalist system will never offer a job at a living wage to
everyone who wants one. That would be against its own internal logic,
which requires an army of unemployed potential workers to keep
pressure on the workforce. The U.S. economy is carefully calibrated
so that the official unemployment number does not go below 4%—which
would force wages up sharply and lead to inflation. And the official
unemployment number is never more than a fraction of those
underemployed or forced out of the workforce entirely.
We
need a new economy that is dedicated to fulfilling human needs, not
exploitation. The workers who are now engaged in the fight for a
living wage are one of the groups that need to unite—with union
workers, with unorganized workers, with women, people of color,
immigrants, LGBTQIA+ people, and all oppressed people in the United
States—to bring us there.
>> The article above was written by Wayne Deluca, and is reprinted from Socialist Action.
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