A $15 minimum wage won't be anyone's silver bullet

Why our problems with inequality run much deeper than the minimum wage.
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Why our problems with inequality run much deeper than the minimum wage.

I must admit that the campaign for a $15 Seattle minimum wage has so far reminded me a bit of the bumper sticker campaign for Tim Eyman’s $30 car tabs initiative. The message is simple and to the point — no explanation necessary. And anyone who questions it or adds complexity to the argument is, in the case of Eyman, a protector of the corrupt status quo, and in the case of $15 Now!, a greedy protector of the corrupt status quo.

The upside to this debate, I guess, is that every consultant in town has been hired to work some angle of this thing. Labor appears to be of two camps: Some want to make a quiet deal, while others see an opportunity to storm the castle. The business community is wondering if they’re going to be tied to the tracks as the train rolls over them. Non-profits are waiting to see if they’ll be exempted; if tax increases might be enacted to help them pay salary increases. As the Seattle Times recently reported, shelters and counseling centers say the new rule could cost them $11 million per year.

The few local businesses that have expressed concerns are attacked as greedy capitalists. If they need to pay their employees slave wages, proponents say, then they deserve to go out of business. Not surprisingly, not many people are willing to express concern. Here's why I am.

First, raising the minimum wage so high locally could bring a number of unintended consequences with the potential to hurt those we want to help. It’s already very difficult for young people to get employment experience. At $15 per hour, summer jobs will be all the more difficult to get, making it almost impossible for young people to find work and develop a work ethic through their experience. I worry that this move so quickly will make the problem worse. A more moderate increase at the national or state level would be a better option.

Second, large corporations can probably absorb the immediately higher costs. Our local restaurants and retail businesses will have a much tougher time. Will this result in closures or fewer yet more experienced employees? Will employer participation in healthcare be reduced or eliminated to absorb the increased cost? And will companies be willing to take a chance on young people or immigrants with limited English skills?

The mayor’s task force on income inequality has been debating and receiving briefings from experts about the effects of raising the minimum wage since the beginning of the year. The challenge for Seattle is that no one has raised it to $15 so quickly. Even SeaTac’s Prop. 1 only impacts certain economic sectors and exempts small businesses and those with a union contract.

Some people point to San Francisco's minimum wage as an example of what we should do here. At $10.74, it's the highest in California, but only a little over a dollar more than the State of Washington's. And although San Francisco has implemented a minimum wage bump alongside rent control to make the city more affordable for working people, they are suffering more and more from the relentless march of gentrification. The reason is simple: The city's blue-collar family wage jobs left long ago.

Seattle still has plenty of decisions about minimum wages left on its plate: What should our minimum wage be? Will it be phased in over time? Is total compensation counted in the minimum? Will businesses with labor contracts be exempt? Will there be other exemptions for non-profits, types of industry, or size? Will the city include some sort of tax relief for small businesses as part of the package?

Rather than debate whether Seattle should pick $15 or $11 or $25 though, it might be better to discuss the problem in a larger context. How do we help people move up the economic ladder?

Still, there are plenty of good jobs available in the Northwest — and no, they’re not all tech companies. Many are in maritime and manufacturing, which, though they may start at $10 an hour, will hire first time job seekers and people with limited English skills. Aging workforces mean these sectors are desperate for new people, so advancement can come quickly as skills are learned.

Unfortunately, over the last 30 years, we've made access to the higher rungs much more difficult. States have divested from higher education, creating huge increases in tuition. (The University of California system used to be free!) Marginal tax rates have been reduced, giving governments less money to invest in the kinds of infrastructure that, in the 1950s and 60s, became the basis of American prosperity. The workplace has changed dramatically and different skills are required, but without government investment in training and education, we are falling behind.

Our frustration about that is understandable and valid, but our problems won't be solved merely through a higher minimum wage. We must also look to tax policy and investment in workforce training and education. So far, the $15 Now! debate has not included any discussion of how we get people access to these resources.  

My hope is that we refocus on the larger, more effective strategy of growing jobs and job training; of connecting people to new careers and rebuilding the Northwest's middle class. Because the minimum wage should not be the final wage for anybody.

It is meant to be that first rung of the ladder.


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About the Authors & Contributors

Jordan Royer

Jordan Royer

Jordan Royer is the vice president for external affairs in the Seattle office of the Pacific Merchant Shipping Association.