Living-Wage Debate

Are wage hikes, in fact, "job killers"? Since 1994, more than 200 cities have set living-wage laws that specify wage and, in some cases, benefits beyond the federal minimum of $7.25 per hour, and ten states have passed mandatory cost-of-living increases to the minimum wage. Among the states with higher minimum wages than the federal standard are Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon, Vermont, and Wisconsin. Particulars vary by state, but these states have recognized the income disparities and that the federal standard has not been raised since 2009. An employee who works full time (40 hours per week) earning minimum wage has an annual salary of just over $15,000. Most minimum-wage workers, however, are not full time and thus earn less than the federal poverty level.

In 2003, Santa Fe, New Mexico, adopted a living-wage standard of $8.50 an hour with regular cost–of-living increases. Since then, that hourly rate has grown to $10.20 an hour, or about $3 over the federal minimum. Santa Fe boasts an unemployment rate of 5.8 percent (July 2013), almost two points below the statewide New Mexico rate. Santa Fe has a reportedly thriving restaurant, hospitality, and retail sector. In 2003, San Francisco adopted a citywide minimum-wage law higher than the national standard. In 2007, a University of California study showed that restaurant growth was higher in the city than in the neighboring Bay Area communities, even after San Francisco adopted its new minimum-wage measure. So, at least based on these examples, it is unclear whether raising the minimum wage will reduce the number of available jobs.

Both San Francisco and Santa Fe are popular tourist destinations and have strong retail markets. But the data are unclear regarding what happens in cities with weaker retail markets. Those cities have been reluctant to push minimum-wage measures, arguing that any job is better than no job. However, solid academic research has consistently shown that the higher wage rate does not force layoffs. The Economic Policy Institute asserts that raising the minimum wage to $9 would actually increase jobs as it would pump $21 billion into the economy.
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After looking at impartial academic studies, one can conclude that raising the minimum wage is not the crucial factor in the success of a business; local market forces and demand are more important. In high-demand areas, increasing the minimum wage did not affect business success, and the local jurisdiction often continued to outdo its neighbors with lower wage scales. From a retail perspective, the old mantra of "location, location, location" still applies.

There is no question that retailers these days face a host of challenges ranging from the internet to lower household incomes. But raising the minimum wage—if done in a fair and rational manner—may actually boost the revenues of retail and hospitality vendors by providing their customers with higher incomes and higher spending potential.

Land Use Implications of the Living-Wage Debate - Urban Land Magazine

SEATTLE - New election numbers released Friday night show SeaTac's measure for a $15 minimum wage passing by a mere 55 votes.

King County election results show SeaTac Proposition 1 yes votes leading with 50.56% at 2,500 to no votes at 49.44% and 2,445 votes.

In the costly initiative campaign, which has drawn attention from across the nation, the two sides spent a combined $1.8 million -- enough money to hire every registered voter in the city for a day at $15 per hour.

The proposal would require a $15 minimum wage for many workers in and around Seattle-Tacoma International Airport.

SeaTac $15 minimum wage measure leading by 55 votes

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  • Tom Usher

    About Tom Usher

    Employment: 2008 - present, website developer and writer. 2015 - present, insurance broker. Education: Arizona State University, Bachelor of Science in Political Science. City University of Seattle, graduate studies in Public Administration. Volunteerism: 2007 - present, president of the Real Liberal Christian Church and Christian Commons Project.
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