"What does not change / is the will to change"
--Charles Olson, "The Kingfishers"

Friday, February 15, 2013

Is there momentum for a minimum wage hike?

New Jersey's minimum wage battle is going to be decided at the ballot box in November, although if the president is successful that vote won't have much of an impact on New Jersey workers.

And that's a good thing, because the president on Tuesday changed the terms of the debate. In his State of the Union speech, President Barack Obama called for a national minimum wage of $9 an hour that would be indexed to inflation -- a full 75 cents higher than what is called for by the proposed N.J. Constitutional amendment and 50 cents more than the wage vetoed by Gov. Chris Christie.

The president's embrace signals both a change in the political calculus -- when the president is calling for a hike that will affect all but a handful of jurisdictions and including the indexing provision, you can be pretty sure the political winds are in his favor.

It's why you haven't seen an outright veto of the Democratic wage hike by the governor or a full-on attack by state Republicans, despite fervent opposition from business groups to any increase.

And I think it's why the Democrats have been unwilling to bite on the Governor's compromise proposal -- an incremental increase in the wage totaling $3 over three years -- or the carrot of a restoration of the earned income tax increase to 25 percent of the federal credit. They think -- rightly, I suspect -- that they are going to be able to go over the Governor's head to the voters on this on.

A January 23 poll from Quinnipiac University found wide support for the wage hike -- 82 overall and 67 of Republicans. Maurice Carroll, director of the Quinnipiac polling institute, summed it up this way:

“New Jerseyans are in a generous mood when it comes to raising the minimum wage, with overwhelming support for an increase, even among Republicans.”
Republicans in the Legislature don't see it that way. Assembly Minority Leader Jon Bramnick (R-Union) called the referendum -- according to NJ.com -- "an unprecedented misuse of the state's governing document."
“So the message we’re sending to the business community is we’re imposing in the New Jersey constitution an automatic rise regardless of the economy, regardless of feelings of the Legislature in the future," Bramnick said.
But what about the folks who work the minimum wage jobs? If we don't pass a wage hike, aren't we saying that their needs are less important -- that it is OK for their paltry earnings to atrophy when compared with inflation?

The New Jersey Working Families Alliance finds this thinking abhorrent. In a statement issued after the Assembly vote, the called the constitutional vote "a huge step towards giving half a million hard-working New Jerseyans a meaningful raise."
New Jersey voters know that you can’t survive on $7.25 an hour and that raising the minimum wage will give the state’s economy a much needed jolt. Raising the minimum wage and tying it to inflation is the right thing to do for working families, the smart thing to do for the state’s economy and we are confident that it in November New Jerseyans will finally get a long-awaited raise.

John Cassidy of The New Yorker raised a similar point Thursday in a blog post:
The first statement we can make without fear of contradiction is that, at $7.25 an hour, the current minimum wage is pretty low. In nominal dollars, it’s gone up quite a bit over the past twenty-five years. In 1978, it was $2.65; in 1991, it was $4.25. But these figures don’t take into account rising prices, which eat away at purchasing power. After adjusting for inflation, the minimum wage is about $3.30 less than it was in 1968. Back then—forty-five years ago—the minimum wage was $10.56 an hour, according to a very useful chart from CNNMoney.

We also know that the U.S. minimum wage is low compared to its counterparts in other advanced countries. In France and Ireland, for example, the minimum remuneration level is more than eleven dollars an hour. Even in Great Britain, which is usually regarded as a country with a flexible, U.S.-style labor market, it is close to ten dollars an hour. Another informative chart, this one from Business Insider, shows that the U.S. minimum wage is comparable to ones in places like Greece, Spain, and Slovenia—countries where G.D.P. per capita and labor productivity are markedly lower than here in the United States. We have an advanced economy but a middle-level minimum wage.
Bramnick's argument -- and that of the business community as a whole -- ignores this, while also trafficking in the canard that raising the minimum wage would damage the economy. There are hundreds of studies that can be turned to in an effort to prove either side of this argument. But Cassidy points to some numbers that, at the very least, should banish the "higher minimum wage costs jobs" nonsense:
A second important and (largely) undisputed finding is that there is no obvious link between the minimum wage and the unemployment rate. During the nineteen sixties, when the minimum wage was raised sharply, unemployment rates were sharply lower than they were in the nineteen eighties, when the real value of the minimum wage fell dramatically. If you look across the states, some of which set a minimum wage above the federal minimum, you can’t see any sign of higher rates leading to higher unemployment. In Nevada, where the national minimum of $7.25 an hour applies, the jobless rate is 10.2 per cent. In Vermont, where the minimum wage is $8.60 an hour, the unemployment rate is 5.1 per cent. What these figures tell us is that other factors, such as the overall state of the economy and how local industries are doing, matter a lot more for employment than the level of the minimum wage does.
In many ways, the question of whether to raise the wage is not a purely economic one. It is a moral one, as well. What Bramnick and the business community are arguing is that it's OK to keep from increasing the pay of those at the bottom of the economic pot -- and that's just not acceptible.

As Assemblyman Tim Eustace (D-Bergen) said, the jobs the state lost in New Jersey in recent years (aside from the public sector ones) "were disproportionately in mid-wage occupations like manufacturing and construction." The new jobs "are concentrated in low-wage fields like restaurants, retail and home health care."
As a result, more families are relying on low-wage and minimum wage jobs to make ends meet.
Not that the increase will take the state's workers very far. The 75-cent increase translates into $30 more a week and $1,500 a year and still leaves minimum wage workers making a little more than $17,000 a year. The Obama wage hike offers a better deal -- a $60-a-week and $3,120-a-year increase, pushing their wages to $18,700 for the year -- but the chances of the wage hike getting through the Republican Congress remain slim.

But New Jersey is going to get its chance in November, no matter what happens in Washington.

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