From Alaska to Arkansas to L.A., U.S. Voters Vote for Higher Minimum Wages
In August we reported on the growing movement across the U.S. to raise state and city legal minimum wage levels. We observed that in a global economy, higher pay levels can make a city, state, or country less competitive and reduce employment and business creation. Nevertheless, in elections earlier this month, voters in four states and two large cities voted to increase the minimum wage. And now a battle is raging in the Los Angeles metro, one of the largest urban areas in the U.S., to raise minimum wages further there.
In the November elections, voters in Alaska, Arkansas, Nebraska, and South Dakota voted to increase legal minimum wages in those states. Those states saw an increase in Republican voting in the election, and in Arkansas, Nebraska, and South Dakota, Republicans won election as governors. But while voting for free-market Republicans, voters seem to be saying that they feel income levels at the bottom of wage scale are too low, especially for people with families. As NBC News pointed out, after November’s election, 17 states have acted to raise minimum wage levels since 2013.
Minimum wage levels vary pretty widely. The federal minimum is $7.25, and although President Obama wants to raise it, the Republican Congress is likely to block any changes for the next two years. But at the state level, voters are not leaving the decision to legislatures. Voters in Arkansas voted to raise the nation’s lowest state minimum wage from $6.25 to $8.50 by 2017 in three steps. San Franciscans voted to raise that city’s already relatively high minimum wage from its current $10.74 in stages up to $15 an hour in 2018. At that level, San Francisco will be tied with Seattle for the highest minimum wage in the U.S.
Meanwhile, the New York Times recently reported that in the Los Angeles metro area, a highly effective lobbying campaign uniting union, environmental, and immigrant groups under an umbrella organization called Laane (for Los Angeles Alliance for a New Economy) has succeeded in passing a minimum wage specifically for hotel workers, first in Long Beach, a port city south of Los Angeles. In October, Laane lobbying, marches, and other activities successfully swayed the L.A. City Council to approve a $15.37 per hour minimum wage for hotel workers in the city of Los Angeles. Before the vote, the hotel industry fought back, commissioning a consulting firm to study the issue. Its analysis concluded that the pay increase would lead to a loss of 1,400 hotel jobs. The Los Angeles metro area includes dozens of cities and it is not hard to see future hotel development moving to nearby cities if Los Angeles wage costs are too high. Another study, from UC Berkeley economists, backed Laane’s point of view, with findings that said increased incomes among the lower income group would boost the local economy.
The issue continues to grow and spread across the nation. According to the Wall Street Journal, fast food franchise companies are expecting more protests from employees as we approach the holiday season. The franchise industry lobbying group, the International Franchise Association, is planning an informational campaign and a new website to address the issue. Federal government statistics put the current median hourly wage for food preparation and service employees at $8.81.