May 2, 2014
While the federal minimum wage is not going to change anytime soon, state and local minimum wage rates are another story. How does a $15/hour minimum wage strike you? According to a Seattle activist it “reflects the attempts of business to water down what the working people want.” In this post, we will review: (1) federal minimum wage debate; (2) the local push in cities like Seattle to raise the minimum wage; and (3) the state-level pushback in Oklahoma to prohibit local adoption of minimum wages.
Federal minimum wage staying put
The federal minimum wage is $7.25/hour. It has not changed since 2009 and it is not likely to change anytime soon. That would be the end of the story if this were not mid-term election season.
This typically means that Congress is more gridlocked than usual as each party tries to develop talking points to rally the base and raise money by putting forth non-starter proposals. The Republicans raised this to an art form with their weekly votes to repeal the Affordable Care Act (46 times as of last October and I have lost track since then).
In that same spirit, the Democrats have timed their “rally point initiative” to occur during the election year. Specifically, Democrats are using the minimum wage as their point of attack. In February, President Obama issued an Executive Order that has the effect of raising the minimum wage that federal contractors must pay; effective January 1, 2015 the minimum wage will be $10.10/hour and it will be increased annually thereafter using a formula tied to the consumer price index (see Executive Order - Minimum Wage for Contractors). Further, a bill that would have raised the federal minimum wage to $10.10/hour failed in the United States Senate (see S.B. 2223, the so-called “Minimum Wage Fairness Act”).
Seattle more than doubling the federal minimum wage?
Apparently, Seattle will have a $15.00/hour minimum wage within 3 to 7 years, depending on the size of the employer. Yesterday, Seattle Mayor Ed Murray announced what he describes as “the details of a broadly-supported plan to raise Seattle’s minimum wage to $15 per hour, the highest of any major city in the nation.” At $9.32/hour, the state of Washington already has the highest state minimum wage in the nation (see our September 30, 2013 Bullard Alert and the DOL’s state by state listing of minimum wage amounts).
While Seattle’s plan, if enacted as proposed, would take a number of years to reach full effect, there are a number of other cities that already have approved local minimum wages higher than the minimum wage being pursued on the federal level. These cities include:
$15.00/hour minimum wage in SeaTac, the city in which the Seattle-Tacoma Airport is located (effective January 1, 2014);
$10.66/hour minimum wage in Santa Fe, NM (effective March 1, 2014).
This is not a comprehensive list of local “tail wagging the dog” efforts to raise the minimum wage in states a city at a time.
The response – Republicans push for less local control
Because politics these days is all about sound bites, Republicans have spent a number of years using “local control” as a pushback against various federal programs. However, in light of the success that Democrats and organized labor has had in pushing minimum wage increases at the local level, we are beginning to see a bit of a rethink on the meaning of local.
Specifically, in Oklahoma a law went into effect last month that bars local minimum wage rates. The Oklahoma law provides that “no municipality or other political subdivision of this state shall establish a mandatory minimum number of vacation or sick leave days, whether paid or unpaid, or a minimum wage rate which an employer would be required to pay or grant employees.” Significantly, in addition to barring local minimum wage rates, the law also prohibits local sick time ordinances (like we have in Portland). In signing the bill into law, Oklahoma Governor Mary Fallin stated, “Mandating a minimum wage increase at the local level would drive businesses to other communities and states, and would raise prices for consumers."
We expect the minimum wage debate will continue to be prominent as we move through the summer towards the November elections.
The Bullard Edge