Activists across the country protested for a $15 minimum wage for fast food workers today. Marchers left SeaTac this morning to bring the $15 wage narrowly passed in the airport city to Seattle. For some council members, it won’t be a hard sell.
Newly elected socialist city council member Kshama Sawant (CHAH’-mah SAH’-want) says if the council doesn’t approve it, she’ll help put a minimum wage measure on the ballot.
The city has budgeted a $100,000 study of the issue, though labor activists have already expressed their impatience with process. An initiative in the city may be in the offing.
There’s no shortage of minimum wage research, of course. The New York Times looks at some of it this morning, tying it to the national fast food protests.
But even experts who support some increase worry that a raise to $15 an hour would have profound effects on the industry. Arindrajit Dube, an economics professor at the University of Massachusetts, Amherst, said an increase in pay to $15 would push up fast-food prices by nearly 20 percent. With the industry estimating that one-third of its costs go to labor, he said a $15 wage would mean wage increases averaging around 60 percent, raising the cost of a $3 hamburger to $3.50 or $3.60.
“Would I be concerned about possible job losses if there were a $15 minimum wage in the restaurant industry, yes, I’d be concerned,” [Dube] said. “There are concerns that it might lead to the substitution of automation for workers.”
The article also cites economist David Neumark
David Neumark, an economics professor at University of California, Irvine, who has studied minimum wage increases in depth, estimated that raising fast-food pay to $15 would result in a 5 percent or 6 percent reduction in employment. He and Professor Dube said they were reluctant to speculate about the effects of a $15 wage because while many studies have been done about the effects of a 50 cent or $1 increase in the minimum wage, hardly any have been done about the effects of a sharp jump to the $15 area.
Color me skeptical when it comes to claims that the Law of Demand does not hold. The intuition that higher prices are incentives to discover substitutes has been corroborated an uncountable number of times. There may be cases where within some narrow range of price hike there are short-term negligible effects.
…But the deeper point is that the only way to really help low paid people is to give them an education and a marketable skill.
We’re going to be hearing a lot more about this over the coming months.
At a time when there’s growing national and international attention on economic disparities, labor unions, worker advocacy groups and Democrats are hoping to build public support to raise the federal minimum wage to $15 an hour, or $31,200 a year, from the current $7.25 an hour, which is about $15,000 a year for full-time work.
I like the quote with which the NYT closed its story.
“The real problem with the economy is there aren’t enough people working,” said David French, a senior vice president at the National Retail Federation. “There’s been a lot of growth of jobs in the retail and service sector. It’s been one of the bright spots. Why then should the policy response be to create fewer jobs? That’s a bizarre remedy to a crushing problem.”