Bill Ford's 'vision and strategic focus' calls for 30,000 lay-offs over the next 6 years at Ford Motor Company. 2020's Luke Shaefer's vision calls for a different type of bold action to ensure a brighter future for America. He believes the minimum wages is where to start.

People who work full-time should make enough to support themselves and their families. This is the message I’m taking home as I fly away from St. Paul, Minnesota, where I’ve been attending a conference on state minimum wage campaigns organized by the Economic Policy Institute.1 The thing that’s compelling me to write you in excitement on the plane is that there is strong evidence that the American people agree with this principle, and are ready to vote on it.

During an era of seemingly never-ending bad news for those of us who care about social policy, the recent success of state minimum wage initiatives imbues me with hope that we, as a country, can move away from the go-it-alone course we find ourselves on, toward a bold and brighter future, where work is rewarded and families can survive on what they earn. The vast majority of the country embraces this value, as is proven by the immense success we are seeing with state minimum wage campaigns today.

Seventeen states have usurped the federal government’s control of the minimum wage by passing increases, by far the most to do so at one time since the New Deal coalition first legislated a federal minimum in 1938. Twelve states have enacted raises since January of 2004. Together they make up over forty-four percent of the population2. Even more states are considering a hike. Are they blue states, you might ask?

Yes, the lion’s share of the raises, to date, have been done through state government in blue-tinted states, However, states, where traditional legislation has been blocked by conservative policymakers, have utilized ballot referendums to give raises to millions of hard working Americans. During the 2004 election, both Florida and Nevada carried such referendums on the same ballot in which voters in both states gave Bush a majority. These minimum wage initiatives passed by 71 and 68% respectively, meaning that a significant population pulled the lever for both Bush and a minimum wage hike3.

Following the trail blazed by Florida and Nevada, advocates in approximately nine states are working to do the same. Arizona, Montana, Michigan, Ohio and others will all most likely carry similar measures is 20064, and there is every reason to expect - if advocates learn from those who have gone before and work hard to counter the erroneous criticisms commonly forwarded by business lobbies and other critics - that they will pass.

What do we know about the economic effects of such a raise? Anyone who has taken a microeconomics course probably knows that economists generally don’t believe the minimum wage works. However, polling data suggest that most people are aware of economists’ opinions on this matter, and support raising the minimum anyway5. Furthermore, some of the top economists in the country have shown that both the theoretical reasoning behind this view as well as the empirical methodology used to support it are flawed6. Newer, more rigorous studies show that raising the minimum wage most likely does not cost jobs, and in fact has been known to have a small positive effect on state and local economies7. This makes sense when you think of what happens when you put money in the pockets of those who don’t have enough- they spend it, which helps local merchants and local economies.

Who really benefits from a minimum wage raise? Another enduring myth is that the minimum wage only affects teenage workers, and so there should be less priority given to regulating their wage rates. This again is false. Approximately 72% of minimum wage earners are adults, many of whom are hardworking parents with children.8 The Economic Policy Institute projects that 1.8 million parents with children would benefit from a federal raise to $7.25, and single mothers with children are among the greatest beneficiaries of state increases.9 By allowing such a low minimum as the federal level of $5.15, which offers the lowest purchasing power of a minimum wage since the 1940s, our country is sending a very clear message that work doesn’t pay, and that working hard isn’t enough to care for your family. Furthermore, many studies suggest that minimum wage hikes increase worker productivity markedly, and so employers benefit.10 This is a case, among others I would argue, where some business lobbies don’t know what’s good for them.

But the reason why this spark of minimum wage action is so exciting goes beyond the immediate campaigns, which will give millions of Americans a long overdue raise that they deserve. It speaks to America’s yearning for a positive vision of what we can be. Of an America where work is rewarded and where we make good decisions about our economy by investing in workers and rewarding good employers who already pay good wages by forcing the bad ones to raise their wages as well. This is vision where children don’t grow up believing that work just isn’t worth it.

Right now, neither of the two major parties offers such a vision. Furthermore, because progressive advocates find themselves under attack by extreme conservatives, they constantly find themselves playing defense, unable to articulate a better, brighter future.

It is time to stop playing defense. As my good friend Joel always teaches me when we play chess, the best defensive move protects your weakness and simultaneously takes the offense. This is why the efforts of 2020 Democrats are so important. Another coalition, led by Beth Shulman, author of a popular and excellent book called The Betrayal of Work11, is trying to bring progressive entities together behind a positive vision of the future as well12. As she says, we need to take immediate and concrete issues like the minimum wage, win on those, but also link them to something bigger and better: building toward a brighter future.

As 2020 Democrats and other organizations are learning, such a vision takes intense collaboration and compromise. I believe it doesn’t work when we just focus on the future. We have to connect today’s issues to the future. That takes messaging discipline, which is something that progressives are especially bad at. But it is only through building a bold and progressive vision of tomorrow that is grounded in today, and then figuring out how to truly communicate that to the American people, that we can move forward. Issues like the minimum wage provide exactly the type of opening we need to do that. Let’s not miss the opportunity.

Bibliography

1. EPI provides a veritable mountain of evidence in support of the minimum wage on their website at www.epi.org.
2. See D. Cauchon, “States say $5.15 an hour too little: Minimum wages top federal rate.” USA Today, May 30, 2005.
3. Research from my paper, “State Minimum Wage Laws: Monumental Achievements or Token Concessions?” Currently under scholarly review and available on the EPI minimum wage conference resource CD.
4. See D. Cauchon, “States say $5.15 an hour too little: Minimum wages top federal rate.” USA Today, May 30, 2005.
5. Waltman, J. (2000). The politics of the minimum wage. Chicago, IL: University of Illinois Press.
6. See Card & Krueger Myth and measurement: The new economics of the minimum wage. Princeton, NJ: Princeton University Press. 1995.
7. See Katz & Krueger, 1992. The effect of the minimum wage on the fast food industry, Harvard Institute of Economic Research Working Papers 1584, Harvard - Institute of Economic Research. and Baiman, Doussard, Mastracci, Persky, & Theodore. Raising and maintaining the value of the state minimum wage: An economic impact study of Illinois. Report by the University of Illinois at Chicago, Center for Urban Economic Development
8. See the Economic Policy Institute’s minimum wage issue guide, http://www.epinet.org/content.cfm/issueguides_minwage_minwagefacts
9. http://www.epinet.org/content.cfm/issueguides_minwage_minwagefacts
10. See Card & Krueger Myth and measurement: The new economics of the minimum wage. Princeton, NJ: Princeton University Press. 1995.
11. Shulman, The Betrayal of Work. New York: The New Press. 2003
12. Shulman points to this website as a clearing house for her efforts in this vein- www.economythatworks.org