A Winning Bet?
Efforts to increase the minimum wage are proliferating; Democrats say they've found an issue to rally around
CLEVELAND--It was a tough two months for Ohio Democrats after the 2004 election. Besides President Bush's razor-thin win, Republicans had pushed through a statewide ban on gay marriage. Democrats were flat on their back when C.J. Prentiss, the minority leader in the state Senate, called for a January summit of party power brokers and union bosses at the statehouse in Columbus--where they came up with an unlikely game plan: a campaign to raise the minimum wage. "It's morally right, just, and," Prentiss pointed out, "something that brings out the base."
And not just in Ohio. Democrats, big labor, progressive religious groups, and community activists nationwide have latched on to the wage-hike campaign as a way to define their own "values." Public approval for a federally mandated raise is at 83 percent, and 20 states already have set a higher minimum wage than the federal level of $5.15 per hour. Now Democrats want to put the issue on the ballot this fall in at least seven states, including battlegrounds like Arizona and Ohio--a move they say could boost Election Day turnout.
Change of venue. The federal government hasn't budged on the minimum wage in nearly a decade. At $5.15 an hour ($10,712 a year), its value has eroded so much that the 2 million Americans earning the minimum wage or below today can buy less in real terms now than at almost any time in the last half century. That's why activists are taking their fight to states like Ohio, where high-paying union jobs have been fading away. The Ohio ballot measure would raise the minimum wage to $6.85 from the federal level and tie future increases to inflation. That would mean an immediate 80-cent raise, on average, for 297,000 workers, according to Policy Matters Ohio. Kyle Wangler would be one of the beneficiaries. Now 24, he worked temporary jobs for two years making $5.15 an hour putting bumpers on cars and washing hospital laundry. A Sunday regular at Cleveland's Trinity Cathedral, Wangler waits quietly in line for free meals there. The church serves the homeless mostly, but volunteers are also seeing a steady flow of minimum-wage workers. "At $5.15 an hour, I don't care if you're at a shelter," Wangler says. "You can't live off $5.15."
The minimum wage was instituted in 1938, and raising it has been a staple of Democratic politics ever since. Economists, however, have long argued that increasing the wage will lead to higher unemployment. "The notion that you can arbitrarily increase these wages and not have an associated impact on the businesses that have to do that," says Marc Freedman, the director of labor policy for the U.S. Chamber of Commerce, "is folly."
Well, yes and no. In the mid-1990s, some economists began reaching a different conclusion. A small increase in the minimum wage, they said, didn't necessarily cost jobs; instead, according to the left-leaning Economic Policy Institute, businesses saw higher productivity and worker morale. Armed with these data, a loose network of community activists, starting in Baltimore in 1994, began a national movement to raise pay levels. It started as a "living wage" campaign to increase pay for municipal employees. Arlington County, Va., for example, set hourly wages for county employees and contractors at $11.20. In the past decade, voters in 130 cities and counties have approved similar laws.