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.
The activists quickly began trying to broaden their efforts, shifting their attention to minimum wage laws. Soon, liberal cities like Santa Fe, N.M., and San Francisco were increasing minimum wage levels, but there were ferocious battles in some cities, like Albuquerque, N.M., where voters defeated a $7.50 wage proposal last year. Failing to pass statewide living-wage laws, activists turned to the minimum-wage issue on that front, too. State lawmakers have passed some minimum-wage hikes over the past decade, but they didn't start winning at the ballot box until 1998, in Washington, and Nevada and Florida, in 2004.
Jen Kern, one of the original activists, soon found her telephone ringing off the hook. How had they been successful? Supporters created a broad coalition composed of the Association of Community Organizations for Reform Now, lawyers at New York University, labor groups like the AFL-CIO, the National Council of Churches' Let Justice Roll Living Wage Campaign, and the Democratic Party.
That's exactly the network Ohio supporters tapped last January. Unions joined, not because their members would see an immediate gain, officials insisted, but to stand up for ordinary workers. "Workers have been losing for 25 years," says John Ryan, former head of the Cleveland AFL-CIO. "But is there a political sense to it? Absolutely."
Values. For liberal religious groups, the minimum-wage campaign is a chance to appeal to voters' spiritual values with a social justice issue. In Ohio, known for its evangelical churches and strident conservatism, that's especially important. "It's a rallying cry, I believe," says the Rev. Paul Sherry, head of the nonpartisan Let Justice Roll effort, "for people of faith ... who are very much concerned about the level of poverty."
Still, passing a measure like this one is tough. In Ohio, it will need 322,000 signatures by August to just get on the ballot. So far, supporters say they've gathered 125,000 by relying on volunteers; professional help will cost about $1.25 million. Add another couple million dollars for ads and Election Day mobilization, Prentiss says. All told, the national campaign will need some $10 million, says Kristina Wilfore, head of the liberal Ballot Initiative Strategy Center in Washington, D.C. "The progressive movement," she says, "is just amazingly behind in this field."
The movement has also had to deal with some hard political realities. Supporters settled on $6.85 because public support starts to drop off above $7; voters start questioning whether it'll hurt business. Below $7, says David Mermin, a Democratic pollster, progressives could drive a wedge into the Republican Party and win over born-again Christians and Republican women.
Republicans, however, aren't sitting still. In Michigan and Arkansas, GOP lawmakers recently agreed to a wage increase in part to avoid efforts to tie future increases to inflation and to derail fall ballot campaigns. In Ohio, restaurant and business groups are girding for battle. Opponents like Gary Lucarelli, head of the Cleveland Area Restaurant Association, says the wage increase would hurt small businesses and cost teenagers their first jobs. If the initiative were to pass, he says, payroll costs at his four restaurants would increase 7 to 9 percent, cutting his profit by 36 percent. "We'd either cut labor or increase prices," he says. That's why the Ohio Restaurant Association has warned in a letter to its members that the law would be "potentially devastating." The association and its allies are planning to raise $3 million for the fight, Lucarelli says.
Still, Democrats believe they've found an issue they can win with. At a recent Senate campaign rally in gritty Ashtabula, an hour outside Cleveland, Rep. Sherrod Brown said: "I think the pressure has just built for people to finally just say, 'If the government won't respond, we'll take it into our own hands.'"
This story appears in the May 1, 2006 print edition of U.S. News & World Report.