I’d been meaning to comment on this Jonathan Martin post for quite some time, but got distracted by my non-Seattle-Times-bashing pursuits. Writing on the paper’s editorial board blog, Martin echoes a trope that has grown quite popular with minimum wage concern-trolls these days: that a $15 minimum wage would ironically hurt poor people, by making it too expensive to provide vital human services!
As Martin correctly points out, human services are largely provided by low-wage workers—some of them college educated social workers who make only $12 to $13 an hour themselves. A $15 minimum wage would indeed cost Seattle’s not-for-profit human services agencies millions of dollars a year in additional labor costs. So Martin defends these “abysmal” low wages as “just the financial reality of holding together the human services safety net.”
Responding on Facebook, millionaire minimum wage advocate Nick Hanauer aptly describes Martin’s reasoning as “silly”:
Building an economy that generates huge human services needs by impoverishing most people by underpaying them, and then builds infrastructure to do damage control [on what] this poverty creates by employing people at poverty wages to do it, is economically inefficient, socially ineffective, and morally dubious.
If the argument made by Martin is correct, that raising the minimum wage is bad for the city because then we will be able to pay for less human services, then by definition he must also believe that if the minimum wage went down it would be good for the city because then we would be able to pay for more human services.
“So let me get this right,” Hanauer asks rhetorically, “You guys at the Seattle Times think that the answer to our problems is to impoverish more people, so that you can employ ever more people dispensing services to [the] poor?”
Well justified sarcasm aside, Hanauer’s larger point is that poverty is inextricably linked with the social ills these human services agencies are there to address. If we reduce poverty, argues Hanauer, we will also reduce demand for some of these human services.
It’s compelling logic. But Martin is having none of it. “That is, at best, utopian thinking,” scoffs Martin. “At worst, it’s a fantastical theory that will put a vise on already struggling human services.”
You know, because!
In his defense, Martin is a journalist, so he has an understandable self-interest in maintaining social services he may soon have a need to utilize. Also, the Seattle Times editorial board just does something awful to people. (Anybody else notice a hint of Sméagol finally peeking through her Gollum exterior the further Joni Balter distances herself from the Ring of Power?) But to simply dismiss as “fantastical” the suggestion that higher wages might reduce demand for services aimed at the poor—well, that’s just plain lazy.
The smarter retort would have been to argue that what cost savings might be realized from reduced demand cannot materialize fast enough to offset nonprofits’ short term rise in labor costs, whatever the length of the minimum wage phase-in. But that would bring Martin dangerously close to addressing the human service agencies’ real problem: We don’t spend enough on them! We just don’t.
If we really value the services these government-funded agencies provide, then we should instruct our government to spend the money necessary to pay our social workers, childcare workers, addiction counselors, and other human service providers a living wage! We don’t need to abandon a $15 minimum wage in order to protect human services—the City of Seattle just needs to spend more money. Simple as that. And if the money isn’t there, raise taxes. We can start by taxing millionaires like Hanauer.
One can only get to Martin’s dystopian vision if one starts from the position that raising tax revenue is not an option. But it is.
Seattle is a wealthy city. And we will only become wealthier still once a $15 minimum wage starts recirculating billions of dollars in additional wages through our local economy rather than having it extracted out-of-state in the form of higher profits to low-wage national chains. Even at $15 an hour, minimum wage workers will spend almost everything they earn—spending that will bump up local sales tax collections as well as the prospects of local businesses. So if spending an additional $10 million to $15 million a year in taxpayer dollars is the price we have to pay to help human service nonprofits transition to a $15 minimum wage, it will be well worth the investment over time.
Sometimes you can throw money at a problem. And that’s all it takes to address the human services trope that minimum wage opponents are cynically pushing.
I’m on the board of a fairly large local agency that provides services to the very poor. The increased minimum wage will hit our labor costs hard, no question.
And as an agency we’re fully in support of that change. Why? Because the people we serve will benefit enormously; and because the people who support us (private and public) will recognize that our labor costs have increased, and we’re confident we can raise the money to bridge the gap between what wage increases will cost and our current budget. That includes, BTW, costs for the people making $15-$18/hr, whose pay will also need to be bumped up to differentiate from the people they supervise.
The need for our services won’t go away, for the simple fact that on any given day in Seattle the people who need help exceeds the help available from us and from similar local programs by a factor of at least 100. What we do is valuable, but it’s a drop in the ocean compared to what’s needed. So in that sense Martin is right that Hanauer’s statement is “utopian” – but he’s right for the wrong reason.
Our local safety net, even while it’s better than many cities, is so pitiful compared to the need that it’s shameful. People like Martin who rail against taxes (and the services they provide) are a big reason why. And utopian or not, an increased minimum wage moves us in the right direction. It’s not enough, it’s not a panacea, but Martin’s alternative – to do nothing – is demonstrably far, far worse. Demonstrable, because we’re living it.
Regarding that money recirculating through our local economy, are you sure that occurs?
Chicago Fed in 2011 published this (abstract):
Following a minimum wage hike, household income rises on average by about $250
per quarter and spending by roughly $700 per quarter for households with minimum
wage workers. Most of the spending response is caused by a small number of households
who purchase vehicles. Furthermore, we find that the high spending levels are financed
through increases in collateralized debt. Our results are consistent with a model where
households can borrow against durables and face costs of adjusting their durables stock.
(linked here
http://www.ritholtz.com/blog/2.....increases/
)
So, we’ll funnel plenty of money into the (local) economy so lower-wage employees can borrow to buy cars, which will at least allow them to address Metro cuts but will put more cars on the road, more carbon in the atmosphere, and put people who can least afford it deeper into debt.
What am I missing here, or is that really your plan?
Regarding your mention of the horror of college-educated people earning such low wages, could it possibly be because the work they are doing doesn’t require them to have college-level experience?:
An Associated Press analysis of date (sic) for 2011 found that 53.6 per cent of graduates under the age of 25 were unemployed or in menial jobs that did not require their degree.
Read more: http://www.theage.com.au/comme.....z30sZZcjqq
Are you trying to force us to pay them more so they don’t feel so bad about using their BA in Humanities to enable them to ask “Would you like fries with that?”? So they can have enough money to make payments on student loans for college costs that have grown far, far out of proportion to the inflation in the cost of nearly everything else?
Goldy,
It looks like Sawant’s 15now camp is pretty isolated, since this (below link) is the coalition that has caved to Murray’s committee. Thoughts?
http://69.195.124.169/~onefivg2/?page_id=19
@3 I’m writing a post on exploring the political angle. But the game isn’t over yet, and 15Now is still playing their role.
Yes, Goldy, I had noticed the Joni Balter is making more sense and making fewer lame excuses for the rich and powerful since she left the Seattle Times. I remember her from way back in the late 70’s and early 80s at KZAM and she had some useful in interesting things to say. I wonder what had happened to her. It is nice to see her get her head back.
Obviously the answer to slavery was for abolitionists to buy their own slaves to run the Underground Railroad for them.
@1 The right’s private charity argument is a hoax. Only government has the resources to deal with the mass poverty created by their economic policies.
This quote from Martin’s column is striking: “That doesn’t reflect a lack of empathy for people who make wages, just the financial reality of holding together the human services safety net.”
But isn’t that a stake through the heart of the conservative argument that society should rely on private charities, not government programs, to provide the social safety net?
Nick Hanauer is a hypocritical d*ck, considering he pays his workers $11/hr. This is like the hypocritical total comp waiver $15 NOW wants to give to unionized members of Local Unite 18. It’s funny how Hanauer & $15NOW advocate wage requirements for others that they don’t want to follow themselves.
http://seattletimes.com/html/l.....lexml.html
I have to assume that those case workers don’t get promotions or raises as they gain experience. That’s been my understanding when working with non-profits. If you’re in a low-level position, you’re guilted out of asking for more money because you’re “literally” stealing it from poor people!
If you have a valuable skill set for helping the less fortunate, you suck it up in lower-middle-class wage stagnation forever, you move on to government work, you found your own non-profit, or you ditch non-profit work altogether.
These discussions have made it even more clear to me why there are so many duplicative non-profit agencies in this country. If you want real money and acknowledgment for your work, you have to start your own organization, because you won’t get squat as a non-profit wage slave.
@9 Is that your reasoning for keeping the minimum wage below subsistence level?
Social service providers complain about anything that raises costs. The should be more open to demand reduction strategies. Getting off their dependence on service providers who themselves live in poverty would be a great example.
Demand reduction strategies are not just for reducing drug crime.
Not getting paid enough? Ask for a raise or change jobs, crying to the government to make them force your employer to pay you more is cowardly and idiotic.
$5000Now!!!
@9 Rabbit,
No I actually support raising the minimum wage, both federally & locally. What is I am upset about is the hypocrisy of people like Nick Hanauer telling people locally to pay $15/hr while his company has moved their production out of state for cheaper labor which he pays $11/hr for. I am also against $15 NOW having a provision in their ballot initiative to allow total comp to employers like Hyatt (a huge company!!!) for Local Union 18, while saying local companies like Ton Douglass & Dicks Drive-IN who offer more generous benefits than Hyatt at the same part-time hr requirements are of a sudden they are just a step above plantation masters who “according to Goldy” want to control min. wage so they can control their employees lives.
If raising the minimum wage is good for workers (& I think it is), then it is good for everybody. No waivers for total comp for Unions that support $15NOW, no different phase in periods, equal treatment for every business & employee. The problem is this would requires a more cautious approach which is less politically expedient, because it acknowledges that for every action there is a reaction, and some times this reaction is negative. But $15NOW isn’t honest about the fact that yes there will be unintended consequences. Look at Jim McIntire’s, our Dem State Treasurer w/ a phd in Econ, and supporter of min wage increase study done by the UW. Look at Nick Hanauer defense’s of why he pays $11/hr while supporting $15. He actually said his companies “don’t exist on an island” while debating Dori Monson (A $15 opponent), well neither does Seattle exist on an island. Business can easily go to other communities like Bellevue, Kirkland, Edmonds, etc.
I support a $15/hr but to be categorizing companies like Dicks & Tom Douglass as equal to Walmart & McDonalds is dishonest. In addition to call them liars, holds as much weight as them calling $15NOW liars. Both sides speak from experience.
@15 Well if you get upset by hypocrisy, you’re gonna be dead of a heart attack before you’re 40, because this world is full of hypocrisy.
@14 I’ve had days like that in the stock market, but I never had a day like that at work. That’s why I’m a capitalist now and don’t work anymore. Today wasn’t one of those days, though. I only made $553.93 in the stock market today. But then, I didn’t work for it.
@15 (continued) The minimum wage should be the same for everyone. The mayor’s plan is too complicated and isn’t really a $15 wage.
@ 16 Rabbit,
Ironically, I had 2 heart attacks @ 33 when I opened my 1st restaurant. This was right after I left my corporate (total comp) restaurant job w/ insurance and was kicked off health insurance because I had a pre-existing (pre-ACA). So this cost me 54k right after I invested my life savings opening my 1st rest.
While yes the world is full of hypocrisy, doesn’t make it rightl
@ 16 Rabbit,
Ironically, I had 2 heart attacks @ 33 when I opened my 1st restaurant. This was right after I left my corporate (total comp) restaurant job w/ insurance and was kicked off health insurance because I had a pre-existing (pre-ACA). So this cost me 54k right after I invested my life savings opening my 1st rest.
While yes the world is full of hypocrisy, doesn’t make it right.
@ 18, Rabbit
So we agree, the minimum wage should be the same for everyone. But this wouldn’t pass the politics of both employer & labor, that is why both sides have special deals for their own interest groups. $15NOW does, so does the 1%, but the problem is approx. 70% of the economy is small business and doesn’t fall in the conveniently demonized category as Walmart or McDonalds. For example the hypocrisy of the $15NOW waiver that treats unionized Hyatt workers (total comp) preferentially to non-unionized Starbucks workers who receive an even more generous benefit package at the same 20hr/wk part time requirement as Local 18. Why is $15NOW demonizing Starbucks for being more generous in benefits saying they pay “poverty wages”, but $15NOW is making and exemption for Hyatt employer group/. $15 NOW is treatimg Hyatt preferentially over Tom Douglas Rest. Group, a local employer. Explain to me why Hyatt employees or their employer (Hyatt) should be treated preferentially. Why is total comp ok for Hyatt, but not for Tom Douglas, Starbucks, or any other local full service reataurant?
@19 The world has bigger problems than hypocrisy. If we want to make the world more perfect, let’s start with the things that directly threaten our survival:
1) Rid the world of nuclear weapons
2) Stop climate change
3) End all wars and live in peace
4) Eliminate poverty
5) Eradicate disease
6) Eliminate human trafficking
When we’ve accomplished all that, we can take on hypocrisy, if we have any energy left. It’s just a matter of priorities, you see.
@21 It isn’t okay, it’s realpolitik, as you pointed out.
I’ve been involved in politics for 50 years. Politics is its own kind of animal. Leave your reasoning faculties, sensibilities, and sense of right and wrong at home. Politics is all about who gets how much of what, and there are no rules to speak of. When you reach the point of complete disgust, remind yourself that politics is the alternative to war, and ask yourself whether you’d rather fight it out in the political gutter or in real trenches.
@12 You said: “Social service providers complain about anything that raises costs. The should be more open to demand reduction strategies. ”
The dilemma is that social service providers who want to work on demand reduction strategies find that doing so requires acting politically. Unfortunately, the second a non-profit social service provider acts political in this way, they are likely to have their funding eliminated from multiple sources.
Much of the money that goes to service providers, does so because it keeps a lid on demands for more agressive and equitable redistribution of resources and reductions in income inequality.
Rabbit,
You seem to be acknowledging & defending the hypocrisy of those supporting the min. wage increase. You justifying hypocrisy by saying we need to deal with other issues like global warming first is a cannard. Would you be as ok with the hypocrisy if it were on the other side of the fence? I am guessing not. That is what is so disengenous about $15NOW, because really they are pushing $15 NOW, but apparently not for their political allies, only business who aren’t their allies. This kind of deal making is corrupt and emblematic of the cronyism in DC which is also digsuting.
I am still waiting to hear why total comp is ok for the unionized employees at a multinational behemoth of a company like Hyatt, but an even more generous benefit package at a local company like Dicks Drive-In is “poverty wages”.
@25 Typical tactic of the Cheap Labor Conservative.
When the other person cannot come up with a complete “Unified Theory of the Economy” that neatly answers every situation, regardless of political realities,
then the Cheap Labor Conservative dismisses any proposal as being incomplete as an excuse to change nothing.
@ 26
Typical tactic of someone who up until last week thought that the CBO’s estimate of job losses in a ‘likely range’ of up to a million people if a national $10.10 minimum wage was instituted might be a “corporate lie”.
What you missed @26 when attacking @ 25 is that he had said above @ 15
No I actually support raising the minimum wage, both federally & locally.
So, he does not advocate changing nothing, and your accusation is blatantly false. He is asking for some consistency and pointing out hypocrisy when favoritism is apparently being played.
@25 Being cynical about hypocrisy isn’t defending it.
@ 28 Rabbit,
Well at least you acknowledge the hypocrisy of $15NOW & Hanauer, that’s more than most are willing to do.
Hmm, I see nothing on 15Now’s site or from Sawant that say they support a credit for benefits.
In any case Sawant and the 15now people deserve a lot of credit. We’ve gone from a climate where increasing the minimum wage isn’t even on the table to one where politicians are scrambling to get in front of the issue.
I must say I’m impressed with Sawant so far. I’d love to see her replace Frank Chopp. I even think she should be on the short list for replacing McDermott when he retires.
@29 Let’s not lose focus, though. The issue isn’t the hypocrisy of this or that group. Playing the hypocrisy card is just a debating tactic used by people who don’t want to debate issues on the merits.
The issue before us is how to support the working poor who can’t make enough from their jobs to support themselves and their dependents.
Should we do that with taxpayer-funded “safety net” programs or put the burden on employers through wage mandates? Or rely on private charity instead of government programs? Or none of the above, just let them starve?
That’s the question. Delving into the human frailties of debate participants deflects the discussion away from the real issue and isn’t productive.
Minimum wage laws are a form of government price controls, and like all such interventions, they create market distortions.
The legitimate arguments against minimum wage laws are straightforward: Don’t mess with the free market, don’t overburden employers, don’t expect business to solve all of society’s social problems, etc.
Minimum wage laws are part of an American tradition of meeting people’s needs through the mechanism of employment. We’ve asked jobs to carry all sorts of freight in addition to the paycheck that provides food, shelter, and clothing: Social security, Medicare, health care, pension, insurance against workplace injury and unemployment, etc.
It’s not necessarily a good idea to do that, because under this system, losing a job means not only loss of the paycheck that pays rent and buys food, but also loss or impairment of nearly everything else of an economic nature that people need and depend on.
The system of burdening employers with responsibility for our overall well-being came about by happenstance and in a patchwork manner. It didn’t evolve that way because it was a logical way to address our people’s needs. Most of the employment-centric benefits structure that exists today was a product of the Depression and World War 2-era wage-price controls that prohibited employers from competing for scarce labor by raising wages (so they competed by offering benefits instead).
This system wasn’t necessarily ideal even in the era of lifetime employment. It created its own market distortions. For example, the lack of portability in health coverage and pensions discouraged people from changing jobs. So, people stayed in jobs where they weren’t happy, or passed up opportunities for career advancement, because they risked their economic security by leaving where they were.
Today, with lifetime jobs gone and workers frequently changing jobs because they have no choice, linking personal economic security so tightly to the current job and making employers responsible for so much of their workers’ personal welfare makes even less sense.
But we’re locked into that system, not by tradition, but by political ideology that refuses to let government take over that role from employers because doing so implies bigger and more powerful government.
But the solution that conservatives want to impose on workers isn’t acceptable to workers. They want to relieve employers of these burdens, but they’re not only unwilling to shift these responsibilities to government, they want to dismantle what government safety net exists now. That would leave workers to provide their own safety net from ever-diminishing earnings.
At this juncture, as a sidebar, I should note that some of these functions were provided by unions — for example, unionized construction workers who had many employers due to the nature of the industry typically received their health and pension benefits from the union — but conservatives also want to dismantle unions (and have gone far toward achieving that objective).
Mandating the wages employers must pay through laws is not the best way to satisfy the basic needs of our workforce. It is a less-bad way of doing it than giving that responsibility to government when we constantly have to wage political fights with Republicans just to maintain the incomplete government-based safety net we have now. And it is way less bad than what conservatives want to do, which is leave workers twisting in the wind to fend for themselves as best they can, under an economic system that’s stacked in favor of employers at every level.
Some of us think what conservatives want to do to workers is just outright evil. They, not we, are guilty of creating such a political climate — through their intransigence, through their implacable hostility to workers’ interests, through their unwillingness to even acknowledge the problem much less engage in productive discussion of constructive solutions. This means we’re stuck with the current employer-based system, and it leaves us with no choice but to shove minimum wage laws down employers’ throats, because the alternative is unacceptable.
So, if those of you who oppose raising the minimum wage to a livable level don’t want that burden imposed on employers, then let’s talk about expanding the role of government to take over that responsibility. To a certain extent, government already does through things like the EIC and food stamps, but if you don’t want the minimum wage raised, then we need to have a conversation about expanding government spending to fill in the gap that leaves in satisfying the needs of our economy’s low-wage workers.
If you’re not willing to have this conversation, then there’s nothing to discuss, and we liberals have no choice but to raise the minimum wage over your objections.
@30…Replace a light Socialist, with an ardent Communist…yipee!!!!
@33 Just what this blog doesn’t need — another troll blockhead who thinks minimum wage is communism …
@34…I’d say the desire to seize private industry…pretty much makes one a Communist.
@35 Does that work in reverse, too? In other words, is a Nevada rancher who seizes federal land a communist?