Dear California lawmakers: A rising tide lifts all boats
While California legislators have been reveling since September in their accomplishment of passing the minimum wage increase, from $8 to $10 by Jan. 2016, Seattle City Council stole their thunder this week by unanimously approving an increase of the city’s minimum wage to $15 per hour. The wage increase will take place gradually over several years, large businesses by April 2017 and all businesses by 2021.
We have heard it time and time again — if you mandate employers to pay their employees more, they will have to cut back hours, lay off employees and raise prices or even pull the plug since overheard will just be too high. But wait a minute. If hamburger flippers, filing clerks, parking attendants, etc., were all paid more for the sort of low-skilled jobs that many think shouldn’t be paid higher wages, not to mention those who work difficult jobs for minimum wage, what happens when they spend more money in their local economies and eventually everyone has more to spend as the cash comes back through economic growth? It’s a proven fact that middle-class folks don’t hoard money like the top 1 percent or even the top 10 percent. They spend it. They may save a small chunk for retirement, and of course a good chunk goes to taxes, but in reality, they don’t sit on their money and watch it grow and then do nothing with it. They buy cars and college educations. They buy new flat-screens and tablets. They buy nicer clothes and better meals — or just more clothes and more food. These people are what keeps the economy going.
While comparing California to Seattle isn’t necessarily fair, when comparing Washington to California, there are some stark contrasts. In a 2013 MSNBC study “America’s Top States for Doing Business,” which included various issues relating to business and quality of life, Washington ranked 36 in the nation for cost of living — its minimum wage was then the highest in the country at $9.32 at that time. California, with is higher cost of living, ranked 45. If it costs more to live in California than Washington, why aren’t we demanding higher wages? Why is Washington outpacing us when it comes to the welfare of its workers? In fact, Washington ranked 21 overall in the combined score of cost of doing business, economy, infrastructure, workforce, quality of life, technology and innovation, business friendliness, education, cost of living and access to capital. California ranked 47. Sure, the demographics are different, the job opportunities are different, even the weather is different, but the politics are similar. What do the Seattle City Council, Washington legislators and their constituents understand that their California counterparts don’t?
We know that trickle-down economics doesn’t work. So why not go with the theory of a rising tide lifts all boats? Is California going to wait and see if Seattle goes bankrupt first or watch for mass layoffs before taking that great leap to mandate higher wages? Perhaps. It’s just discouraging that so many are left in limbo at the pay of $8 an hour — it will rise to $10 per hour by 2016 — and their quality of life suffers as the top few hoard their riches. We are better than that. It’s just unclear what’s holding us back. Now is the time for us to figure that out and be the state that leads others to progress, not the other way around.
To see the MSNBC study, go to www.cnbc.com/id/100824779.