Throughout the year, in the wake of Donald Trump’s inauguration, there has been cause for hope that the states and cities of this country would use their own resources to pass legislation benefitting workers. Minnesotan Governor Mark Dayton shot down a measure put forth by corporate lobbyists that would have prevented the implementation of a higher minimum wage in cities throughout the state. Following Dayton’s veto, the city council in Minneapolis drafted an ordinance raising the minimum wage to $15 per hour. And on June 30th, the city adopted a measure that would raise the wage by 2024.
A bill in Congress calling for a higher minimum wage currently has 165 co-sponsors, signaling a boost in support at the federal level. The Congressional move came after similar bills passed in California, New York and the District of Columbia. Other states – such as Oregon, Washington, Colorado, Arizona and Maine – have approved slightly lower minimum wage increases (between $12 and $14.75 per hour). These legislative efforts followed the Fight for $15 strikes in 2012 and 2013.
Bad News
At the end of May, it looked like Illinois might join the progressive ranks with its own minimum wage legislation. The state legislature passed the bill and sent it to Governor Bruce Rauner’s desk where it sat until the end of August. On August 25th, the Governor vetoed the bill, pointing to a study from the University of Washington as support for his decision.
University of Washington Study
According to the study, following the implementation of the Seattle Minimum Wage Ordinance, the city’s minimum hourly pay went up to $11 in 2015 and $13 in 2016. After the second increase, workers’ hours dropped by 9 percent while wages increased by only 3 percent. This caused an overall drop in payroll averages. According to the study, low-wage earners saw a $125 reduction in their monthly pay.
Berkeley Study
By contrast, a study carried out at the University of California Berkeley found that “wages in food services did increase—indicating the policy achieved its goal.” Additionally, researchers noted that their results fell in line with previous findings from other similar studies. As for the question of hours? Researchers found “a very small hours effect.”
Berkeley carried out another study in the context of Chicago, which plans to raise its minimum wage to $13 by 2019. The study found that a higher minimum wage has had little or no effect on job growth in the city.
Criticism
Of course, both the University of Washington and UC Berkeley studies have received their fair share of criticism. According to John Meer, a research associate at the National Bureau of Economic Research, the two studies reflect an “ongoing academic debate [that is] far from settled.” In Meer’s view, studies like the one carried out at Berkeley limit the scope of analysis to just restaurant workers and analyze “raw employment levels, pooling workers of all pay and skill levels.”
Ben Zipperer and John Schmitt, of the Economic Policy Institute, observed in their EPI report that the University of Washington study excluded from its analysis employees who work “for employers with businesses in multiple locations.” That’s significant because those employees make up 40 percent of the labor force.
Final Remarks
Though Chicago is on track to have a $13 minimum wage by 2019, the state minimum wage currently sits at $8.25. This marks a setback in the Fight for $15.
