Andrew Leigh links to a very interesting article from the New York Times magazine on grass roots minimum wage campaigns in the US at municipal and state levels. One activist describes the initiatives, which are popular with voters, 60% of whom have at one time themselves been on minimum wage, as the left’s “gay marriage”:
Though victories like the one in Florida may have done little to help the Kerry-Edwards ticket - George Bush won 52 percent of the state’s vote - Kern and some in the Democratic establishment have come to believe that the left, after years of electoral frustration, has finally found its ultimate moral-values issue. “This is what moves people to the polls now,” Kern insists. “This is our gay marriage.” Already, during the past few months, a coalition of grass-roots and labor organizations have begun gathering hundreds of thousands of signatures to ensure that proposed laws to increase wages are voted on in November. The first targets, Kern told me, will be Arizona, Colorado, Michigan and Ohio. Next in line, either this year or soon after, are Montana, Oklahoma and Arkansas, the home of Wal-Mart.
In Australia, of course, WorkChoices will prevent any such decentralised experimentation, although the message for unions should be relevant - grassroots community campaigning is often just as effective, if not more so, than national level political or communications campaigns. In the Australian context, where debate about WorkChoices (to the degree that any quantifiable gain is argued by its proponents to flow from its introduction) has focussed on the putative impacts on employment, this passage from the article is interesting also:
In simplest terms, most economists accepted that when government forces businesses to pay higher wages, businesses, in turn, hire fewer employees. It is a powerful argument against the minimum wage, since it suggests that private businesses as a group, along with teenagers and low-wage employees, will be penalized by a mandatory raise.
The tenor of this debate began to change in the mid-1990’s following some work done by two Princeton economists, David Card (now at the University of California at Berkeley) and Alan B. Krueger. In 1992, New Jersey increased the state minimum wage to $5.05 an hour (applicable to both the public and private sectors), which gave the two young professors an opportunity to study the comparative effects of that raise on fast-food restaurants and low-wage employment in New Jersey and Pennsylvania, where the minimum wage remained at the federal level of $4.25 an hour. Card and Krueger agreed that the hypothesis that a rise in wages would destroy jobs was “one of the clearest and most widely appreciated in the field of economics.” Both told me they believed, at the start, that their work would reinforce that hypothesis. But in 1995, and again in 2000, the two academics effectively shredded the conventional wisdom. Their data demonstrated that a modest increase in wages did not appear to cause any significant harm to employment; in some cases, a rise in the minimum wage even resulted in a slight increase in employment.
The union movement has been working on community campaigning for some time now. See:
http://actu.asn.au/work_rights/tools_resources/
Oh, I know that, Tim, I’m just providing a bit of encouragement
While I agree about grassroots campaigns I don’t think the minimum wage issue in itself would be so powerful in Australia. We’re not nearly so fucked as the US is yet on the pitiful wages paid to its poorest workers.
Accessible quality childcare for working mothers, on the other hand…
Part 3,000,000 in a series of ‘why I’d only ever be a Catholic if I was religious’:
although the big difference between gay marriage and the minimum wage is that 60% (if figure correct) of people have been on minimum wage, not 60% of the Right have been in a gay marriage… ha! no, but seriously, one is an imagined cultural values issue and the other affects the material conditions of existence for many people. Beyond drawing people out to vote there is little similarity.
I think the parallel (which as you say - is about voter turnout), Glen, is that in Democratic politics over the last year, there’s been a lot of discussion about framing economic and social questions as “values” issues to counter the cultural symbolism of the right’s “values” agenda.
Think of it this way:
If the 60% of people on the minimum wage got an extra couple of dollars a week in pay, then they would be spending an extra couple of dollars a week, money which will go back into the economy; shop-keepers would be getting extra money which in turn will enrich local manufacturers and distributors etc as sales go up; and as sales rise so should employment as employers can then afford to employ more staff, right?
I’m not an economist but this seems obvious. Higher wages etc can only help consumerism because people will have more spare cash to spend.
I get the feeling inflation comes in somewhere but I think the threat has been exaggerated. eg. high prices and low incomes (among other things) seem to be killing the record industry…
Christo, I agree with what you say, but I don’t thnk the working poor would have “more spare cash to spend”. Rather it is a question of buying the essentials. I read a couple of years ago that about 40 million Americans are ‘food insecure’. That is they may eat properly tomorrow but then again they may not.
Holly Sklar in Carving up the economic pie (hope that link works) said:
and:
I wonder whether the poor are becoming so marginalised that they are irrelevant to the mainstream economy.
But they vote!
It doesn’t quite work that way, Christo, unfortunately (if it did, we could just keep increasing wages and end up in economic paradise!)
Remember that the wage increase is paid for by someone — either the customers (through higher prices) or the owners/shareholders of the company. So then the customers and/or owners have less $ to spend/invest, which balances out the extra $ the workers have.
I’m not saying I oppose increasing minimum wages, just that it’s not going to boost the overall macro-economy.
Brian, that’s a fair point and I can relate to the situation…
Paul, also a fair point: as I said I’m not an economist but I’m willing to learn.
Ok so the owners, board members, CEOs etc might have to take a cut for their multi-million dollar salaries, bonuses, platinum lavatories etc.
I’ve always believed that there should be a cap on wages etc. The economy and society would adjust accordingly.
For light hearted view Ten Reasons why Gays shouldnt marry for those with some intelligence….