This month started out with a remarkable history-making event. On June 2 Seattle became the first major city in the U.S. to establish a $15 per hour minimum wage. And even more remarkably, this decision was made by its city council in a unanimous vote.
There were two significant developments in Seattle that contributed to this notable outcome. Last year "15 Now," a grassroots movement made up of groups of workers and activists, met weekly, held conferences and debates, organized rallies, and engaged thousands of people around the city about the need for a living wage, especially for low wage workers employed in fast food and retail services. As a by-product of this effort they were able to elect Kshama Sawant, a Socialist candidate especially interested in economic justice issues, to the city council to carry on the struggle within that segment of the local government.
At the beginning of this year, Seattle Mayor Ed Murray brought together a group of 24 business leaders, union bosses and community advocates to work on a recommendation for a minimum wage higher than the state's $9.32 current figure. He chose two men on opposite sides of the debate to co-chair the group, giving them four months to work out a deal.
There turned out to be serious disagreements in the group, however. Labor leaders wanted a pay increase to take effect immediately; business leaders wanted it phased in over many years. Labor leaders insisted that tips and benefits not count as part of a person's wages; business leaders thought they should be able to pay lower hourly rates in such situations. A month before the deadline, the mayor whittled the group down to eight negotiators.
On June 2, city council members unanimously approved a new $15 minimum wage ordinance that will go into effect on April 1, 2015 and be phased in over the next three to seven years depending on the size of the business. In a last minute addition to the original formulation, employers will be allowed to pay a lower training wage to teenagers. It is apparent from this plan that the members of the working group had a difficult time agreeing on the various particulars of the proposal's implementation beyond their support of the $15 figure.
There are many Seattle residents who will be anxiously waiting for the 2015 starting date. Out of the city's population of 634,535, there are presently more than 100,000 workers whose incomes are insufficient to support their families. Around 14 percent of the population lives below the poverty level. Most minimum wage workers these days aren't teenagers but family breadwinners, often single mothers who need a higher minimum wage in order to keep their families out of poverty.
Despite fears by many conservatives, recent studies have revealed that raising the minimum wage would not be "job killers" but would be of advantage to employers by increasing worker satisfaction and productivity and decreasing worker turnover. These studies have also shown that minor price increases to cover higher wages have not resulted in lower sales and profits. When workers with higher incomes become consumers, more money gets spent and circulated in local communities (something that doesn't happen when those already wealthy get additional income). The real job creators are consumers with enough money to buy.
Devising a minimum wage that is also a living wage is one of the biggest challenges before our nation today. But there is an even more life-threatening economic challenge confronting us that will destroy our nation if left unaddressed: our broken system of compensation and the massive inequality that permeates our American society.
Two brief illustrations point up this problem. As author Paul Buchheit has written, preschool teaching may be our nation's most important job. With preschool experience all children achieve more and earn more through adulthood. In our economic system, however, we do not regard or value preschool teachers as highly as we do hedge fund managers. The combined salaries of all 350,000 preschool teachers are less than the combined salaries of five hedge fund managers.
We also value income from investments more than we do income from wages and salaries. Our nation's wealth grew by almost $9 trillion in 2013. The richest 1 percent now own 34 percent of the wealth. An interesting value comparison: those in the top 1 percent made more from their investments in 2013 than the entire cost of Social Security, Medicare, Medicaid, and the entire Safety Net (WIC [Women, Infants, Children], Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, and Housing).
Although many people are interested in the question "Is there life before birth?", a more important question for us becomes "What kind of life is available to us after birth?"