Minimum wage: Residents of SeaTac, Wash., will vote on hiking the
minimum wage in November. At issue is whether a higher minimum wage
would dim job prospects for young and unskilled workers.
By Mark Trumbull
Should the minimum wage go up to $15 an hour? That’s the question
that’s suddenly in play in the Seattle area.
Residents of SeaTac, the city that’s home to the Seattle-Tacoma
airport, will have a ballot vote on that idea this November. And
others in the region, from venture capitalist Nick Hanauer to Seattle
politicians, are backing wider moves to boost bottom-rung pay.
If $15 sounds high, it’s because it is more than double the federal
minimum wage of $7.25 per hour.
States and cities are free to pass higher minimums, and Washington
State already has the highest minimum wage in the U.S., a $9.19 hourly
rate that rises with inflation each year.
The debate in Seattle is being waged against a backdrop of national
anxiety about jobs and incomes. Earnings for middle-income families,
adjusted for inflation, are about where they were in 1989, according
to tracking by the Census Bureau.
And for low-wage households, those in the bottom 10 percent, real
incomes today are below the low-wage levels in 1978.
President Obama and congressional Democrats are calling for a hike in
the nationwide minimum wage, saying it will help keep the American
dream of rising prosperity alive for working families.
What would a $15 minimum do?
If someone has a typical job, roughly 34 hours per week, that
translates into annual income of $26,520, compared with about $16,250
for the Washington State minimum, or about $12,800 at the federal
The jump, supporters say, would mean that even low-wage jobs could be
For reference, the federal definition of poverty for a single person
in 2013 is income below $11,490. For a family of four, the poverty
threshold is $23,550.
A big question, though, is whether pushing up the minimum wage would
dim the employment prospects of many who need jobs the most: young or
In economics, the general rule is that if something becomes more
expensive, people will buy less of it. In this case, critics warn that
minimum-wage hikes will cause employers to scale back on hiring —
using alternatives such as automation or foreign outsourcing wherever
A countering view, held by backers of the Seattle wage push, is that
if more U.S. workers had decent incomes, consumer spending would rise
and help fuel a virtuous cycle for the economy — including new hiring.
Economists haven’t reached a consensus on the optimum minimum wage
policy. White House economist Alan Krueger is known as a proponent of
the idea that the minimum can be raised without having adverse effects
But when two other economists, David Neumark of the University of
California at Irvine and William Wascher of the Federal Reserve Board,
surveyed studies that have been done over the past two decades, they
found the evidence weighted toward the view that boosting the minimum
wage has at least modest negative effects on job creation.
Some supporters of greater wage support for low-income workers favor
moves such as expanding the Earned Income Tax Credit — a move that
doesn’t directly burden employers with new costs.
Americans generally support the idea of raising the minimum wage, with
71 percent in favor of a hike to $9 an hour in a recent poll by the
Pew Research Center.
By comparison to other advanced nations, the U.S. has a low minimum
wage. The Organization for Economic Cooperation and Development pegs
the U.S. minimum at 38 percent of the nation’s median wage. That’s
similar to Japan, but the base wage is near 50 percent of the median
(or higher) in nations including Australia, Britain, and France.