I nearly forgot to post this!

R is a Eureka action which would increase the minimum wage to $12.00 for all businesses with 25 or more employees working within city limits.  All the usual arguments about minimum wage increases from both sides have been thrown into the mix with both sides citing studies – cherry picking those which support their positions.

The fact is, there is mixed data on minimum wage increases.  In some cases the economies improved afterwards, while in others they declined.  Whether the wage increases were a critical factor in those verdicts are also subjects of debate.  But if you choose your studies carefully you can make a very convincing argument either way.  But whether the increases have been to an economy’s benefit or detriment, or whether they had any significant influence at all, really depends on the particulars of each case – factors including the nature and structure of the local economy, where the economy is on the recession/inflation cycle, how much money is in the economy, whether the region is rural or urban, etc.

On the up side of the increases, they are stimulative.  They put money into the hands of consumers who will spend every penny.  Unless they are teenagers, they probably won’t have money to save.  The increases will go to purchase goods, or to pay off debt – both of which are beneficial to an economy.

On the down side they can lead to layoffs, or even take a business out if it operates on a really tight margin.  It can lead to jobs being moved out of town.  And it can be inflationary – though actually this country could use some inflation.  We haven’t had anything approaching an inflation problem in nearly a decade.

It may be that the layoffs offset and maybe even kill the stimulative factor.  It may be that the stimulation leads to more sales and reverses the layoffs.  Economies are unpredictable, and like living organisms often don’t respond to the stimuli as projected.  And again, even if an economy improves or tanks, we can rarely know for certain the cause.

All of this misses the point.  If we are going to have a minimum wage policy, then it should keep up with cost of living increases.  Otherwise, we shouldn’t bother.  I’ve read arguments that minimum wages weren’t intended to guarantee basic needs.  If not, then what’s the point?  The fact is that most people earning minimum wage are not teenagers getting work experience.  Most depend on every penny they can earn, and despite NJ Governor Christie’s recent rants that increasing minimum wages isn’t going to change lives, again, that’s not the point.  It’s money put into people who work hard, often in demeaning jobs which should be higher paid just for having to put up with being treated like a child – the assumption being that you are in such a position because you are a loser without abilities or drive.  I’m not going to bother to list circumstances which might contradict those assumptions.  Barbara Ehrenreich did an excellent job in Nickle and Dimed – which should be mandatory high school reading.

The minimum wage has declined in real dollars from its inception – the increases haven’t even come close.  John Fullerton corrected me in the thread below and I checked into it.  The Department of Labor graph shows that minimum wage actually increased more than not in terms of real dollars well into the 60s.  However, they have declined pretty consistently since 1970, with a recent spike.

Moreover, in my socialist-leaning opinion the primary reason, among many, for the fact that we will probably never “recover” from the 2008 crash – in terms of restoring the American Dream which reached its apex in the late 60s when a fry cook could afford to buy a home in most markets – is the concentration of wealth and the increasing disparity between rich and poor.  Say’s Theorem is dead among those who are literate – Say’s Theorem being the “supply side” principle that if you put money into a wealthy person’s hands he will make use of it which is productive to the whole economy.  It hasn’t happened.  The rich are sitting on a record 15 trillion dollars by some estimates, increasing with tax breaks, and there is no trickle down.  15 trillion in spending power sitting idle while obsession over deficits prevents the Keynesian stimulus from being employed which has ended every other recession since World War II, even when Republicans have been in power.

It makes more sense to put money into consumer hands and let the Say’s Theorem set chase after it.  That is when they might be productive.

I am very critical of the decision to limit the measure to Eureka.  It is both a practical and political problem.  Businesses can move out of Eureka, but they probably wouldn’t move out of Humboldt County.  On the other hand, spenders will have more money to spend, and they will probably spend it in Eureka.

The bottom line – I will support it because people on the bottom rungs of income are hurting and they need it.  Maybe there will be a few layoffs or increased prices, though they have to compete with businesses outside of Eureka, and really, prices are dictated by what people will pay or “what the market will bear.”  You can try to pass the increases off onto the consumer, but the consumer may not pay it. So I don’t think there will be significant layoffs or closures.

But even if it means I have to pay a little more for my bagel, or drive outside of town to have a sandwich made for me, I would rather my server have that extra little bit of money.  No, it won’t change her life.  But it may allow her to buy a pair of shoes.  Or allow her child to play in the soccer league.  Or buy some produce instead of pulverized starch processed food.

In short, I’m supporting the measure because these people deserve a little more, and I’m willing to pay the price for it.

Addendum:  Okay, duh.  Somebody pointed out to me offline that the county can’t pass a living wage ordinance binding on the municipalities, so basically it would take simultaneous measures in each jurisdiction.  So I guess it makes sense to start in Eureka if we’re going to to take a county-level approach.

I have to say that Eureka is the smallest jurisdiction I know of which has taken this question up.  Does anyone know of others as small?