Why Fight for $12 When $15 is Better?

Fight for $15 supporters won a major victory on Monday when the U.S. Supreme Court declined to hear a challenge to Seattle’s recent law phasing in a $15 minimum wage. That refusal let stand a lower-court ruling against restaurant franchises that asserted the Seattle law’s different phase-in rates for chains and for mom-and-pop businesses were unconstitutional.

The Supreme Court’s dismissal of the case sets a strong positive precedent for supporters of an increased federal minimum wage.

Now the Fight for $15 moves to Washington, D.C., in a big way – on both its political and its commercial corridors.

On the political side, Democratic Presidential candidates Hillary Clinton and Bernie Sanders continue to debate how firmly the Democratic Party should be on the side of the Fight for $15 movement, after seven years of having the national minimum wage stagnate at $7.25.

Meanwhile, the District of Columbia itself prepares for a local electoral battle over whether it will become the next big city to mandate a $15-an-hour minimum wage for its residents.

Clinton’s message on the minimum wage has been dodgy, but she says she supports a federal minimum wage rise to $12 by 2020, while supporting the prerogative of individual cities and states, like Los Angeles and New York City, to go toward $15 if they choose. More recently, Clinton has added that she would support congressional legislation that increases the federal wage to $15 so long as it meets certain stipulations, including phasing in the change over a number of years and adjusting for areas with low costs of living.

Meanwhile, Sanders says he supports a federal minimum wage rise to $15 by 2020, Sanders justifies his bolder and less equivocal position by arguing that the federal minimum wage should match the dramatic increase in worker productivity, the rewards of which have not been shared proportionately with workers for the past three decades. The Economic Policy Institute says that there has been a 72.2 percent growth in worker productivity since 1973, but “essentially none of this productivity growth flowed into the paychecks of typical American workers.”

So is $12 or $15 better? Research done by EPI and economist Alan B. Krueger suggests an increase to $12 will be beneficial on net. But even many leaders sympathetic to the plight of low-wage workers ask, wouldn’t $15 be too much?

In 1993 Kreuger co-authored a landmark study of a minimum-wage increase in New Jersey that showed that low-wage workers did not suffer any negative effects on employment opportunities or wage rates. More recent studies point to the same findings: Increasing the minimum wage works.

In fact, as EPI Economist Elise Gould said in this article, “In 2015, wages for low-wage workers rose faster in states that increased their minimum wage than in states that saw no minimum wage increase.” Not only are we seeing proof of the benefits of new legislation, but Gould notes that women in particular benefit more from this change.

Cities like San Francisco, New York and Seattle take different approaches to lead the change to livable wages. After approving the minimum wage change in 2014 to phase in $15 by 2018, San Francisco is seeing an initial boom in wages, especially for women and minorities. Unemployment levels in San Francisco also continue to decrease largely below the national rate, for as of February 2016 the Bay Area reports 3.3 percent unemployment, compared to the national unemployment rate of 5 percent.

Taking note from other cities, the nation’s capital will bring a $15 minimum wage to the ballot in November. A study released Wednesday by EPI on the effects of a $15 minimum in D.C. concludes that “the measure would strengthen many low- and middle-income households’ spending power, improve their living standards, and bolster the region’s economic vitality.”

If enacted, 114,000 workers in the District would see higher wages by 2020, the study says. Specifically, the initiative would benefit 81,000 children in the city who have a working parent. A distinguishing factor of the District’s initiative is that it also proposes to eliminate the tipped minimum wage by 2025, with incremental increased leading up to that year.

Changing the federal minimum wage to $15 is not only necessary to ensure working Americans receive livable wages, but it is also economically viable and politically achievable. Clinton would do well to follow Sanders’ lead and push for a $15 federal minimum wage in order to provide the most vulnerable, hardworking Americans the income they deserve – and we need to keep the pressure on to help make that happen.

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