The Power of Labor Against Capital and the Fight for $15

Today, Ben Casselman from FiveThirtyEight has numbers on the impact of the “Fight for 15” campaign to raise the minimum wage to $15 on its 4th anniversary, some positive and negative:

A new report from the National Employment Law Project, a liberal worker-advocacy organization, tries to quantify the movement’s impact. The report estimates that nearly 17 million Americans have gotten raises under the various minimum-wage increases; all together, those workers have seen their annual pay rise by close to $60 billion. Another nearly 2 million workers have benefited from voluntary wage hikes announced by Walmart, Starbucks and other big employers. The NELP report’s authors argue that those raises were also the result of pressure from activists…

So far, there is little evidence that the new minimum wages are causing major problems. States that have raised their wages have in most cases seen continued job growth in their restaurant and retail industries, which together account for the vast majority of the minimum-wage workforce. A more rigorous study in July by a team of researchers at the University of Washington found that Seattle’s minimum-wage ordinance — which will raise the city’s minimum wage to $15 by 2017 — has “modestly held back Seattle’s employment of low-wage workers” and led to somewhat reduced working hours relative to what would have happened had the law never been passed.

Obviously, the impact raising the minimum wage to $15 is still mostly unknown, as most cities and states are phasing it in slowly, and there are other factors that are positively impacting the job market. However, there are a couple of other important, non-quantitative take-aways.

First, as Casselman at the end of the article notes

This much, however, is undeniable: The Fight for $15 movement has put the minimum wage fight back on the political agenda. Hillary Clinton and Bernie Sanders both came out for a $15 minimum wage during their primary battle, and although Donald Trump has been all over the map on the issue, he has at times seemed to endorse a $10 federal minimum. Meanwhile, the success of minimum-wage initiatives at the ballot box — even in red states, and even in years when Republicans made big gains — shows the broad popularity of the policy. It’s safe to say that none of that would have happened without the high-profile demonstrations across the country.

After almost 40 years of waning union power in a post-Reagan America, here is an instance of workers taking a hard stand and showing tangible success as a result -in four years, half the states have raised its minimum wage higher than the federal minimum wage. This year alone – in a year that saw substantial Republican electoral wins, four red states raised their minimum wages beyond the federal standard. Utilizing social media as a tool to inspire workers in multiple cities as well as increasing the visibility of the demonstrations, workers took control of the policy debate and, where necessary, were able to bypass hostile legislatures to enact the laws themselves. At a moment where the momentum of power looks to be in the hands of Capital,  the ability of Labor to spearhead a drastic policy shift in such short time is a needed glimmer of hope, and demonstrates the potential of workers uniting.

Secondly, many of the “negative” issues with a higher minimum wage are issues specifically because we view growth as the most important rubric for economic health. If a company is not growing – be it corporate profits, iPhones sold per quarter, or new Facebook users – the company is viewed as failing. But unending growth is not sustainable-markets are cyclical and eventually companies will peak out and start to contract. Over-investing in company growth at the expense of the company’s employees incentivizes executives to issue layoffs and benefit cuts when growth is not sustained, creating a situation where less workers are doing more work for less money, while other workers become unemployed. Changing the paradigm away from infinite growth towards a sustainable model that gives equal priority to workers and company growth would limit many negative externalities and greatly contribute to the health of the economy.

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