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Tuesday, July 30, 2013

SeaTac's $15 / Hour Minimum Wage Initiative: A Multidimensional Issue

SeaTac's minimum-wage initiative is causing quite a stir in the area. The initiative proposes to raise the minimum wage to $15 per hour, from the current state minimum of $9.50 per hour. This would make SeaTac have a minimum wage that is extremely higher than surrounding areas. There is a lot of criticism toward this initiative. There’s concern that raising the minimum wage in SeaTac is going to make it unappealing to businesses and investors, as who would want to have a business where the labor is going to be more expensive?

This tendency we also see on a large scale in our country and in the world, in the form of out-sourcing, where the tendency is to always look for the cheapest labor possible, in order to maximize profits. Though it can be contended whether that would really be real ‘profits’ when it is not profit that is naturally earned, but is artificially created by not effectively compensating the individuals providing the labor. 

One of the primary arguments against raising the minimum wage, whether at a local level or country-wide, is that this will threaten small businesses and force them to hire less employees or go out of business. Yet, if a job structure can't viably afford to pay employees a proper remuneration, then should that job exist? It’s not a sound business structure is it, if it can’t effectively pay those it would employ? 

The mayor of Seattle Mike McGinn has caused a stir recently by suggesting that a proposed Whole Foods be rejected on the basis that Whole Foods typically does not pay its employees enough. He’s received a lot of criticism for this move, with some saying that this is uncalled for and not appropriate grounds to reject what is a legal business – but this raises some interesting and important points for consideration, namely – should it be legal for jobs to not pay the individuals who provide them with labor, enough to effectively live. And does that even make sense when it’s the laborer who creates the value through their labor that even makes a business possible? 

Mayor Mike McGinn has received some criticism for viewing employee wages and benefits as a point to take into consideration when determining whether a business should be allowed into the community or not. Shouldn’t that be something we take into consideration though, when the companies which we might accept into our neighborhoods are going to affect the very areas in which we live, what kind of jobs are available and thus what level of quality of living is available to us, and for our children who will one day be looking for jobs themselves. What kind of opportunities are we creating that will be available to them in the future? The argument that this should not have any bearing in determining whether to allow a business in the community doesn’t make sense as it has a direct and significant impact on all of our lives, and thus is certainly something to take into consideration.

Yet, there are actually a lot of dimensions to this situation, and it’s not so easy as just implementing a higher minimum wage. We have to consider all aspects of our labor system, to ensure that it remains stable and viable, to effectively support everyone. Which means we should also consider how to ensure the stability of our businesses.

There's probably a lot of individuals out there who would like to operate a business, but don't want to go through the stress involved and the personal risk involved, which means that a lot of individuals are simply not going to take that risk. Meanwhile, those currently operating a small business certainly don't want to be going through that stress and risk themselves either. I don't know why we would want to have such a hostile ‘you’re on your own’ environment for businesses when it's businesses that provide jobs, because that hostile environment then translates directly into the worker experience and situation as well, where workers will have to work in sometimes bordering on slave labor conditions, understaffed, overworked, and underpaid to top it off, for all the labor they're providing.

So it's a two-way street, in essence, the businesses need the laborers, without laborers there is simply no business, there's no value created through labor as goods and services to sell. And laborers need a business structure through which to disperse those goods and services to those who would buy them. Thus, it's in everyone's interest to make sure that all aspects of labor are able to function effectively, as quite literally all of our livelihoods depend on it.

With such consideration in mind, the Political Economy Research Institute conducted a study into how it would affect businesses to raise the minimum wage, where they found that a minimum-wage increase does not necessarily significantly raise employer costs, and are covered by a modest raise of price. And with higher wages, you'd have a more stable and robust economy, as individuals would obviously be more financially stable themselves, and able to spend more and spend more regularly, which would make things more stable for businesses, unlike the situation currently, where many employees of large companies/corporations have to go on food stamps when available work volume is low and employers cut employee’s hours.

Sources:
Most Minimum Wage Earners Can't Afford Necessities of Life
https://www.youtube.com/watch?v=F7Pq_FDIcpw

Editorial: Mike McGinn’s Whole Foods wage campaign out of line

Mayor’s race ignited as McGinn called out on Whole Foods attack


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