Minimum Wage Caveats and Local Update

minimum_wage_nationwideI recently wrote about how I worried minimum wage hikes in the city of Los Angeles could hurt the same people the law is supposed to help.

Two caveats go with that thought. First, I might be wrong. Second, San Antonio is already in the midst of a distinct minimum wage hike that deserves some context and background explanation.

I might be wrong
Anecdotally, I think my reasoning against private-sector minimum wage hikes is solid, but experts don’t necessarily agree with me.

Economists who have studied the issue argue that historic data in the U.S. does not agree with my fear of increased unemployment, noting evidence showing little effect on unemployment rates with moderate changes in the minimum wage.

Those economic studies, however, covered wage increases of approximately 10 percent — rather than the Los Angeles hike of nearly 60 percent. In addition, economists typically have studied federal minimum wage law changes, not municipal changes that create the “wage island” effect. So, although economists’ data doesn’t support my view, it typically covers a different set of conditions.

Supporters of minimum wage laws also make two compelling arguments.

First, they note that better-paid minimum workers tend to spend such a high proportion of their incomes that wage hikes actually stimulate the local economy through higher consumer spending, creating more overall wealth.

Second, wage hike supporters argue that stagnant wages over the past four decades in the U.S. — especially considering increases in worker productivity — mean that wages for the bottom of the labor market could rise quite a bit before they dampen economic growth.

These are fine points. I continue to hew to the muddled middle when it comes to private-sector minimum wage hikes.

Interestingly, the Los Angeles Times quotes L.A. Councilman Paul Koretz, who admitted uncertainty after his vote: “This is an experiment. If anyone tells you they know exactly how this is going to go … they’re not being honest with you.”

minimum_wage_Los_angeles

I like that.

Public-sector wage hike
It turns out that San Antonio’s two governments — city and county — currently plan similar-sounding, but distinct, minimum wage hikes, up from $11.47 to $13 an hour.

The San Antonio and Bexar County plans differ from Los Angeles’ law because it limits the minimum wage hike to employees of the governments themselves, not employees of private companies.

Bexar County announced earlier in the year that government employees would earn at least $13 an hour beginning Oct. 1. In addition, under the city’s currently proposed budget — to be voted on in September — city workers at the bottom of the pay scale would see their pay raise go into effect next January.

cops_metro

Local advocacy group COPS/Metro Alliance successfully pursued raising minimum wages for city and county workers over the past year. They raised with government leaders the issue of a “living wage” for government employees, arguing that workers should reasonably expect to earn enough at their jobs to be free of public-sector subsidies tied to poverty programs, such as food stamps.

Mike Phillips — a leader with COPS/Metro with First Unitarian Universalist Church — estimates the wage hike could help not just the 1,700 city and county workers directly affected, but perhaps twice as many workers who already have wages above the minimum, as those workers see their pay adjusted higher as well.

Over time, Phillips says, COPS/Metro would like to see the $13-an-hour minimum stepped up to $15 an hour, by 2018.

Public, not private sector
The San Antonio wage hike, compared to the Los Angeles plan, cannot lead to greater unemployment for a number of reasons. For starters, government workers generally cannot be “outsourced” to areas beyond city or county limits, nor completely offshored, as I feared with the Los Angeles situation.

Perhaps most importantly, public employers have a greater obligation to address the moral issue of “a living wage” than do private employers. Unlike private companies, public entities (such as governments) explicitly purport to represent the “public good” in everything they do. The public good should reasonably include paying workers so that they can live above the federal poverty level.

Nobody really asked my opinion but these wage hikes seem not only reasonable, but providing a “living wage” for public-sector employees seems like an essential step.

Steep obstacles in Texas 
Minimum wage advocates may be winning battles across the country, but they face steep obstacles in Texas.

San Antonio state Rep. Trey Martinez Fischer unsuccessfully attempted in the last Texas legislative session to bring to voters a state minimum wage of $10.10 per hour, up from the federal $7.25 minimum. He had to attempt a statewide public vote via a constitutional amendment because otherwise the state Legislature has the power to set (or not set) the private-sector minimum.

For now, Texas remains one of the states with the federal minimum of $7.25 per hour.

Dallas County workers currently receive a minimum of $10 per hour, and county lawmakers attempted last year to extend that wage floor to government contractors. In December, while still attorney general, Gov. Greg Abbott blocked that attempt.

Meanwhile in Bexar County, COPS/ Metro still is working on extending the $13 per hour wage to hospital employees and school districts.

I asked COPS/Metro’s Phillips if he envisioned a private-sector minimum wage campaign in San Antonio or the state of Texas.

His response: “We don’t tilt against windmills if we can help it. It doesn’t seem realistic.”

 

A version of this post ran in the San Antonio Express News.

 

Please see related posts:

Los Angeles minimum wage hike seems risky

Inequality in America – Video representation

 

 

 

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