The Fight For $15 Sets Its Sights On A $20 Minimum Wage

Original Article: https://www.investors.com/politics/commentary/minimum-wage-fight-for-15/

  • Author: Michael Saltsman

  • Publication Date: November 2018

  • Newspaper: Investor's Business Daily

  • Topics: Living Wage, Minimum Wage

Has the Fight for $15 set its minimum wage aim even higher?

In Oakland, voters will consider Measure Z, which would set a minimum wage as high as $20 an hour — that’s $40,000 a year, full-time — for the city’s hotel employees. In San Francisco, Mayor London Breed and the Board of Supervisors recently reached a deal to fund a minimum wage of up to $18.75 for an in-home support worker in the city. (Employees of nonprofit city contractors will also see their pay floor rise about $15.)

This trend isn’t limited to the West Coast. Last month, the Port Authority of New York and New Jersey approved a $19 minimum wage for 40,000 airport workers at Newark, Kennedy, and LaGuardia airports. The lobbying campaign was the handiwork of the Service Employees International Union (SEIU), whose members praised the policy using quotes that were nearly identical to those they used to support $15: “Making $19 an hour means I won’t have to constantly look for that second job just so I can make ends meet.”

Labor unions have a history of beta-testing new wage floors in targeted industries or locales before advocating for broader requirements. In Los Angeles, for instance, a hotel-specific $15 minimum wage was the precursor to a citywide wage requirement that was enacted the following year. Those citywide ordinances in Los Angeles, San Francisco and elsewhere then set the stage for a new statewide pay floor.

The current pay demands in the $18-$20 an hour range will likely inform the political feasibility of new minimum wage demands in the years ahead. But political feasibility doesn’t correspondent with economic feasibility. Predictably, minimum wages set at a historically unprecedented level have caused significant consequences for employers and employees who are unable to offset the higher costs through higher prices.

The Bay Area has faced an unusually high rate of closures in the hospitality industry. The owners of a now-closed coffee shop in Berkeley, Calif., described their frustration: “We have tried a number of strategies to increase our revenue and profit in anticipation of (a higher minimum wage), but have been largely unsuccessful. …We introduced new offerings and as a last resort, raised prices. The result of the price increases has been lower volume and relatively flat sales revenue.” (Dozens of additional stories are available at The Faces Of $15 website.)

They’re not alone in facing this predicament: A study released last year from economists at Harvard University and Mathematica Policy Research identified a spike in restaurant closures following each $1 increase in the Bay Area’s minimum wage. My organization’s analysis of federal data found that cities such as San Francisco — where labor costs are high and tips aren’t counted toward an employee’s wage — have 20% fewer tipped servers per full-service restaurant. (This trend was memorably captured in a New York Times article this summer about the “fine casual” trend where customers serve themselves at nice restaurants.)

A shifting of the minimum-wage goal posts was inevitable. Once California decided to embrace a $15 minimum wage statewide, there was little chance that the Bay Area’s liberal locales would leave their own wage floor at the same level as Redding or Bakersfield. But what happens if the already-harmful Fight for $15 becomes the Fight for $20 or $25? A local, state or federal government can still decree that every job must pay a “living wage.” But the employees whose skills don’t justify it may find themselves without any wages at all.