When Los Angeles Mayor Eric Garcetti signed a law Tuesday forcing the city’s employers to begin paying a $15-an-hour minimum wage by 2020, the move wasn't exactly applauded by the business community.
But more and more, the business community is losing this battle. Not at the federal level, mind you, but at the state and local level.
In fact, so many cities and states have boosted their minimum legal wage above federal government’s $7.25 an hour that at least 60 percent of the country’s workforce now lives in a place in which the minimum wage sits well above that national requirement, according to David Cooper, an economic analyst with the left-leaning Economic Policy Institute.
And in 2014 alone, voters in four red states – Arkansas, Nebraska, Alaska and South Dakota – passed ballot measures requiring employers to pay workers more than the federal minimum wage. And some of the measures didn’t just boost wages, they also included features that pegged the state’s minimum wage to increases in the cost of living too.
Critics of minimum wage increases have long argued that the measures are unnecessary because many minimum wage earners are teens working after-school jobs for spending money or that other workers are almost certain to ascend the wage scale over time. And some critics have repeatedly warned that minimum wage increases can produce dire problems for the very workers they aim to help. When the cost of employing a worker rises, these critics argue, employers are less likely to create new jobs and more apt to cut existing ones.
For a long time, that was the official economic theory that guided much of the nation’s thinking on the minimum wage. Now, it seems, the standard arguments for keeping the minimum wage, well, minimal simply don’t have the same pull that they once did.
The U.S. Labor Department maintains a myth-busting page on its Web site full of information about the minimum wage -- including what's known about what happens when they rise and when they don't. And a team of researchers digging into this question for a division of the Labor Department found that minimum wage increases almost never cause job losses but do dent new job creation. Economists outside the government appear to remain divided.
What is certain is that quite a few adult workers earn the federal minimum wage or something just above it. In fact, when Congress was contemplating a bill in 2014 that would have boosted the federal minimum wage to $10.10 an hour, the Economic Policy Institute gathered federal data and found that nearly 90 percent were at least 20 years old. More than one-third of these workers were at least 40. Just over half, 54 percent, worked full-time, and more than a quarter had children. In addition, a disproportionate share of those earning less than $10.10 an hour are women or racial and ethnic minorities.
There is some momentum on the campaign trail. Democratic presidential candidate Hillary Clinton has expressed support for raising the minimum wage but has not specified a dollar figure. And both Sen. Bernie Sanders (I-Vt.) and former Maryland governor Martin O’Malley, who are vying for the 2016 Democratic Party presidential nomination, have expressed public support for boosting the federal minimum wage to $15 an hour -- a number that was once reserved for only the truest of true believers when it comes to raising the minimum wage.
Any federal increase -- even $10.10 -- would have an effect across most of the country. Today, 29 states and the District of Columbia require hourly wages above the federal floor. But none top Washington state's $9.47 an hour. So that's still a long way from LA's $15.
See here to find the minimum wage in a particular state.
About 73 percent of households which receive some form of public assistance now include at least one working member, according to a University of California Berkeley Labor Center analysis.
This, of course, makes the public cost of high wages hard to deny. Perhaps that's why a January 2014 Pew Research Center poll found partisan disagreement about what should be done to address income inequality in the United States. But a slight majority of Republicans agree with overwhelming shares of independents and Democrats that the federal minimum wage should be reset to $10.10 an hour.
Increasingly, though, advocates have set their sights much higher than $10.10. Since 2014, four cities – Seattle, San Francisco, Chicago and now Los Angeles -- have gone further than the states that surround them, phasing in laws that require employers to pay anywhere from $13 to $16 an hour. And ballot initiatives have been proposed or votes scheduled in at least four cities and two states.
What’s more, in June, Kentucky Gov. Steve Beshear, a Democrat at the helm in a red state, boosted the minimum wage for about 800 state employees from the federal minimum of $7.25 per hour to $10.10 via an executive order. The change will go into effect next month. When it does, lawmakers in that state’s capital might have also approved a measure boosting the minimum wage for every Kentucky worker to $10.10 an hour.
With congressional action at a standstill, the question now is not why Los Angeles boosted its minimum wage, but which city or state may move in that direction next.
And from there, you can bet minimum wage hike activists and opponents will be mining the economic effects in these cities for the next big national debate.