Wage Increases Are Bad, and Other Fairy Tales

by Jonathan Rosenblum

The prospect of being required to pay workers a living wage was so frightful it reduced Scott Ostrander to tears.

In July 2013, Ostrander, the general manager of SeaTac’s upscale Cedarbrook Lodge, joined with other employers to implore the City Council to oppose the $15 minimum wage initiative as it headed to the voters.

Standing before SeaTac leaders, Ostrander declared that higher wages would require him to fire workers. “I’m shaking here tonight because I’m going to be forced to lay people off for something that is not their fault. Something that they have no control over. I’m going to take away their livelihood. God that hurts. That really, really hurts.”

Ostrander paused and choked up. “This initiative,” he said, tears welling up in his eyes, “will destroy this community.”

Four months later, SeaTac voters adopted Proposition 1, requiring an immediate $15/hour minimum wage for airport and hospitality workers, plus paid sick leave, job security, and other benefits.

And just three days after the last ballot was tallied, rather than fire workers, Ostrander unveiled a $16 million hotel expansion plan—sixty-three more hotel rooms and a new spa. Some 25 more workers would be needed to staff the growing facility.

It turns out that paying workers more money did not destroy SeaTac.

Today workers in and around Sea-Tac Airport are making several thousands of dollars more every year as a result of the historic 2013 ballot win. They have more job security, more opportunity to go back to school, to provide for their children, to enjoy life. And Ostrander’s overwrought city council speech stands as yet another case of crocodile tears shed by corporate executives when faced with the prospect of being ordered to treat their fellow humans with a morsel of decency.

There’s no shortage of this sort of pro-corporate propaganda trying to convince us that up is down, day is night, and paying workers more money is a bad thing.

Now we can add another specimen to this parade of weepy corporate shills, the latest study of Seattle’s minimum wage by six University of Washington researchers, who argue that workers in our community have lost money as a result of the city’s phased-in $15 minimum wage law. How is it possible?  Because, the study asserts, they are getting fewer hours of work. The study cherry-picked Seattle employers, excluding 40 percent of them, to achieve the result it sought. I’ll leave it to smarter people than me, like the researchers at the Economic Policy Institute, to thoroughly parse the defects and biases of the UW study, because I think that battling over interpreting data, while important, can be a distraction from the main issue, which is the gross distortion of wealth in our society and what we must do about it.

The UW study concludes that it may have been a bad thing to raise the Seattle minimum wage from $9.32/hour in 2014 to $13/hour today. It’s garnered extensive coverage from the mainstream press, who seem all too happy to cast doubt and confusion about the most elemental economic good we can undertake as a society: Ensure that workers are paid living wages.

What the same corporate promoters in the media fail to dig into is the explosion in wealth inequality that is ripping apart communities. Let’s look at one individual in Seattle: Amazon CEO Jeff Bezos. During the three years that Seattle fast food workers, nursing home workers, maintenance workers and others were winning annual raises of $1-$2/hour, Bezos’s wealth skyrocketed from $29 billion to more than $80 billion today.

You don’t have to be a Ph.D. economist to recognize that the wealth gain of this one individual since 2014 exceeds – by orders of magnitude – the entire income redistribution to Seattle low-wage workers that resulted from the minimum wage law.

This vast distortion of wealth produces bizarre and sickening incongruities. This spring, as Amazon began installing hundreds of exotic plants and trees in Bezos’s new crystalline spheres in downtown Seattle, King County tallied a record 12,000 people experiencing homelessness, which Crosscut.com pointed out is “equivalent of the population of the town of Woodinville.”

Money for plants, but not for people.

Strip away the data and analysis in the UW study and at its core you’ll find an ideological conviction that profit is paramount and living wages for workers are bad because they get in the way of unfettered business. So massive wealth accumulation by the richest of the ultrarich, with the resultant social costs for the rest of us, go relatively unquestioned by the media and the academy, while modest public efforts to raise workers out of abject poverty are scrutinized by corporate mouthpieces who have little if any personal experience with what it’s like to get by on a poverty paycheck.

The richest of the rich are savvy enough to know that they can’t come right out and say their profits are more important than our comfort. So they look to distract us by changing the topic, hoping we’ll get all stirred up about the UW study while they plunder away.

And when they can’t change the topic, they mask responsibility by claiming it’s not them, it’s “market forces” at play – some sort of powerful but abstract entity beyond our reach or even comprehension. I’m continually astonished by how frequently this canard is trotted out by allegedly intelligent people and accepted without challenge by opinion leaders.

Scott Ostrander maintained that he’d need to fire people if the $15 minimum wage took effect, as if he were just a helpless intermediary between an implacable market and his beloved employees.

But the market is not an abstraction. It is a particular set of people making and enforcing decisions, acting in their self-interest to accumulate wealth and maintain control. In economics and at work, nothing just happens on its own. There is always an agent.

The UW study doubles down on this market fantasy, announcing that for Seattleites, “the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent.” Really? If any minimum wage worker in Seattle saw reduced pay in the last three years, it’s because someone in management cut their hours. But corporate responsibility is magically erased from the UW study’s world, a make-believe place where managers don’t reduce work hours, paychecks do.

It’s important to call out these myths, not just because they are so transparently bogus, but because when we peel back the arguments we get to the core of the struggle: Profits, or people? Climate-controlled crystalline spheres for trees, or basic housing for humans? Soaring inequality, or universal economic security?

The hundreds of billions of personal and corporate wealth sloshing around in our economy remind us that either vision is achievable. The question is which one will prevail.

There is no abstract market, no academic study, to mediate this struggle. Rather, it’s people organizing – like airport workers overcoming Scott Ostrander and his corporate peers to win a historic wage initiative, fast food and other workers forcing Seattle’s political elites to adopt $15 – that will determine which vision ultimately wins out in our community and beyond.

The most solid conclusion that you can make from studying Seattle’s minimum wage increase is that when workers organize and fight, we can win and advance the social good. And the absurdity of the other side’s arguments, the length to which they try to prove something is the opposite of what it actually is, only underscores their recognition that we have power and justice on our side.

Jonathan Rosenblum lives in South Seattle and is a member of UAW 1981/National Writers Union. He is the author of Beyond $15: Immigrant Workers, Faith Activists, and the Revival of the Labor Movement (Beacon Press, 2017). More about him can be found at www.jonathanrosenblum.org

Featured image is a cc licensed photo attributed to Aliane Golden/ via Flickr

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