Currently viewing the tag: "Initiative 688"

The Republican War on the Poor is evident in their continued opposition to raising the national minimum wage.  Like on many other issues they are out of tune with the American people.  Fully three quarters of the American people support raising the national minimum wage from $7.25 an hour to $9.00 according to a Gallup poll released this week.  Almost as many support indexing it to inflation so the issue does not have to be raised every few years in Congress and held hostage to Republican obstructionism.

As Gallup notes:

Despite President Barack Obama’s State of the Union call to raise the wage to $9 — and widespread rallies populated mainly by hourly fast-food workers — legislation that would accomplish this goal has thus far languished. More recently, the Obama administration has voiced support for the Harkin-Miller bill, which would raise the minimum wage even higher — to $10.10.

Republicans in Congress have continued to support tax breaks for the wealthy and oppose raising taxes in general which has benefited the wealthy the most. At the same they are resolutely opposed to helping people on the bottom of the economic ladder. Republicans in the US House in March voted unanimously against raising the minimum wage to $10.10.

As the Huffington Post reported in March:

A proposal by Rep. George Miller (D-Calif.) to raise the federal minimum wage to $10.10 an hour over the next two years and increase the wage for tipped employees to 70 percent of the minimum wage was defeated, with every House Republican voting against the motion. On the Democratic side, six lawmakers voted against the measure, and 184 Democrats voted for it.

Washington State’s minimum wage is currently the highest in the country at $9.19.  It is indexed to inflation and will increase to $9.32 next year.  It covers both retail workers and agricultural workers.  It has an exception for 14 and 15 year olds who can be paid at 85% of the minimum or $7.81 per hour.

Washington voters twice passed initiatives to raise the minimum wage in recent years.  The last time in 1998 they added a provision to index the minimum wage to inflation. That Initiative, Initiative 688, passed with a 66% yes vote.

Voters in SeaTac, Washington on the Nov 2013 ballot are passing a proposal to raise the city’s minimum wage to $15/hour. As of Nov 14 the measure is ahead by 52 votes. And it looks like if it wins, next up will be a court battle.

On Jan. 1, 2013 Washington State’s minimum wage increased by 15 cents to $9.19 per hour.  Washington State’s minimum wage is the highest in the country. Nine other states minimum wages were also increased on Jan 1, 2013.  As noted in the Huffington Post:

Nearly a million low-wage workers will see their earnings rise because of the increases, most of which come courtesy of state cost-of-living adjustments that account for inflation. Washington State will once again have the highest minimum wage in the nation, at $9.19 per hour, after a raise of 15 cents for the new year. The other states raising their wage floors are Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Rhode Island and Vermont.

The federal minimum wage remains $7.25 per hour, with no cost-of-living adjustment, and prevails in 31 states that do not mandate a higher state minimum wage. The last raise to the federal minimum came in 2009, after a series of increases signed into law by President George W. Bush.    

The increase in the state minimum wages are as follows:

Washington State – increased 15 cents to $9.19/hr

Arizona – increased 15 cents to $7.80/hr

Colorado – increased 14 cents to $7.78/hr

Florida – increased 2 cents to $7.69/hr

Missouri – increased 10 cents to $7.35/hr

Montana – increased 15 cents to $7.80/hr

Ohio – increased 15 cents to $7.85/hr

Oregon – increased 15 cents to $8.95/hr

Rhode Island – increased 30 cents to $7.75/hr

Vermont – increased 14 cents to $8.60/hr

Except for Rhode Island’s minimum wage increase approved by their Legislature last year, the rest of the increases were the result of   state laws indexed to inflation and the consumer price index. Nevada, which also adjusts their minimum wage based on inflation, makes their changes on July 1st and is not included in the current list above.

Washington state was the first state to index their minimum wage to inflation when they passed Initiative 688 in 1998. Oregon followed with an initiative in 2002 and  Florida in 2004. In 2006 there was a big push nationally to index the minimum wage to inflation, with voters in Arizona, Colorado, Missouri, Montana and Ohio passing minimum wage initiatives.

The US Department of Labor  has a color coded map which breaks out state’s minimum wages by categories. Amazingly five states – Louisiana, Mississippi, Alabama, Tennessee, and South Carolina – have no state minimum wage laws.  Four states – Georgia, Arkansas, Wisconsin and Wyoming – have a state minimum wage lower than the federal minimum wage of $7.25.  Twenty states have a minimum wage higher than the federal minimum wage of $7.25 and the rest of the states set their minimum wage at the Federal level.

Legislation has been before Congress to try to index the federal minimum wage to inflation, the same as Washington State does, but Republicans in Congress have prevented action on moving the legislation. Congress has a dismal record on dealing with increasing the Federal minimum wage.  As the Labor Law Center   notes,  Congress increased the minimum wage to $5.15 in 1997.  It took another 10 years to increase it to $5.85 in June of 2007, then $6.55 in June of 2008 and $7.25 in June of 2009. It has not increased since then.

As noted in the Huffington Post article:

Last year, Democrats in the Senate and the House of Representatives introduced legislation known as the Fair Minimum Wage Act, which would have raised the federal minimum wage to $9.80 per hour after three years and indexed it to inflation. Those bills failed and are expected to be reintroduced in the coming Congress, although the Republican-controlled House is unlikely to pass an increase to the minimum wage.

President Barack Obama, while campaigning in 2008, pledged to hike the minimum wage to $9.50 an hour and index it by the end of 2011, “to make sure that full-time workers can earn a living wage,” as he said on his transition website. Obama ultimately failed on that pledge and hasn’t been vocal on the issue since his initial campaign. As EPI has noted, if the federal minimum wage had kept pace with inflation since its high in the late 1960′s, it would now be above $10 per hour.

Further action can be taken on the state level via both legislative efforts and initiative efforts.  For example, as Minnesota Public Radio reports,   the new legislative majority in Minnesota has prioritized raising their minimum wage and indexing it to inflation.

State Sen. Chris Eaton, DFL-Brooklyn Center, is sponsoring legislation to increase the minimum wage for large employers by $1.35 an hour to $7.50 an hour, and provide for automatic inflationary increases in the future. “Putting more money in the pockets of minimum wage earners is good for the whole economy,” Eaton said. “The money is going to be spent in local businesses, on job training courses and covering rent.”

The Initiative and Referendum Center lists 24 state’s that have the initiative process.  While it is more difficult in some states than others to get on the ballot, there are 15 additional states that could pass state minimum wage initiatives that are indexed to inflation. They are Alaska, Arkansas, California, Idaho, Illinois, Maine, Massachusetts, Michigan, Nebraska, New Mexico, North Dakota, Oklahoma, South Dakota, Utah and Wyoming. A couple of big states like California, Illinois, Massachusetts, and Michigan passing new state minimum wage initiatives indexed to inflation would give a big boost to efforts to enact such legislation in Congress.

Minimum wage legislation indexed to inflation is a progressive issue and could certainly boost turnout of Democratic voters in key states and help elect a more Democratic Congress keyed to helping average citizens rather than boosting corporate profits and concentration of wealth in the hands of a few.  This is something to keep in mind regarding the 2014 and 2016 elections where members of the House and Senate are running.

Also as Henry Ford knew when he paid his workers higher wages than other industries, he was providing them with income to buy his cars. People working at or near minimum wages are barely getting by and are not going to put their money in a savings account.  They are going to spend it which keeps the money in circulation stimulating the economy. This helps everyone.

On January 1st, 2009 the Washington State Minimum Wage will increase by 48 cents. The new minimum wage will be $8.55. The current minimum wage is $8.07.

Washington State’s new minimum wage will still be the highest in the country. Oregon’s minimum wage will go to $8.40 on Jan 1, 2009. California, Connecticut and Massachusetts’s minimum wage will all be $8.00 in 2009. Montana’s 2009 minimum wage will be $6.90 and Idaho will be at $6.55.

Washington’s minimum wage is adjusted each year to make a cost of living adjustment based on the Federal Consumer Price Index for Urban Wage Earners and Clerical Workers. (CPI-W). This is done every September by the Washington State Department of Labor and Industries.

As we noted in a previous post on this year’s minimum wage,

The wage adjustment takes place each year because in 1998 Washington voters passed Initiative 688. with a 66% yes vote. The initiative is fairly brief but it was the first in the nation to require that the minimum wage be increased each year to reflect any increase in inflation.

The current Federal minimum wage is $6.55 and will go to $7.25 on July 24, 2009. For 10 years the national minimum wage was stuck at $5.15. Increasing the minimum wage was the first thing Democrats did when they took control of both houses of Congress in 2007.

Unfortunately while more and more states are indexing their state minimum wages to inflation like Washington State did, the national minimum wage bill passed by Congress in 2007 did not index it to inflation. This is a task next year’s Congress and President Obama must remedy by passing new legislation to index the Federal Minimum Wage to inflation.

As the Economic Policy Institute in 2005 noted:

Without an automatic inflation adjustment, states are forced to go through a
political process each year to guarantee workers’ living standards from year to
year. Indexing for inflation provides a sustainable solution to the problem of
declining real wages for the lowest-paid workers and should be enacted at both
the state and federal level.

Congress is forced to go through a political process each time it wants to raise the Federal minimum wage. Now that the Democrats control Congress and the White House it is time to update the Federal Minimum Wage Law by indexing it to inflation and adjusting it annually.

This is done for Social Security and eliminates increases being tied to politics. In 2007 to get support from Bush and conservatives in Congress the minimum wage increase was accompanied by some $4.8 billion in tax breaks for business. Yet studies have consistently shown that minimum wage laws do not negatively impact businesses in any serious way.

On January 1, 2008 Washington State’s minimum wage will increase 14 cents to $8.07/hour. We will still be the highest in the nation.

California’s minimum wage will increase 50 cents to $8.00/hour. California will share second place with Massachusetts whose minimum wage is also rising to $8.00/hour.

Oregon comes in fourth – their minimum wage will go from $7.80 to $7.95 on Jan 1, 2008. Oregon’s minimum wage law was passed by voters as Measure 25 in 2002.

Earlier this year the Oregon Center for Public Policy released a study entitled “Job Growth Not Dampened by Minimum Wage Increases.” They noted that “… minimum wage cost-of-living adjustments have not led to the dire consequences predicted by the farm and restaurant industries that opposed pegging the minimum wage to inflation. “

Montana voters in 2006 also passed a minimum wage initiative like Washington’s that included the yearly increase based on the Consumer Price Index. Montana’s minimum wage will go up 10 cents to $6.25/hour in 2008.

Washington State’s minimum wage is adjusted each year based on increases in the Federal Consumer Price Index for Urban Wage Earners and Clerical Workers. The State Department of Labor and Industries adjusts the wage level based on a one year period ending August 31st . The adjusted wage goes into effect the following January 1st.

The wage adjustment takes place each year because in 1998 Washington voters passed Initiative 688. with a 66% yes vote. The initiative is fairly brief but it was the first in the nation to require that the minimum wage be increased each year to reflect any increase in inflation.

The initiative was a case study in how the initiative process can be used by progressives to both win policy issues with lasting impact and to aid progressive candidates. In an analysis of the campaign done after the election by the Economic Opportunity Institute they noted that:

“The minimum wage issue helped to define the policy debate of the 1998 elections. It did so by adding a progressive, populist, broadbased, and majoritarian issue about economic security to the ballot.
The minimum wage initiative contest drew the most votes (total votes: 1,904,205: yes-1,259,456, no-644,749) of all the ballot issues and candidate contests in the election, including the U.S. Senate race. The pro-initiative vote was the highest vote-getter for all candidates and issues, outdistancing Senator Murray’s vote by 156,000 votes and the next highest vote for a statewide initiative by 137,000 votes.
The initiative created a draw for voters. Polling indicated that turnout may have increased by as much as four percentage points, thanks to the minimum wage initiative. That is, when people found out that the minimum wage initiative was on the ballot, the turnout of voters increased by 4%. This was even more pronounced among voters with poor voting histories, who accounted for 52% of the drop-off voters who were moved by this issue.
The Seattle Post-Intelligencer noted in its lead editorial on November 5: “Murray’s better-than-expected showing may have been boosted by the presence on the ballot of Initiative 688, which raised the state’s minimum wage and made Washington the first state to link future minimum wage increases to inflation. That initiative doubtless produced an extra measure of voters who line up in Murray’s camp….The initiative passed with a higher approval rating, 67%, than any other statewide issue.”
The Democrats unexpectedly won 50% of the contests for the state House of Representatives, picking up 8 seats, moving from a 57-41 minority to a 49-49 tie, while the State Senate switched from a 26-23 Republican majority to a 27-22 Democratic majority. Of the contested seats, 4 seats were won with less than 2 percentage points separating the Democrat from the Republican, 1 seat was won with a margin under 3 percentage points, and 1 seat was won with a margin of less than 5 percentage points. We attribute these victory margins to the draw of the minimum wage initiative. “

Previously Washington State’s minimum wage was held hostage by business interests and state legislators that refused to act to raise the minimum wage to reflect inflation. Without this yearly adjustment workers saw the minimum lose purchasing power each year the Washington State Legislature didn’t act.

A 2004 study by Marilyn Watkins of the Economic Opportunity Institute noted that even with the passage of I-688 Washington new minimum wage had not kept pace with inflation when one considered that in 1968 Washington’s minimum wage was $1.80/hour. In 2004 when Washington State’s minimum wage was $7.16 she calculated that if it had kept pace with inflation since 1968 it should have been $8.40.

Based on the inflation increase between 2004 and 2008 I calculated that Washington State’s 2008 minimum wage would have to be $9.47 instead of $8.07 if we had kept pace with the minimum wage in 1968.

Unfortunately the recently passed Federal increase in the minimum wage, after 10 years with no increase, did not include the annual adjustment requirement based on inflation that Washington State initiated. Including an inflation increase adjustment each year must be a priority in the next minimum wage increase Congress enacts.

It is ridiculous to have to repeatedly fight the same battle year after year in Congress just to have the minimum wage keep pace with inflation. Minimum wage workers deserve better that getting a raise every 10 years which is how long Republicans prevented the last increase from occurring.

At least the takeover by Congress by the Democrats allowed the increase this year. Despite those that say Congress isn’t doing anything, they are doing something. If the Republicans were still in control there would not have been any increase in the Federal minimum wage this year. But you probably would have seen more tax loopholes and tax breaks for the very wealthy.

There is a basic difference between the Democrats and the Republicans and the minimum wage struggles in Congress demonstrate it. Democrats support helping those that need help on the lower income levels. Republicans support helping the millionaires by giving tax breaks that mostly benefit the very wealthy. Such efforts have lead to the increasing income disparity between the rich and the poor that divides America more and more.

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