The Fight for $15: The Right Wage for a Working America

David RolfDavid Rolf — president of Service Employees International Union (SEIU) Local 775 in Seattle — has been a leading figure in the national fight for a $15 minimum wage. When fast food strikes erupted nationwide in 2012 and 2013 behind the slogan “$15 and a union,”  it was thanks to behind-the-scenes work and resources from SEIU. The strikes were especially successful in Seattle, where the union and many allies went on to pass a $15 ballot measure for airport workers in SeaTac in 2013. After it became a campaign issue in Seattle as well and pro-$15 mayor Ed Murray won office, Rolf was appointed co-chair of the task force that wrote the $15 minimum wage ordinance, which passed in 2014. Now he’s written a book about the movement: The Fight for Fifteen: The Right Wage for a Working America. The Labor Press interviewed him by phone.

Where did $15 come from, and why are we hearing about $15, and not $10.10 an hour, or $20 for that matter? The real answer is: It’s a bold moral aspirational goal, along the lines of the eight-hour day. One can talk about the relative economic justifications of $15. If you look at the high point of the spending power of a minimum-wage earner — 1968 — and you accelerated the minimum wage according to the increase in productivity since then, it would be $21 an hour. If you accelerated it according to inflation, it would be between $10.50 and $11 an hour. So $15 is a relative midpoint. But this was not cooked up in a science lab. This was workers on the ground, first in Brooklyn in November 2012,  deciding that $15 was worth going on strike over. That wasn’t any more scientific than why we have an eight-hour day instead of an 8.25- or 7.79-hour day. It was a firm round number that workers felt motivated and inspired by.

First SeaTac then Seattle going to a $15-an-hour minimum wage got a lot of national attention. A lot of observers who aren’t in Seattle may think that the wage is already $15 there now. Can you tell us about the compromise and the reality? It’s quite complex. And this is how we got consensus with a majority of the business community and a unanimous vote on city Council. There are essentially four different rates of acceleration to $15. For big businesses who don’t provide healthcare to their employees, it’s a three-year path – $11, $13, and $15. This is the $13 year; next January it will be $15. Think McDonald’s or Target, Amazon, Rite Aid … big companies with 500 or more employees nationally that don’t provide healthcare for employees. For those that do provide health care benefits — say Nordstrom, Macy’s, Safeway or QFC groceries — they have an extra year, so it’s a four-year phase-in. For small employers (under 500 employees nationally) who don’t provide healthcare, it’s a five-year phase-in. And for small employers whose employees do receive healthcare or tips that add up to the minimum wage of $15, there is a “phase-in, phase-out” tip and health care credit. But everyone has to be at a clean $15 seven years from the original passage, which is the year 2021. There’s a lot of complexity. It’s really the product of the mayor and the negotiators — myself and Howard Wright on the business side — feeling like we had to have not just a majority vote on the task force but a strong majority if we were not going to be subject to potential efforts to amend or repeal via ballot measure.

What has been the impact, so far, of the incremental raises? Workers have more money.

When Washington increased their wages and Idaho didn’t, guess what happened? Businesses didn’t go to Idaho. Workers came to Washington.

Has Seattle become a ghost town with business closures? San Francisco and Seattle, which are the two highest-wage cities in the country, have the largest number of restaurants per capita in the United States, higher than New York, higher than Washington, D.C. We have seen overall growth in the number of restaurants operating in Seattle. We have about 3 percent unemployment. There’s a waiting list to rent a construction crane in Seattle. Our biggest problem is that more people want to live here than there are housing units. So there are really fast rates of housing price inflation.

I think that gets to my next question which is: How do you answer the argument that if you try to raise the minimum-wage significantly, it will cost jobs and actually hurt the people it’s trying to help? It’s a lie. It’s never happened. Not once. Anywhere. We took seriously every potential critique. Is it going to increase youth or minority unemployment, or unemployment for people with low skills and less than a high school education? Is it going to disadvantage minority businesses? Is it going to cause businesses of any sort to go out of business? Is it going to make people relocate their business to a lower-wage jurisdiction across a municipal border? And we looked at every credible study we could find — not projections, not neoclassical economic modeling, but actual studies based on actual data where it had already happened. So when Santa Fe raised their minimum wage over 60 percent above the surrounding counties, they actually experienced a growth in employment. When San Francisco raised theirs above the surrounding California counties, they experienced greater growth in employment during periods of economic growth and they lost jobs more slowly during recessions. We looked at border towns like Spokane, Washington, and Coeur d’Alene, Idaho: What happened when Washington increased their wages and Idaho didn’t? Guess what happened? Businesses didn’t go to Idaho. Workers came to Washington. To apply for jobs. We looked at the classic study from the early ‘90s between Trenton and Philadelphia, when New Jersey’s wage went up and Pennsylvania’s stayed the same. And then we looked at every federal minimum wage increase since 1937 when we first passed a federal minimum-wage. In 82 percent of the cases, a minimum wage increase correlated with growth in employment. In 18 percent of the cases, it correlated with no meaningful change in employment. And in 0 percent of the cases did it correlate with the loss of employment. Zero. So this is a lie perpetrated by the organized right — because they are ideologically opposed to government interfering in the private sector, and because they simply are greedy and they want more money for themselves.

I assume you’re familiar with what just happened in Oregon. What do you think of Oregon’s three-tiered raise that was just passed by the legislature? Listen, every jurisdiction has kind of got to figure this out for itself.  I am for the most progressive policy that you can count votes for in any jurisdiction around the country. Do I think that $12.50 for 10 percent of Oregon workers is good policy? Not really. But in practice, by the time it gets phased in, no one’s really going to be at $12.50. Because those 10 percent of workers are going to have labor market options outside of that geography. So employers in whatever counties of the state have the $12.50 rate are going to end up having to pay $13.50 just to compete for workers, if they don’t want them to drive into the next county and find a job for a dollar an hour more. So it was a question of what was politically possible in the legislature. And I have to respect that, because you have to count the votes. But I think in reality, by the time it’s all phased in, no one is going to be earning less than $13.50 in Oregon.

How do you think other cities and states can pull off what happened in Seattle? It’s just about organizing. It’s harder in some places because of state laws that preempt local decisions, like you had in Oregon. But it didn’t make it impossible in Oregon; it just meant that it was a state fight and not a city fight. This is not that hard. It’s about workers going on strike, marching, demonstrating, showing up at City Hall, electing the right people. It’s hard in that some of those things are hard to pull off, but it’s not hard to understand. Americans want higher wages. It’s actually only controversial along elites. Rank-and-file Republicans think there ought to be higher wages. Independents, Democrats, black, white, brown, born in America, immigrants, refugees … you cannot find a demographic except for rich white men that is opposed to a higher minimum-wage, and even they are relatively split on the matter.

Do you see a larger lesson for unions about winning through political means what collective-bargaining no longer seems to be able to deliver? America’s enterprise-based collective-bargaining system was a weak model to begin with. Think about what enterprise-based bargaining entails. It’s one union bargaining with one company. So companies are highly incentivized to remain nonunion, or to bust the unions if they’ve got them, or to minimize their bargaining demands because of the perception that they will be put at a competitive disadvantage on price or flexibility with their competition. And trade associations are incentivized to prevent the expansion of or reform of labor laws. What does it mean to have a right that’s optional? I don’t have to vote to establish the right of free speech. My neighbors and I don’t have to come together all at once and agree that we want the right to petition the government for the redress of grievances. I don’t have to campaign to be allowed to own a rifle. Those are rights that are guaranteed. But collective bargaining is a right that you have to opt into by a majority vote on a workplace by workplace basis. So only a minority of workers will ever benefit from it, which means by definition it will never have the political support for its own expansion. Labor law reform has failed continually for five decades. We need a better model, and one such model is something that looks like regional or sectoral bargaining mediated through state or local political institutions. That’s essentially what we did in Seattle.

Minimum wage campaigners celebrate as Seattle Mayor Ed Murray signs an ordinance creating a $15-an-hour city minimum wage. “The economic policy of the 34 years has failed,” Murray declared in a prepared statement. “It has decimated the middle class, and it has created the largest income inequality gap in our history. Seattle is trying something else…. It’s a step we recommend to other cities around the country.”
Minimum wage campaigners celebrate the signing of Seattle’s $15 minimum wage ordinance (including David Rolf, to the right of  Seattle Mayor Ed Murray, who’s seated in the center).

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