December 1, 2006 Volume 107 Number 23

Think again

Minimum wage: Common sense trumps conservative ideology


Last month’s election did more than send a lot of new Democrats to Congress and state legislatures. It also delivered a resounding affirmation of a values-based economic justice agenda.

This year’s “values voters” affirmed the principle that people who work full time shouldn’t have to live in poverty. In six states, these voters approved ballot initiatives to raise the minimum wage. In other states, legislatures raised the minimum wage to keep such initiatives off the ballot.

By next month, when most of these new laws and initiatives deliver their first pay increases, states representing a majority of the nation’s workers will have higher wage floors than the federal minimum wage. Stuck at $5.15 per hour for the past 10 years, the federal minimum has become a poverty wage for more than 10 million adult workers with seven million children — and an affront to Americans who think “working” should mean no less than “working for a living.”

As this election proved, when you ask voters whether they are willing to allow poverty wages in their states, you get a resounding ‘No.’

But that’s not why I think we may be at a tipping point for a progressive agenda that values work and demands fairness for working families. The more important development is this: States with higher minimum wages are proving that minimum wage increases deliver what their proponents promise — higher incomes, and not what their opponents predict — fewer jobs.

This victory of common sense over conservative economics was fought and won during the past 10 years at the intersection of reality and ideology, where people’s lives are directly affected by the contest of political ideas. And, this is a contest that progressives have won.

Before I take this point further, I want to call out the pioneers of this successful movement, which started in the Northwest. Activists in Washington were the first in the country to use the initiative process to raise the minimum wage in 1988. Their counterparts in Oregon and California followed suit in 1996.

Since then, initiatives to raise the minimum wage appeared on the ballot in 10 states, including a second round of increases in Washington in 1998 and Oregon in 2002 that added annual cost-of-living adjustments to their wage floors. All 10 of these minimum wage initiatives were approved by the voters; not a single one failed — despite some high-spending opposition campaigns that featured a message from the Almighty urging a ‘No’ vote in TV ads run in Colorado this year.

Most importantly, these campaigns helped to prove that wage laws forged in the crucible of the New Deal are still relevant to a global economy 70 years later.

States that raised their minimum wages above the federal level and communities that adopted living wage ordinances in recent years provided real-world laboratories to test the conventional thinking dominant in right-wing think tanks, preached by university economics departments and used like a cudgel by business lobbies — namely, that minimum wage increases hurt more workers than they help.

The results of these tests have been summarized in a new paper by Liana Fox, entitled “Minimum Wage Trends: Understanding Past and Contemporary Research,” published by the Economic Policy Institute ( And they were convincing enough to change minds, at least in academia.

Alan Blinder, the former vice-chairman of the Federal Reserve, wrote this year: “My thinking on this has changed dramatically. The evidence appears to be against the simple-minded theory that a modest increase in the minimum wage causes substantial job losses.” Blinder even rewrote his economics textbook to debunk that “simple-minded theory.”

As Fox concludes in her overview of the new studies, “The positive effects of the minimum wage are difficult to dispute. The minimum wage sets a floor for the value of work and lifts the living standards of low-wage workers.”

So what should progressives do now?

If studies like these had validated the positive effects of school vouchers or consumer-driven health plans, you can bet that conservatives would wave their findings like battle flags. Progressives should do the same with a living wage agenda.

In Oregon, the Legislature should repeal the prohibition on local living wage laws, which was passed in 2000 at the behest of the Oregon Restaurant Association, and let communities decide if they wish to establish higher wage floors.

In Congress, Democrats should move quickly to raise the federal minimum wage to an amount that takes it above the poverty level and boost the shameful “tip credit” wage of $2.13 per hour as well.

Progressives should learn from their success in states like Ohio, Montana and Arizona that the minimum wage can serve as the cutting edge of a new values-based economic agenda to unite blue states and red.

After all, the minimum wage has something going for it that the conservative agenda doesn’t. It works.

Tim Nesbitt is former president of the Oregon AFL-CIO.