Opinion

The Great Debate

The minimum wage fight: From San Francisco to de Blasio’s New York

In his State of the Union address last month, President Barack Obama urged cities and states to bypass Congress and enact their own minimum wage increases. “You don’t have to wait for Congress,” he stated.

On Monday, New York City Mayor Bill de Blasio followed the president’s advice. De Blasio announced, in his State of the City address, that he plans to ask Albany next week to give the city the power to raise the minimum wage.

The New York mayor is not the only elected official putting Obama’s words into action. Cities across the country, from New York to Seattle, are moving aggressively to confront rising income inequality and falling real wages for low-paid workers. These cities can learn important lessons from San Francisco’s bold experiments over the last 15 years.

San Francisco has now passed nearly a dozen laws to raise low-wage workers’ pay, expand access to healthcare and extend paid sick leave to every worker. These laws include living wage policies for workers at the San Francisco International Airport, on city economic-development projects and for city contractors; an across-the-board minimum wage — now $10.74 an hour; a broad paid sick leave ordinance, and an employer healthcare requirement.

These laws have brought substantial improvements in compensation and access to healthcare for tens of thousands of low-wage workers and their families. Over the last decade, as real wages for low-paid workers stagnated and then declined nationally, San Francisco stood apart. Real wages rose for the lowest-paid workers and maintained their value because of indexing in the minimum wage law. During these 10 years, the minimum wage law alone has put an estimated $1.2 billion into workers’ pockets.

Trying to raise a family on a fast-food salary

Fast-food workers in more than 50 cities Thursday are striking for fair pay and the right to form a union — the biggest walkout to hit the industry. This latest round of labor unrest comes 50 years after hundreds of thousands of Americans, led by Martin Luther King Jr., joined the March on Washington for Jobs and Freedom, demanding not only civil rights, but also good jobs and economic equality.

One demand of the 1963 marchers was raising the federal minimum wage to $2 an hour. In today’s dollars, that’s roughly $15 an hour — what the striking fast-food workers are now calling for.

For all the progress made since 1963, the reality is that economic inequality persists and continues to grow. Income inequality is greater today in the U.S. than in any other OECD nation, except Chile, Mexico and Turkey, and exceeds that of many developing countries.

Rebuilding America’s high-wage economy

Good for President Barack Obama for emphasizing the need to restore America’s middle class. However, the actual proposals in his new summer offensive would not go very far toward that worthy goal.

America is moving, at an accelerating pace, toward an economy with tens of millions of poorly paid service jobs at one end, and a relatively small number of astronomically compensated financial jobs at the other. In between the fast food workers, who demonstrated this week for a living wage, and the hedge fund billionaires is a new creative class heavily based on the Internet. But the web entrepreneurs are too narrow a segment on which to rebuild a broad middle class.

For a quarter-century after World War Two, America was a far more equal society — with jobs that paid a “family wage” on a single paycheck. One question dividing economists now is whether the more equal, high-wage economy of the postwar era is irrevocably gone with the steel mills of Pittsburgh. Or whether a service economy can become an egalitarian one with a different set of policies.

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