The Never-ending
$tory by Tina Manzer
The bid to raise the federal minimum wage this year failed, but that doesn’t mean we won’t debate it again. And again. The minimum-wage controversy is now nearly a century old. Ever since the first law was passed during the Great Depression, industries including retail have pushed back on increases as scores of minimum-wage laws were passed at federal, state, and city levels. Along the way, decades’ worth of statistics were generated. You would think that, by now, we could accurately predict the ways an increase affects job loss, productivity, pricing, business closures, and the poverty level, but I think it depends on what economist you talk to. The discussion always reveals a wide range of perspectives. Some two-thirds of Americans would support the proposed increase, according to an oftquoted Pew Research survey from 2019. And some businesses do support some kind of increase, although not necessarily the jump from $7.25 to the proposed $15. And really – there’s nothing magic about the $15 figure, other than it more than doubles the current rate. “But beyond sheer numerical and symbolic weight, researchers have found a $15 minimum could have broad social impact,” writes Ben Uglesbee, senior reporter at Retail Dive. The nonpartisan Congressional Budget Office (CBO), for instance, estimates that a $15 minimum would lift nearly 1 million people out of poverty.” That’s the same CBO that also predicts the increase would cut about 1.4 million jobs. But economists and alumni of UC Berkeley, an 12 May 2021 — edplay.com
institution that has emerged as a center of minimumwage research over the past 20 years, describe a range of benefits that a higher minimum wage would bring, including a more robust economy and increased economic development in low-wage areas. Employers would benefit, too, with increased labor from workers, cost savings from reduced turnover, productivity gains, and even an increased demand for goods and services from low-wage workers who have received the raise. Big retailers including Target, Costco and Amazon have already moved to raise their starting wages to $15, according to Retail Dive. Target’s increase occurred last year, and this year, COO John Mulligan told analysts that the larger wage, along with more hours, has led to a drop in turnover and increased customer satisfaction. Also this year, Costco raised its minimum hourly rate to $16. Its employees are already among the best paid in the front line of retail, and their higher wages bring a number of benefits to the business. “We know that paying employees good wages and providing affordable benefits constitutes a significant competitive advantage for us,” CEO Craig Jelinek told Retail Dive. Specifically, he pointed to minimal turnover coupled with high levels of productivity, commitment and loyalty among employees. Big retailers can offset the cost of higher wages with increased efficiencies to scale. Mom and pop toy stores cannot.
Not necessarily a consensus
The National Federation of Independent Business (NFIB) opposed the most recent efforts to raise the wage. “One-size-fits-all mandates are always bad for
