Income inequality is a big, big problem. That’s the message labor leaders, a venture capitalist, and politicians alike hammered home in the opening hour of Mayor Ed Murray’s day-long Income Inequality Symposium Thursday morning. What exactly to do about that problem wasn’t so clear.
Speaking before a packed ballroom on Seattle University’s 12th and E Madison campus, Murray called for the city to work together to raise the minimum wage, but stopped short of getting into any specifics about a proposed $15 an hour wage. Murray warned that the city could not ignore the concerns of small businesses, including the many immigrant business owners throughout the city. “We are here today to find a solution so every worker in Seattle earns a living wage for their work,” he said.
Seattle venture capitalist Nick Hanauer gave perhaps the most interesting speech of the morning, railing against the idea that billionaires, like him, were the job creators in a capitalist economy. “The best thing you can do for a capitalist economy is invest in the middle class,” he said, adding that the overall purpose of capitalists was not to create jobs, but to create profits.
Speaking about the work his city has done to get the nation’s highest minimum wage, San Francisco Supervisor John Avalos said “Sea-Tac sparked a huge hope in this nation.” Labor leader David Rolf, president of SEIU Healthcare 775NW, called income inequality the greatest moral issue of our time.
The meeting came two days after two studies were released that gave new insights into the prevalence of low wage workers in Seattle and Capitol Hill. Both the symposium and studies are intended to provide guidance to the mayor’s Income Inequality Advisory Committee, which has an April deadline to provide Murray with recommendations on raising the minimum wage.
CHS will be here all day with more updates to come
UPDATES: If the symposium’s opening comments were broad, if unspecific, calls to action, then the morning’s first round of panels offered some detailed snapshots of the current state of income inequality in the city. Three rounds of researchers, academics, elected officials, and low wage workers addressed the ballroom that remained surprisingly full throughout the morning.
- One panel was tasked with discussing what an actual living wage is in Seattle.
- A living wage for a single adult in living in King County is $17.55 an hour, according to Jill Reese of the Alliance for a Just Society. For a worker supporting a household with two with a toddler of a school age child the living wage was calculated at $32.11 an hour.
- Seattle residents who work in Seattle have a poverty rate that is nearly half of the total Seattle rate 7.6% – 13.6%
- Josh Bivens, of the Economic Policy Institute, said repairing the “rotting wage floor” was crucially important to the prosperity of the country. “We have an economy that can afford this,” he said.
- Each panel took a handful of questions. When asked about how sustain a wage increase to ensure people continue to get living wages, Bivens said pegging wage increases to the consumer price index was a good idea, but not that bold. He said indexing wages to growth or productivity would be better. “This is never going to be a one and done campaign to make sure people have decent living standards.”
- Martina Phelps, a full-time McDonald’s worker, said “I will keep the fight the alive … I’m ready for more boycotts until they change our wage.”
- Jesse Inman, who works at the Downtown Emergency Service Center, said non-profit employers should not be exempt from a minimum wage increase because those workers are doing hard work and should get paid a living wage.
- The third panel featured the University of Washington research team that completed the Murray commissioned study on the minimum wage.
- UW researchers Marieka Klawitter said about 40 percent of workers in seattle come from outside the city.
- The baseline poverty rate of Seattle residents is 13.6%. With a hypothetical $12.12 an hour minimum wage, that would go down to 10.6%. With a $15 and hour minimum wage:, it would be reduced to 9.4%.
- Minimum wage workers work work a median 1,000 hours a year, which is part time.
- “There are some employment losses, but they’re not great,” said UW researcher Bob Plotnick. “We don’t really know much about what will happen with an increase of this magnitude.”
On the afternoon panel, UC Berkeley researchers Ken Jacobs and Michael Reich presented some of their findings from minimum wage increases around the country. They gave some very relevant economics lessons, assuring attendees that economy hasn’t crashed in local areas that have struck out on their own and raised the minimum wage.
- 9 cities have enacted local minimum wage laws. In San Francisco, the law did work, and wages did rise, Jacobs said.
- Employment grew about the same rate of surrouding counties after minimum wage law.
- There’s no evidence that minimum wage laws have had an effect on growth in the restaurant industry, Jacobs said.
- “Raising the cost of labor will not reduce the demand,” Reich said.
- The elasticity in restaurants is small, a small change in restaurants will not change people’s behaivor.
- The pair said there is no good data on how a minimum wage increase effects profits.
- On employment, there is small negative effect on teens when minimum wage increases occur.
- Looking at counties that border each other, one with local or state minimum wage laws and others without, the researchers found there was no effect on employment.
- Restaruants: 30% of costs are labor
- A 25% increase in SF min wage led to a 2.8% increase in restaurant prices. Price increases of these are easily absorbable.
- Local minimum wage laws “benefit low income families, with now discernible effect on employment.”
During the afternoon breakout session, Kshama Sawant joined the fray on a panel examining how cities are working to raise the minimum wage. Props to moderator Eric Liu for being the best moderator of the day and constructively framing the discussion.
- Washington D.C. has failed to meet the needs of citizens, Liu said, and cities are increasingly becoming the place where real policy decisions are made.
- Paul Sonn, National Employment Law Project, said there’s almost universal anxiety and opposition in the business community when localities propose raising the minimum wage.
- Kshama Sawant said if you listened to the economists from earlier in the day, its hard to argue that raising the minimum wage would be harmful. “Ultimately, this is a political battle,” Sawant said.
- Sawant on talking to small business: “We agree on many things. The capitalist system really rewards the biggest players, the multinational corporations.”
- “If you look at who has suffered the most … it’s been the small businesses,” Sawant said.
- The lowest paid workforce needs spending money, she said, and that helps small businesses. “They’re going to spend it at your business, because they can’t afford to go on vacation to Paris to spend it.”
- One audience member claimed Sawant paid campaign workers $10 an hour. She said it was a reporting error. They do get $15 an hour.
- Don Rocha, San Jose city council member, said his city had $100 million in new wages going back into local economy after raising the minimum wage to just over $10.
- Since then, 9,000 new businesses have started in San Jose. “The sky did not fall,” Rocha said. The wage increase passed 60-40 in San Jose.
- Chicago Alder Roderick Sawyer, talked about 87% of residents voting in favor of raising the minimum wage to $15 an hour. He echoed Sawant’s comments about needing to build a movement.
- Ritchie Torres, New York City council member, said his city has become a city of “extreme inequality.” The median income in his Bronx district is $20,000, which is half the city-wide average.
- Torres held his first council meeting in a housing project, bringing people into the political process who had never been involved and thus bolstering the movement for progressive causes.
- David Alvarez, a San Diego city council member, said the “new generation conservatives” in San Diego have gutted city employee pensions and benefits. However, the city is considering a minimum wage increase.
- John Arena, Chicago Alder, said big business run the city and the “party Democrats” aren’t much of a push back. He said middle class people see themselves squeezed from the top and the bottom. “They’re becoming protectionist.”