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A $12 Minimum Wage: Transforming Policy Idea Into Political Reality
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As most readers have no doubt already heard, early last week I filed the text of an initiative that would raise California’s minimum wage to $12.00 per hour, a figure far higher than that of any state or city in America. The heavy resulting coverage in The New York Times and numerous other major media outlets demonstrates the timeliness and public resonance of the issue, which taken to a national level should boost the incomes of America’s lower-wage workers by well over $150 billion each year, a very sizeable amount.

The idea was hardly a new one to me, given that I’d first proposed it in a 12,000 word cover story published during late summer 2011 and subsequently advocated it in a long series of articles and columns, notably including a major 2012 paper published by The New America Foundation. In February of this year, I’d spoken about the idea at an Aspen Institute panel in DC, and more recently it had repeatedly come up during a televised late October Intelligence Squared debate in NYC while I’d made a presentation advocating a $12 minimum wage two weeks afterward at a DC economics conference organized by Economists for Peace and Security.

But who’d paid attention to all my writings and speeches over the last couple of years? Almost nobody.

Well, that’s not entirely correct. Quite a number of prominent policy experts, opinion journalists, and political activists had been intrigued by my unorthodox arguments, leading to those aforementioned speaking engagements. Economist James Galbraith and the late Alex Cockburn had extensively discussed my lengthy original article, as had blogger Steve Sailer, and National Review’s Reihan Salam actually published a five-part series analyzing my views. A few months ago, progressive activist T.A. Frank writing in the New Republic had explicitly endorsed the immigration aspects of my proposed $12 per hour minimum wage hike, and—much more remarkably—so had Andrew Stuttaford of National Review. Two weeks ago a Michael Tomasky column in The Daily Beast had explored my counter-intuitive argument that a larger minimum wage hike would actually have much greater political viability than the $9.00 figure advocated by President Obama.

However, all these discussions were restricted to the tiny gilded ghetto of opinion journalism and policy presentations, never reaching the news headlines providing most normal Americans with their knowledge of the world between their devouring focus on the latest antics of the Kardashians and Miley Cyrus. Frankly, I doubt if more than one American in ten thousand had ever encountered my proposal of a $12 minimum wage.

Then, just over a week ago I printed out a one-page sheet of paper with a single operative sentence and took a pleasant Amtrak train ride to the Sacramento office of the California Attorney General, dropping it off there together with my $200 filing fee. And in the twenty-four hours surrounding that insignificant event, the political landscape of America suddenly changed, or at least the media reporting of it did.

Given the potential national importance of the issue and the man-bites-dog aspect of my conservative sponsorship of what was purportedly a liberal cause, I had hoped that The New York Times, our national newspaper of record, might be willing to cover the launch of my campaign. But I’d never dreamed my filing of the measure would receive the coverage that it did, with the NYT sending around a photographer and giving the story fully half the square inches on its National News page. Late Monday evening, my shocked friends began emailing me about what they’d suddenly noticed on the NYT homepage and one of them sent me the astonishing screenshot he’d taken. Coverage from numerous print, radio, and cable news outlets followed on Tuesday, notably including a sizable ABC News story and a long interview on the NPR-affiliated California Report. All this had been produced by a one-page piece of paper with a single operative sentence plus a $200 filing fee.

Policy proposals in our country are endless in number and tremendously variable in quality. Elected officials and activists give speeches every day of the week promising this and that and the Moon and almost never delivering anything at all. This continual buzz of broken and impossible promises constitutes the background noise of the American political system and is therefore routinely ignored by almost everyone, certainly including the media. But when someone proposes a $15 billion annual hike in the incomes of the lower-wage workers in America’s largest state and people realize—Gee, it might actually happen!— that’s another situation entirely. One sentence, one piece of paper, and a $200 filing fee has generated at least a hundred times the total attention that I had previously received for the 30,000 words I’d published on this same subject over the last couple of years.

 

Strangely enough, I only very recently considered this obvious idea. I had spent the last decade almost totally out of the political arena, mostly involved in software projects, but prior to that I’d organized and run a long series of very high profile initiative campaigns, both in California and around the country, most of which won in huge landslides. Indeed, in 1999 my initiative success led the New Republic to put me on their cover with the headline “This Man Controls California,” a prideful high point that was naturally enough soon followed by the overwhelming defeat of Prop. 25, my Campaign Finance Reform initiative.

During those years I had quickly discovered that one of the most valuable aspects of a major initiative campaign was its role as a focal point for massive public discussion of a crucial issue. For example, my “English” campaigns of the late 1990s/early 2000s generated over 100 articles in The New York Times and over 500 front-page stories in other newspapers, probably producing many times more media scrutiny of the contentious bilingual education issue than had occurred across all of America during the previous thirty years combined.

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And yet for the last couple of years I had never considered any of this. My focus had been entirely on the sound policy reasons for raising the federal minimum wage to $12, but I had freely admitted to my friends that the likelihood of anything ever actually happening in our dysfunctional and log-jammed political system was roughly nil. I crafted all sorts of effective arguments, suggested innovative ideological strategies, and gathered important demographic research data. I published all this material in a long series of pieces, which perhaps a few dozen people here and there read and appreciated, and naturally nothing came of it. Never once during this period did I consider doing an initiative on the subject.

The ironies represented by these years of total blindness almost stagger the imagination. In my original 2011 article I had explicitly cited the example of Hilda Solis’s 1996 California Minimum Wage initiative—which won in a huge landslide—as proof of just how popular such an issue would be politically. Late last year, I similarly told all my East Coast friends about the amazing success of that handful of San Jose State college students who qualified and passed a $10 minimum wage hike in one of America’s largest cities against the opposition of nearly the entire local political establishment. My writings regularly mentioned successful initiatives to raise the minimum wage and I continued to pride myself as having spent years as America’s “initiative guy” but my faltering brain cells never once connected these two items. None of us are ever as smart or as insightful as we sometimes pretend to be.

 

Fortunately, a brief opening eventually appeared in the heavy layers of fog beclouding my mind, and one morning I glanced up from my coffee and newspapers and thought “Wow!” Even more fortunately, the idea came to me while there was still reasonable time to qualify an initiative for the November 2014 ballot, which I am now doing.

One standard roadblock in the preparation of a successful initiative is the lengthy legal drafting process, usually involving many weeks of careful scrutiny to ensure that the measure’s complex language possesses both the political and legal viabilities necessary for survival. This was certainly the case with the many dozens of detailed paragraphs contained in my 1998 “English” initiative. But raising the California minimum wage requires merely a single sentence, an amendment of the existing statute with higher figures substituted. An initiative of such a highly unusual type allows the operation of a total stealth campaign organized to avoid all media leaks, the sort of campaign that provides considerable advantages if successfully implemented.

So far, I’ve certainly been extremely pleased with the results, though much of this is clearly due to the general media landscape of the last couple of months, in which the plight of America’s low-wage workers has grown to become a regular headline story, intensifying as the Holiday Season grew near. Stories of Walmart workers being asked to donate food to other Walmart workers went viral even while I was sitting at my computer finalizing my initiative language and the political strategy behind it. Sometimes the wind happens to blow in exactly the right direction.

And how it has blown! According to Topsy, the NYT article breaking the story of my initiative effort generated a remarkable 707 Tweets, ranking in the Top 100 on the Internet. Then a couple of days later, a lengthy and related NYT story on the general plight of low-wage retail workers, which was clearly based on weeks of detailed reporting effort but also mentioned my own California campaign, scored an astonishing 1400 Tweets.

Unsurprisingly, the coverage my effort has received from the liberal media has mostly been very friendly and supportive, though sometimes expressing shock at the notion that a conservative could be backing such a supposedly liberal proposal: “Hell Freezes Over” was the title of a lengthy column in the progressive San Diego Free Press. Columnists Michael Hiltzik of the Los Angeles Times and Jerry Large of the Seattle Times and Prof. Jeffrey Sommers in The Milwaukee Journal-Sentinel have similarly been very pleasantly surprised to see their own views echoed by someone located across the ideological aisle, and numerous other liberal bloggers and pundits have had the same reaction. A certain Michael Pettengill writing on Prof. Mark Thoma’s blogsite was even more direct, wondering why progressives such as “Krugman and Thoma” never framed the economic issue as effectively as I had.

Indeed, a not-uncommon refrain from some disgruntled Democratic activists was been the perspective of Jon Walker writing on the liberal blogsite FireDogLake, who bemoaned the irony of a “lone conservative…pushing the Democratic establishment…to the left on this issue.” This angry reaction was surely reinforced by the initial public statements of a union spokesman in the original Times piece and elsewhere, who argued that the recently passed legislative statute raising the California minimum wage to $10 per hour by 2016 was more than adequate and criticized my own efforts aimed at a much larger figure as an unwelcome “distraction.” In fact, recent academic studies have suggested that California’s cost-of-living is as much as 30% above the national average, implying that even a $10 rate here is closer to our existing federal $7.25 figure, leaving our state with the highest poverty rate in America, and clearly demonstrating the total inadequacy of the California’s $8.00 current minimum wage.

Obviously, not everyone has supported my proposal. Reihan Salam, National Review’s chief policy analyst, quickly published a lengthy profile of my effort, quite respectful but also skeptical that all of my arguments were correct. Doctrinaire libertarian economics professor Bryan Caplan—my erstwhile opponent in the recent televised debate—strongly opposes all minimum wage laws and argued that raising the costs of low-wage service workers to $12 per hour would lead to a do-it-yourself economy, defeating the intended purpose; I tend to doubt that the resulting one percent rise in Walmart’s prices would actually produce such a massive consumer reaction. And Caplan’s close colleague New York Times Economics Columnist Tyler Cowen dismissed such local efforts to raise the minimum wage as “a classic instance of expressive voting at the expense of good economic policy,” leading one of his sharp-eyed commenters to very effectively quote my own past arguments back at him.

But dogmatic conservative or libertarian policy experts—eggheads—are one thing, and the sort of people who actually guide and influence the conservative base are another. So far I’ve been interviewed on three of the West Coast’s largest conservative-talk-radio stations and the responses have been extremely gratifying, with the hosts initially surprised that there could be any “conservative” case whatsoever for a major hike in the minimum wage, but quickly seeing the reasonableness of some of my arguments. As I’ve repeatedly pointed out in the past, our current low-wage economy allows companies to pay their own workers much less than a minimum cost of living, with the large gap being necessarily filled by government social welfare programs. I think it makes much more sense for businesses to pay their own workers rather than shifting the burden to the ordinary taxpayer, though obviously business lobbyists and business-funded thinktankers might disagree.

Another of my arguments about political strategy will also receive a thorough exploration. Over the last couple of years, I’ve often suggested that a much larger hike in the minimum wage has far greater inherent political viability than a smaller boost because its benefits extend far beyond the lowest-wage, overwhelmingly Democratic voters, instead reaching well into the socially-conservative Walmart base of the Republican Party, especially in the South, an argument that columnist Michael Tomasky recently considered. The situation on the ground in California may not be nearly so strong, but should still provide a preliminary test of my hypothesis.

In any event, I do believe that my $200 filing fee for my California Minimum Wage initiative was money well spent, sparking exactly the sort of national media discussion—a public dialogue on American wage policy—that I’d intended, and one that will probably continue on, with ever increasing intensity, until the November polls close on Election Day 2014.

A national rise in the minimum wage to $12 per hour would increase the income of American workers by well over $150 billion each year and—with the exception of the problem-plagued ObamaCare—possibly constitute the most significant domestic policy change since the late 1960s. In 2012, my late friend progressive journalist Alex Cockburn described it as “the most important issue in America today.” During the two-plus years I’ve been pressing this proposal, I always told people it would never happen in a million years. Now I’m not so sure.

As readers have noticed, this particular minimum wage column focuses almost exclusively on the history and politics of my current campaign, while mostly avoiding the policy issues behind it. I’ve already published around 30,000 words on the latter subject and will probably be publishing another 30,000 during the next twelve months, but his one time I thought I’d make a conscious exception.

And with luck, our campaign website at www.HigherWages.org will be up and running in serviceable fashion within another few days, providing copious background material on this entire topic.

 
• Category: Economics, Ideology • Tags: Minimum Wage 
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  1. Anonymous says: • Disclaimer

    I came over here on Fred Reed’s recommendation. So far I am not impressed. I couldn’t get thru this narcissistic shit piece where your primary concern is how many people are aware of “your” $12/hr min wage proposal. Well, I for one am not. But *I* have an even better proposal: a $13/hr minimum wage! It’s so easy to spend other people’s money, and who else could have ever come up with that in a million years. God, I’m creative!

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  2. Dahlia says:

    “So far I am not impressed. I couldn’t get thru this narcissistic shit piece where your primary concern is how many people are aware of ‘your’ $12/hr min wage proposal. Well, I for one am not.”

    Men sometimes. I love the behind-the-scenes, the thought process if you will, as do most women. I thoroughly enjoyed it.
    I think it is a noble thing you’re undertaking and I hope it passes and does the things you hope it will.

    I wanted to share this as you may find it useful:

    http://video.pbs.org/video/2365121632/

    PBS did a documentary on class back in 2001 and they aren’t kidding when say Tammy Crabtree, the Burger King minimum wage worker from southern Ohio, along with her son, Matt, was one of the most affecting profiles of the film. They went back and visited just this year so it’s not out-of-date.
    Tammy didn’t accept welfare and it took her ten miles to walk to work (now it’s considerable less). She still makes minimum wage.

    She was hauntingly soul-baring and no video has touched me so much about that kind of poverty even though I’m well acquainted with people who live similarly and are similarly proud and defiant.

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  3. “A national rise in the minimum wage to $12 per hour would increase the income of American workers by well over $150 billion each year”

    Huh?

    12-7.25=4.75 * 1.6 million workers *2000 hrs = 15.2 billion

    The 1.6 billion are those making minimum wage in 2012 according to the BLS. Even if you include the 2 million making less than that (something that does not make sense because most of those are paid mainly with tips) you still only get 34.2 billion. Where’d you get your data? Krugman?

    Even if it was 150 billion, how does that impact a 16 trillion GDP? Not much.

    Where would this money come from? There is no free lunch. Businesses would have to close, cut back on labor, replace workers with robots (already happening), or let it impact stock prices or dividends which impacts retires and pensions. Maybe your eyeing up businesses hoards of cash? There are problems with that too. Cash sits for a reason – uncertainty. Not to mention it legally belongs to stock holders (many who are retires who rely on dividend income)

    A minimum wage is an economically illiterate concept. It creates unemployment, especially for the young who need entry level job experience. It does force businesses to become more efficient by replacing workers with machines. Maybe that’s your goal?

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  4. Ok, I’m a bit embarrassed. My calculations were wrong. 150$ billion may be correct, as long as you assume there aren’t any unintended consequences. But I recall Frederic Bastiat busted that myth back in 1850.

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  5. Weaver says:

    @Fred reeders,

    Increasing the minimum wage does create unemployment in the short-term. No one denies this.

    However, specifically a higher minimum wage in California would cause those who cannot find work to leave. And Unz’s argument rests on America taking in only those immigrants who can fill jobs that pay so well, as well as actually enforcing laws already in place (currently laws are not enforced, see numbersUSA). In this manner we take in higher quality immigrants who are overall net contributors to society.

    Currently America is flooded with immigration which maintains low-wage businesses. And currently many who enter are net consumers, not contributors (see Richwine Heritage study). If America takes in only the best/most-needed, those immigrants will contribute until they create demand for the less-capable/less-needed unemployed.

    If the minimum wage is higher, we can do away with some social programs. If the quality of worker in the US is higher, there will be increased voter support for a freer market.

    Basically Unz is looking at the US as a complete system. Two disclaimers: I’m a Buchananite, so I have certain objections; and I have not read most of Unz’s work. I’m using some intuition here.

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  6. Anonymous says: • Website • Disclaimer

    You are not thinking nearly big enough by proposing an increase to only $12 per hour. We should just raise the minimum wage to at least $100 per hour. Just think how wealthy everyone would be! ;-)

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  7. Raising the minimum wage does have merit in that it will encourage the development of automation as an alternative to cheap labor. However, certain policies need to be implemented to reduce the fertility of that cheap labor (non-coercive of course). One such recommendation would be to repeal the Hyde Amendment of 1978, which banned the payment for abortion by Medicaid. I always thought the Hyde Amendment was a particularly stupid piece of legislation.

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  8. WhatEvvs [AKA "Bemused"] says:

    But dogmatic conservative or libertarian policy experts—eggheads—are one thing, and the sort of people who actually guide and influence the conservative base are another.

    It is never a sign of strength to dismiss opponents as “eggheads”. Probably as opposed to the touchy, feely, maybe even “völkisch”, proponents of minimum wage reviews.

    Or was this self-deprecating sarcasm?

    Anyway, it’s interesting. A “minimum wage” discussion makes of course sense only in an economy that is in utter stagnation, with inflation going upwards and low-skill job prospects going downwards if not disappearing altogether, either because the low-skill workforce’s selling power is weakened (Glut) or no-one is buying (The end of ‘average’ coming early? Hiring too difficult or costly? Large amounts of “regime uncertainty”?) or both. Otherwise the discussion wouldn’t be had.

    Short-circuiting 5V to 10V with no resistor in series might energize the system, but probably not in the long run.

    Well, who knows.

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  9. I have a business where i pay no one minimum wage. why? because i cannot have them coming to work dead tired, making even more mistakes than ususal from language problems, and having the divided loyalties inherent in having TWO jobs. Why stop at 12/hour— move it to 50/ hr and kill the small businesses mercilessly and quick. And this time, stop throwing out 500K loans from the SBA to kill off the fewstragglers who operate as wealthy hobby owners. You desperately need any economic theory besides the Keynsian claptrap you surely believe in.

    The ruling elite does not care that the are no jobs. They exported them and junked them long ago. This hand-wringing and printing press solution (and imported workers who don’t care or need to assimilate) is two decades too late.

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