<\/p>\n

The Article:<\/strong> Washington Shows Highest Minimum Wage State Beats US With Jobs<\/a>in Bloomberg.<\/p>\n

The Text:<\/strong> When Washington residents voted in 1998 to raise the state\u2019s minimum wage and link it to the cost of living, opponents warned the measure would be a job-killer. The prediction hasn\u2019t been borne out.<\/p>\n

In the 15 years that followed, the state\u2019s minimum wage climbed to $9.32 — the highest in the country. Meanwhile job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate. Payrolls at Washington\u2019s restaurants and bars, portrayed as particularly vulnerable to higher wage costs, expanded by 21 percent. Poverty has trailed the U.S. level for at least seven years.<\/p>\n

The debate is replaying on a national scale as Democrats led by President Barack Obama push for an increase in the $7.25-an-hour federal minimum, while opponents argue a raise would hurt those it\u2019s intended to help by axing jobs for the lowest-skilled. Even if that proves true, Washington\u2019s example shows that any such effects aren\u2019t big enough to throw its economy and labor market off the tracks.<\/p>\n

<\/p>\n

\u201cIt\u2019s hard to see that the state of Washington has paid a heavy penalty for having a higher minimum wage than the rest of the country,\u201d said Gary Burtless, an economist at Brookings Institution who formerly was at the U.S. Labor Department.<\/p>\n

Raising the U.S. minimum wage to $10.10 in three steps, as Obama proposes, would reduce employment nationally by about 500,000 workers, or about 0.3 percent, according to a Congressional Budget Office report published Feb. 18. At the same time, the increase would lift 900,000 people out of poverty and add $31 billion to the earnings of low-wage Americans, the report found.<\/p>\n

Yellen\u2019s View<\/strong><\/p>\n

While debate persists on the employment effect, \u201cCBO is as qualified as anyone to evaluate that literature, and I wouldn\u2019t argue with their assessment,\u201d Federal Reserve Chair Janet Yellen said Feb. 27 to the Senate Banking Committee.<\/p>\n

Looking past the effect on jobs, increasing the minimum hourly wage to $10.10 would also reduce food stamp expenditures by about 6 percent, or nearly $4.6 billion a year, according to a report this week from the Center for American Progress. The Washington-based research institute, which was founded by Obama adviser John Podesta, released its report as the president reiterated his call for a higher wage floor.<\/p>\n

Washington voters in November 1998 approved increasing the state\u2019s minimum wage in two stages to $6.50 and tying future annual changes to inflation as measured by the consumer price index.<\/p>\n

Groups representing retailers, restaurants and hotels opposed the measure, according to a voters pamphlet on the 1998 election published by Washington\u2019s Office of the Secretary of State. Employment in those industries has increased in the state of Washington since then, Labor Department data show.<\/p>\n

One possible explanation: Businesses have plenty of ways besides job cuts to absorb the costs of a minimum-wage increase, according to Arindrajit Dube, an economist at the University of Massachusetts at Amherst, whose research found no significant effects on employment. Price increases, reductions in profits and savings from lower turnover can help soak up the shock.<\/p>\n

\u201cWhen you put all of these together, then the finding that moderate increases in minimum wages do not appear to have much of an effect on employment is less surprising,\u201d Dube said in an interview.<\/p>\n

Not everyone buys that argument. Minimum-wage laws not only reduce employment opportunities and earnings for low-wage workers, they also reduce demand for their labor as it\u2019s replaced by other forms of capital, according to research published in 2008 by David Neumark, an economist at the University of California at Irvine, and William Wascher, an economist at the Federal Reserve Board of Governors in Washington.<\/p>\n

Boehner, Reid<\/strong><\/p>\n

The federal minimum-wage legislation is opposed by business groups such as the National Retail Federation, along with many Republicans, including House Speaker John Boehner of Ohio.<\/p>\n

In the Democratic-controlled Senate, Majority Leader Harry Reid of Nevada on Feb. 25 postponed a vote on the legislation, a centerpiece of the party\u2019s election-year focus on income inequality. The delay until senators return March 24 from a week-long break gives labor unions more time to organize support for the proposal, said a Senate Democratic leadership aide who requested anonymity to discuss strategy.<\/p>\n

Gridlock in Congress may mean the debate is waged more immediately by states and cities instead of at the federal level.<\/p>\n

State Minimums<\/strong><\/p>\n

As of January, 21 states and the District of Columbia had a higher minimum wage than the federal floor. Cities including San Francisco and Santa Fe, New Mexico, require even higher hourly earnings than the proposed federal level, at $10.74 and $10.66 respectively.<\/p>\n

New Jersey voters in November approved increasing the minimum wage by $1 an hour to $8.25, tying future increases to the consumer price index. In January, after the raise took effect, private employers added 8,320 jobs in New Jersey, according to ADP Research Institute. That was the fastest pace of job growth since December 2012.<\/p>\n

Joe Olivo, the chief executive officer of Perfect Printing, a Moorestown, New Jersey, company that makes materials such as marketing brochures for businesses, was among those who opposed the state\u2019s minimum-wage increase. Since it began, he hasn\u2019t cut his 48-person staff. Instead, he\u2019s looking to pass on the costs by raising prices, a step that he said could impede his business\u2019s ability to grow and hire in the future.<\/p>\n

Detrimental Impact<\/strong><\/p>\n

\u201cIf I am losing work and I have less money to grow, what good does it do for those employees that are looking for future work?\u201d said Olivo, 47. \u201cThe people that are looking for jobs find it harder.\u201d<\/p>\n

Those kinds of long-term costs leave economists including Charles Brown undecided in the debate. Brown is a professor of economics at the University of Michigan in Ann Arbor who reviewed the CBO\u2019s analytical approach.<\/p>\n

\u201cThe report does a very careful job of trying to make the best use of the available literature,\u201d Brown said in an interview. \u201cIf I balance short-run gains against short-run losses, this looks like a reasonable thing to do. The problem is, we don\u2019t have a good handle on how large those long-run effects are likely to be.\u201d<\/p>\n

Washington\u2019s relatively benign experience with a higher minimum has encouraged some communities in the state to push for even more.<\/p>\n

$15 Minimum<\/strong><\/p>\n

SeaTac, Washington, a Seattle suburb where the major employer is the region\u2019s international airport, voted in November to raise the hourly minimum by more than 60 percent to $15 for 6,300 people who work at the airport, hotels and nearby businesses.<\/p>\n

Companies including parking lot operator MasterPark LLC had said the higher pay might lead to job losses. Since it passed, 140 MasterPark employees have received raises and the company hasn\u2019t cut jobs because that might compromise service, managing partner Roger McCracken said.<\/p>\n

\u201cWe\u2019re in the valet business — that means employees,\u201d he said. Instead, the company responded by tacking on a 50-cent daily \u201cliving-wage surcharge\u201d to prices.<\/p>\n

Now, Seattle Mayor Ed Murray, a Democrat elected in November, is following SeaTac\u2019s lead as he also promotes raising the city\u2019s minimum to $15. A task force of business and labor representatives, advised by academics from the University of California at Berkeley and the University of Washington in Seattle, is meeting monthly and hopes to produce a proposal in April, Murray said in an interview.<\/p>\n

The Seattle-Tacoma-Bellevue metropolitan area ranks 14th in a list compiled by Bloomberg of 50 cities where it\u2019s hard for fast-food workers to gain upward mobility, based on median pay compared with rent, tuition and health-care costs. Advocates such as Murray say a higher minimum would help change that.<\/p>\n

\u201cWe can\u2019t rebuild this economy if it\u2019s just people who buy 94-foot yachts and play in the derivatives,\u201d Murray said. \u201cYou build an economy when a middle class is buying microwaves or flat-screen TVs or the next set of clothes for their kids.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The Article: Washington Shows Highest Minimum Wage State Beats US With Jobsin Bloomberg. The Text: When Washington residents voted in 1998 to raise the state\u2019s minimum wage and link it to the cost of living, opponents warned the measure would be a job-killer. The prediction hasn\u2019t been borne out. In the 15 years that followed, […]<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[259],"tags":[],"yoast_head":"\n