After Monday's news that Seattle's $15 minimum wage experiment is actually lowering low-wage employees' income, restaurant workers in Maine must be feeling pretty prescient. Their minimum wage saga started back in November, when voters approved a referendum raising their minimum wage from $3.75 an hour in 2016 to $12 by 2024.
The intention was to lessen servers' reliance on tips, a plan that only sounded good to people who aren't servers. Since that vote, restaurant workers have lobbied the state legislature to undo the change, arguing it will mean lower income and preferring to maintain the tips system instead. This month, lawmakers voted overwhelmingly in their favor, and Gov. Paul LePage (R) signed the bill into law late last week.
The servers' stance has them at odds with labor activists who insist tipped wages expose restaurant workers to exploitation. "I don't need to be 'saved' [by activists], and I’ll be damned if small groups of uninformed people are voting on my livelihood," said Sue Vallenza, a Maine bartender who saw her tips decrease after the referendum. "You can't cut someone off at the knees like that."
A 2014 law designed to incrementally raise the minimum wage of Seattle's low-income workers up to $15 an hour has apparently backfired, a study conducted by University of Washington economists concluded. The findings show that low-wage employees actually lost an average of $125 a month under the new model, or about $1,500 a year, due to employers' reduced payrolls and hours.
Most alarmingly, "the paper's conclusions contradict years of research on the minimum wage," The Washington Post reports. "Many past studies, by contrast, have found that the benefits of increases for low-wage workers exceed the costs in terms of reduced employment — often by a factor of four or five to one."
Massachusetts Institute of Technology economist David Autor, who reviewed the paper, said the study strikes him as "likely to influence people" and called the work "very credible." "If I were a Seattle lawmaker, I would be thinking hard about the $15 an hour phase-in," said Autor.
Still, the research is in its early stages and has not yet been tested by peer review. But based on the preliminary findings, FiveThirtyEight suggests the Seattle experiment — with the highest minimum wage in the nation, at $13 an hour in 2016 — was possibly a case of being too extreme too quickly.
"The literature shows that moderate minimum wage increases seem to consistently have their intended effects, [but] you have to admit that the increases that we're now contemplating go beyond moderate," said economist Jared Bernstein, of the left-leaning Center on Budget and Policy Priorities. "That doesn't mean, however, that you know what the outcome is going to be. You have to test it, you have to scrutinize it, which is why Seattle is a great test case." Jeva Lange
A tentative deal has been reached between California lawmakers and labor unions over raising the state's minimum wage to $15 an hour.
Sources confirmed the deal to the Los Angeles Times on Saturday, and said Gov. Jerry Brown (D) could announce it as early as Monday. Polling in the state suggests that if a minimum wage proposal appeared on a ballot, voters would approve it, and having lawmakers vote on it would save money.
A document viewed by the Times shows that starting on Jan. 1, 2017, the minimum wage would get a boost from $10 to $10.50, followed by another 50 cent increase in 2018, then $1 a year through 2022. Companies that employ fewer than 25 people would have one additional year to reach $15 an hour. Any future increases to minimum wage in the state would be linked to inflation, with the governor having the ability to temporarily put a hold on the increase in case of economic troubles. Catherine Garcia