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Is it time to revisit the minimum wage?
In 1998, 67 percent of Washington voters approved Initiative 688, requiring the state’s
minimum wage to be recalculated annually based on inflation and the Consumer
Price Index. In the wake of the Great Recession, though, should the Washington State
Legislature revisit the way the minimum wage rate is adjusted?
don’t starve the
economic engine
of its gas
Rep. Mike Sells, D-Everett
When it comes to Washington’s minimum wage, it seems the
debate often devolves into anecdotal arguments of the “My
cousin’s friend’s dad’s employer…” nature.
But as a legislator charged with making decisions that may
wield some influence on the state’s economy, I can’t rely on
anecdotes. And to me, the evidence is clear: The state’s minimum wage is contributing to our
state’s success, not impeding it.
consumer spending
There may be a misperception
that our minimum wage is why
unemployment is high. But, the
data doesn’t support that. South
Carolina, for instance, has no
law setting a minimum wage
above that of the federal standard
of $7.25. Despite this, they are
suffering an 11.1 percent unemployment rate.
In a consumption-based society, you don’t starve the economic
engine of its gas. Minimum wages are an “economic driver” for
many businesses that rely on
the spending of low wage earners. Lowering them would only
exacerbate economic decline, not
16 association of washington business
Rep. Mike Sells, D-Everett
to mention the contribution it would make to the massive
income inequality that is already driving many to the streets
in protest.
The simple fact is, with consumer spending accounting
for 70 percent of the U.S. economy, and more than half of
Americans investing in stocks, the American economy will
struggle to regain its footing until stock prices and consumer
spending bounce back. “If consumers are not spending, this
economy is going nowhere,” said Bernard Baumohl, chief
global economist at the Economic Outlook Group.
i-688: a clear message
Wall Street might very well be the best economic indicator to look to when judging minimum wage impacts. We’ve
never experienced a massive sell-off following an increase in
the minimum wage. No stocks ever tumbled following news
that Washington’s lowest-income
workers would receive a few cents
more per hour.
We do, however, see a drop in
the Dow when consumer spending
dries up. The markets know that
the best way to support growth
is to ensure they not only have
the spending power to meet their
needs, but also meet a few of their
“wants.” It means more shoppers
in our stores and restaurants, and
fewer families on public assistance.
When the voters of Washington overwhelmingly passed I-688,
they sent a clear message that said
someone who puts in an honest
day’s work shouldn’t live in poverty. While our state’s minimum
wage may be succeeding at that, it’s
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