Minimum Wage

Buried in the Republican Wave Are Votes to Increase Minimum Wage


$100 minimum wage? Sure why not.

An interesting dynamic is contrasting tonight's embrace of Republican politicians – votes in favor of increases in the minimum wage.

So far, South Dakota, Arkansas, and Nebraska have voted to increase their minimum wages today. You will note that these states are not hotbeds of progressive politics. Alaska has a pending vote to raise theirs as well. We should not be surprised to see it pass either. We know from polls that raises in minimum wages are popular up until people are told that increases may cost jobs. Then they turn against it. Emily Ekins explains how that polling works here. A majority are okay with it increases in minimum wages driving up prices. But if it costs jobs, a majority turns against it. 

And so the debate becomes about costing jobs. Does it really? We have a real world example to explain. In Los Angeles, the city passed an ordinance requiring "living wages" for employees of hotels near the city's airport back in 2008. As they considered expanding the law to all large hotel workers in the city earlier this year they commissioned studies to analyze the impact of their previous increase. Here's what Christopher Thornberg of Beacon Economics discovered:

The data clearly show that hotels around the airport have seen a sharp decline in employment relative to hotels in Los Angeles County overall. Some 12% more people are employed at hotels in the county than in 2007. The increase is apparent not only at hotels in general but within individual hotels, which means the jump cannot be attributed to an increase in the number of hotels elsewhere in the county. But in the airport hotels covered by the law, hotel employment has declined 10%.

As for the seeming disconnect between steadily high room occupancy and fewer jobs, modern large hotels are far more than a place to sleep at night. They offer a variety of restaurants, bars, parking garages, banquet and conference halls and tourist information centers. Anecdotally we have heard that many of these secondary lines of business have been sharply curtailed or eliminated because of the increase in labor costs. If higher wages have made banquets, say, more expensive to hold at airport hotels, it would be no surprise if organizations have decided to hold their banquets elsewhere.

Unfortunately the city didn't seem to actually care about Thornberg's report and voted for the increase anyway. 

UPDATE: I left off Illinois. Voters also approved an increase in minimum wage in Illinois, but this was just an advisory vote and is no way binding. Conservatives complained this question and some others were put on the vote entirely to get out the Democratic vote. Not that it helped. Incumbent Gov. Pat Quinn (D) has been tossed out in favor of Bruce Rauner.