Hey, Washington! The Pay Is Too Damn Low: The Minimum-Wage War

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Nearly all minimum-wage jobs – greater than 85 percent – are now found in restaurants, retail, nursing homes and office buildings. Jobs loading up the deep-fat fryer, changing bedpans and mopping floors can't be shipped to Bangladesh or cheaply automated. The dark reality of the American economy today is that globalization has already done its number on us. "These are the jobs that are left, and they're left for a reason," says Dube. "Barring teleportation," he says, laughing, these jobs will have to be filled in America even at higher wages.

Counterintuitively, those higher paychecks can create benefits for the businesses that write them. Better pay leads to quicker hiring, reduced turnover and happier workers. The success of high wage discount retailers like Costco demonstrates that livable wages and low prices aren't mutually exclusive. But even if every penny of increased labor costs were passed on to shoppers, the results wouldn't give anyone sticker shock. A UC Berkeley study found Walmart could finance a pay hike to $12 an hour for its nearly 1 million low-wage associates by boosting prices just 1.1 percent – at a cost to the average shopper of just $12.49 a year, or the price of a bag of Cat Chow.

Minimum-wage hikes haven't always been held back by partisanship. George W. Bush signed the last increase into law in 2007. But with the national GOP wildly out of step with the American public on this issue, Democrats are pressing their advantage. This is not a new playbook. The minimum wage proved its worth as an off-year wedge issue as recently as 2006, when Claire McCaskill ran blistering ads in her Missouri Senate campaign against Republican Jim Talent, describing him as the kind of politician who "votes 11 times against increasing the minimum wage but takes six congressional pay raises." On Election Day, boosted by unusually high turnout, McCaskill secured a 50,000-vote victory.

Seeking to shore up the most vulnerable incumbents in the Senate, labor activists are now pushing state minimum-wage ballot initiatives in Alaska, Arkansas and South Dakota. Quite apart from the obvious economic benefits, the political goal is to give the party's base voters – who often sit out nonpresidential elections – some skin in the game on Election Day.

Proving that the issue can be used to play offense as well as defense, Kentucky Democrat Alison Grimes has turned the minimum wage into the driving issue of her candidacy against Senate Majority Leader Mitch McConnell. The Republican is facing a well-funded primary challenge from the far right, and has chosen to prove his conservative mettle by denouncing a minimum-wage increase as the "last thing we should do."

Noting that 250,000 Kentucky women would benefit from a raise to $10.10 an hour, Grimes has countered that voting for a minimum-wage increase would be her first priority. In early polling, the untested Democrat has leapt to a four point advantage over Kentucky's 30-year incumbent.

The political battle lines have been drawn. But is $10.10 really the best that America can do by its poorest workers? The experience of other advanced democracies suggests that the minimum wage could rise far higher still. In Australia, the minimum wage is now greater than US$16 an hour, yet the unemployment rate Down Under – 5.8 percent – is significantly lower than our own.

Nationwide, there is one high-profile campaign to push the minimum wage significantly above $10.10. Ironically, this leadership is coming from the conservative end of the spectrum. Ron Unz, a Republican multimillionaire from Silicon Valley, is advancing a ballot measure to hike California's minimum wage to $12 an hour.

Unz is best known as a foe of illegal immigration, and he says he was initially attracted to the minimum wage as a means to put U.S. citizens back to work in the kinds of jobs Americans supposedly won't do anymore. But Unz has since embraced livable wages on the economic merits alone – arguing that no American should be forced to subsidize the labor costs of profitable corporations. Unz has especially harsh words for those, like Florida's freshman senator, who would increase the Earned Income Tax Credit instead of forcing Walmart to pay honest wages. "Why should all taxpayers pay for massive, hidden government subsidies?" he asks. "But that's what Marco Rubio and fellow Republicans are calling for: an increase in welfare spending!"

In the past, conservative opposition to higher minimum wages was premised on the fear that they would drive an increase in joblessness, creating greater dependency on the welfare state, Unz says. But now that hard economic data prove the opposite case – that higher hourly wages don't kill job growth and simultaneously reduce reliance on Uncle Sugar – Unz believes there's no reason this policy shouldn't unite both bleeding-heart liberals and Mitt Romney conservatives, who fret about the freeloading of the 47 percent of Americans who don't pay income taxes.

"There are a lot of conservative reasons," Unz says, "to increase the minimum wage."

This story is from the March 13th, 2014 issue of Rolling Stone.

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