In a lead article published late yesterday, headlined How a powerful rightwing lobby is plotting to stop minimum wage hikes Britain's Guardian newspaper (hello American media???) reports that the conservative business-friendly group ALEC met recently to strategize policy on how to combat the nationwide drive to increase the minimum wage.
ALEC gained fame and visibility in recent years when progressive groups began noticing that legislatures across the country were almost simultaneously taking up and passing business-friendly legislation - much of it almost identical in language.
Despite its generally low profile, ALEC has drawn scrutiny recently for promoting gun rights policies like the Stand Your Ground law at the center of the Trayvon Martin shooting case in Florida, as well as bills to weaken labor unions and tighten voter identification rules. Amid the controversies, several companies, including Coca-Cola, Intuit and Kraft Foods, have left the group.
Most of the attention has focused on ALEC’s role in creating model bills, drafted by lobbyists and lawmakers, that broadly advance a pro-business, socially conservative agenda. But a review of internal ALEC documents shows that this is only one facet of a sophisticated operation for shaping public policy at a state-by-state level. The records offer a glimpse of how special interests effectively turn ALEC’s lawmaker members into stealth lobbyists, providing them with talking points, signaling how they should vote and collaborating on bills affecting hundreds of issues like school vouchers and tobacco taxes.
According to the Guardian article:
Alec’s plan to oppose minimum wage increases at the local level was set out in a recent meeting in Washington DC that brought together Republican legislators with several large corporate backers. The meeting was closed to journalists, but the Guardian has obtained details of the discussion from participants.
The Guardian notes that with efforts at the national level to increase the minimum wage stalled by powerful lobbyists in Washington, promoters of minimum wage increases have been working at the state and local level to force change....most famously in Seattle where voters approved a major hike to $15 an hour.
At the recent meetings, ALEC executive Cara Sullivan said the goal is to:
...frame and then lobby for model legislation in state assemblies across the country. She said that so far 12 states, most recently Oklahoma, have submitted anti-increase legislation based on the rightwing lobbyists’ language. “Our solution that Alec has passed is state legislation that pre-empts the polities from within the state from raising the minimum wage higher than state level,” she told the meeting.
Such strategy plays right into ALEC's strengths since many state legislatures are now under strong Republican control and passage of ALEC-crafted bills can be swiftly achieved. Furthermore, by using state laws to set a cap, ALEC hopes to snuff out the growing trend to win higher minimum wage hikes at the local level. Sullivan was quoted as stating that the successes at the local level were like a game of Whack-A-Mole and ALEC was trying to "...beat them down when they pop up."
In arguing against significant increases, ALEC is using that old and dis-proven trope that they will harm small businesses and decrease employment. But the Guardian cites experts and research studies that refute the claims including a Department of Labor Mythbuster posting on the subject.
Multiple studies have over many years, comparing cross-border jurisdictions with and without minimum wage provisions, have found that employment expands in line with wages.
“This is probably the most studied topic in labor economics,” said David Cooper, an economic analyst at the Economic Policy Institute. “The notion that a higher minimum wage will lead to job losses just isn’t borne out by the research.”
ALEC members are also pursuing lawsuits in opposition to minimum wage hikes. A spokesman for the International Franchise Association, with 1,400 members including Dunkin' Donuts and Subway, is challenging the Seattle hike.
ALEC acknowledges that it is fighting an uphill battle. It knows that polls show six in ten voters favor increases and that hikes have passed by solid margins in normally conservative states like South Dakota and Arkansas. The Guardian article asserts that yesterday's surprise announcement by Walmart that it plans to increase minimum wages for its workers to $9 an hour was driven in part by the passage of the Seattle hike and a recognized need to compete for good workers.
But ALEC has powerful allies, despite the loss of some members in the wake of unfavorable publicity and the group's support of Stand Your Ground bills. And as noted, if it can win caps at the state level, it can make it harder in many states for supporters of increases to win battles in major municipal jurisdictions.
Even the conservative business journal Forbes acknowledges that major corporations like Walmart have benefitted mightily by the present system, not just in terms of paying very low wages to their workers, but in the federal subsidies their workers often collect in order to survive:
Walmart’s low-wage workers cost U.S. taxpayers an estimated $6.2 billion in public assistance including food stamps, Medicaid and subsidized housing, according to a report published to coincide with Tax Day, April 15.
Americans for Tax Fairness, a coalition of 400 national and state-level progressive groups, made this estimate using data from a 2013 study by Democratic Staff of the U.S. Committee on Education and the Workforce.
“The study estimated the cost to Wisconsin’s taxpayers of Walmart’s low wages and benefits, which often force workers to rely on various public assistance programs,” reads the report, available in full here.
“It found that a single Walmart Supercenter cost taxpayers between $904,542 and $1.75 million per year, or between $3,015 and $5,815 on average for each of 300 workers.”
And that is just Walmart....multiply that by hundreds of other major corporations like McDonalds, large restaurant and hotel chains and more.
ALEC's Sullivan, in the recent meeting, said her organization "has the PR" to tell a compelling story, citing an Asian couple who plowed their life savings into a hotel franchise and now "will lose it all because they can't afford the $15 minimum wage." They are also looking to paint the issue as a battle against "big labor", despite the fact that labor has been fighting rear-guard actions just to survive including the recent announcement by WI Governor Scott Walker that he will violate a campaign pledge and sign "right to work" legislation if passed (and with a heavily GOP legislature under his control it will pass.)
Framing the Argument for Minimum Wage
I have long argued that proponents of Minimum Wage increases need to properly frame their arguments to help sway natural allies....middle class voters who have bought into the argument that such wage increases kill jobs and drive small businesses out of business.
As noted above, research studies show that this is not true.
And the bottom line is that minimum wage levels, locked at low levels for years despite inflation, provide far too little income for workers to survive on. Opponents argue that minimum wages are paid to young workers who are just in temporary positions and would lose job opportunities as a result.
According to a NY Times article on the subject:
Minimum-wage workers are older than they used to be. Their average age is 35, and 88 percent are at least 20 years old. Half are older than 30, and about a third are at least 40.
These patterns are somewhat new. In 1979, 27 percent of low-wage workers (those making $10.10 per hour or less in today’s dollars) were teenagers, compared with 12 percent in 2013, according to John Schmitt and Janelle Jones
They’re split fairly evenly between full-timers and part-timers. Most — 54 percent — work full-time schedules (at least 35 hours per week), and another 32 percent work at least half time (20-34 hours per week).
And remember the Forbes figures about the over $6 BILLION in government subsidies collected by Walmart workers alone. That is $6 billion that all of us, as taxpayers, pay because Walmart will not pay a decent living wage. And the same holds true for the hundreds of other major businesses whose workers have to turn to the government for welfare, heating assistance, food stams and subsidized housing to survive.
So I ask those people...."You complain about having to pay for welfare, and it is true that welfare and its benefits are a brutal, demeaning, and highly inefficient and bureaucratic system.
"But you are paying for that system, in part, because companies like Walmart are NOT paying adequate wages and not paying fair taxes and in increasing numbers of cases, moving their profits overseas to avoid paying any taxes. You pay for it...they don't.
"If the minimum wage were increased, all of us would pay a little bit more for the goods and services involved, but if the increase were large enough to sustain at least a minimum level of life quality....housing, transportation, child care, food....the workers involved would be able to reduce or end their reliance on welfare and receive the resources they need for a decent life directly and with far less bureaucracy.
So the bottom line question is....which method would you prefer to use to deal with this problem?....pay for inefficient welfare that subsidizes corporate avoidance of its responsibilities OR pay the workers directly and let them return those increases back into the economy quickly since studies repeatedly show that lower income workers cycle their incomes much more rapidly into goods and services than the very wealthy.