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California, New York Launch 60 Million Americans Into A $15 Minimum Wage Economy

CREDIT: AP PHOTO/STEVEN SENNE, FILE
CREDIT: AP PHOTO/STEVEN SENNE, FILE

With the strokes of two pens on opposite sides of the country on Monday, nearly one-fifth of the U.S. population began walking toward a $15 minimum wage.

Roughly 60 million Americans living in New York and California will soon live in economies defined by a baseline wage roughly double the minimum required by federal law. Gov. Andrew Cuomo (D) made New York the first state to adopt the $15 pay floor on Monday morning. California Gov. Jerry Brown (D) put pen to paper on a more ambitious version of the same idea roughly an hour later.

In California, the minimum wage will jump from $10 to $10.50 next year, and then $11 in 2018. After that, it will rise by one dollar annually through 2022.

New York’s more complex version sets up three different tempos for its wage hike. New York City employers will have to hit $15 an hour for all workers by the start of 2019. Workers on Long Island and in Westchester County will see a slower rise, reaching the $15 benchmark at the start of 2022. Those two areas are home to over 15 million of the state’s 19.8 million people. For the rest of the state, minimum wages will reach $12.50 at the start of 2021 and then rise on a yet-to-be-determined schedule toward $15.

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Both laws borrow a key mechanism from the Seattle municipal wage law enacted a year ago, the first $15 minimum wage requirement in the country. California firms with fewer than 25 employees get an extra year to reach the new $15 floor. In New York City, businesses with 10 or fewer workers get four years instead of two. Seattle’s law also set a slower schedule for businesses deemed “small,” though it defined the category as any firm with fewer than 500 employees nationwide. The move helped cement a deal that labor leaders, community groups, and business owners could all agree to.

Each of the laws signed Monday allows the governors to pause the wage hike if economists decide it is hurting economic growth.

But that is unlikely. More money for wages means more spending money in the pockets of people and families lower on the income spectrum, where every dollar increase in earnings produces a much larger boost in consumption at nearby businesses than is true among the wealthy.

Business owners themselves are largely on board with the economic theory behind wage hikes -– to the chagrin of conservative political groups who oppose the hikes.

Right-wing messaging guru Frank Luntz surveyed 1,000 business executives recently on the minimum wage and other policy issues, and found that 80 percent of them support minimum wage hikes of some magnitude. Luntz’s firm presented that information to state Chambers of Commerce, which almost all oppose higher wage laws, in a recent web presentation that was obtained by the Center for Media and Democracy.

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The signings make Monday a banner day for the now-three-year-old nationwide campaign to boost wages and gain union representation for low-wage workers. Fast food workers began walking off the job in New York City in the late fall of 2012. The strikes spread rapidly to all corners of the country over the next year. Workers with the Fight for $15 movement have held regular strikes and protests on more than a dozen occasions since.

Minimum wage hikes have also swept into force at the state and local level, while conservatives in Congress stonewalled White House and Congressional Progressive Caucus efforts to raise the federal pay floor.

The ground-level organizing pressure has been so successful that the movement rapidly exceeded even President Obama’s ambitions. He and other Democrats in Washington had sought a more modest increase, targeting $10.10 per hour. Because the federal law was never indexed to inflation, $10.10 was the figure required to bring minimum-wage buying power back up to the same level it reached in the late 1970s.

But the energy of worker protests and progressive electoral pressure at lower levels of government swamped the modest idea of restoring the wage floor to its psychedelic era rate. The $15 target is now practically mandatory among politicians seeking progressive votes. Sen. Bernie Sanders (D-VT) has called for a national $15 hourly floor, while Sec. Hillary Clinton (D) would like to leave flexibility for less ambitious wage hikes in parts of the country where economic activity might not be strong enough to support the activists’ demands.

In response to the governors’ move today, Obama called for Congress to follow suit. “Since I first called on Congress to increase the federal minimum wage in 2013, 18 states and more than 40 cities and counties have acted on their own — thanks to the strong leadership of elected officials, businesses, and workers who organized and fought so hard for the economic security families deserve,” the president said in a statement released by the White House shortly after New York’s law was signed. “Now Congress needs to act to raise the federal minimum wage and expand access to paid leave for all Americans.”