SEATTLE, December 21, 2013 — Residents of areas near the Seattle-Tacoma International Airport (SeaTac) voted to raise the minimum wage for hospitality and transportation workers from $9.19 an hour to $15 an hour. The president of a local SEIU chapter said that voters were sick of waiting for companies and Congress to take action against stagnant wages. He added, “For the first time in many years, the people who put fuel in jets might just be able to buy a ticket on one.”
It’s about time.
Addressing the underlying factors that make wages stagnant is unimportant, and far too complicated. Avoiding this issue is a nice side benefit, too, as creating an environment where opportunity flourishes is much more difficult. It is much easier to support a “we care more” ballot measure and mandate economic results.
Feeling good and grandstanding is a much better political platform than supporting basic free-market capitalism. Especially in Seattle.
Historically, most economists have argued that minimum wage requirements are not the panacea imagined by the left. They result in fewer workers, decreased opportunities for the unskilled, increased costs to business owners, and benefit only those who are able to keep their jobs under the new wage requirements. Increased unemployment, fewer job openings, lower profits, and layoffs are less visible and therefore easily ignored.
The primary motivator for increasing the minimum wage, of course, is to insert governmental action into the private marketplace. Wages are stagnant? Force them higher. Voila, problem solved.
Elected officials acting wisely and compassionately solve all pesky marketplace problems, so kudos to the residents of SeaTac for doing something about it.
There is a big problem, however, with this measure: it does not go far enough. These workers should be offered a living wage, not just a minimum one.
A living wage is the minimum income necessary for a worker to meet basic needs. These needs amount to maintaining a safe and decent standard of living within the community. Obviously, this amount varies from location to location.
A living wage in Seattle is $65,994.72 per year.
Rent (in Fremont, where all good progressives live): $1,000 a month
Transportation (monthly rail/bus pass – NO car): $300 a month
Physical health (Planet Earth yoga): $225 a month
Spiritual health (Seattle Mosaic Arts membership and classes): $300 a month
Medical (Washington State Health Exchange): $300 a month
Food (PCC Natural Market as Whole Foods has sold out): $800 a month
Discretionary spending: $1,200 a month
Total minimum monthly living expenses: $4,125
And yes one could reduce some of those expenses, like food and health care. Shop at a discount grocery, take a walk instead of yoga and go to church for spiritual enlightenment.
Of course, in order to net $4,125 per month, one must earn roughly $5,500 per month. $5,500 per month is $1,375 per week; a four-week month is assumed, as the working year is 48 weeks, leaving room to take four weeks of unpaid vacation.
Vacation cannot yet be considered as a necessary item for the purposes of this discussion, as a result of the still-lingering effects of the local tea party activists. Or activist, as the Seattle area has just one tea party member. Hopefully this inequity will be addressed during the next election cycle, which will add paid vacation to the definition of living wage.
To earn $1,375 a week at a 29-hour a week job (all Sea-Tac employees work only 29 hours per week so the employers do not have to pay for healthcare), the hourly wage must be $47.41.
But even removing and reducing those expenses to $3,000 per month and only taking a two week vacation, the minimum wage necessary is $36,000 per year before taxes, or $25.00 per hour. This is far more than $15.
Here’s hoping someone starts a ballot initiative today to correct the wrong just perpetrated. Everyone deserves a living wage.
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