Never Good Timing for Bad Laws
During periods of a weak economy, the business community has often argued that certain legislative and regulatory ideas are proposed at a particularly onerous time.
When consumer confidence is relatively weak, unemployment is higher than normal and the business community feels threatened, certain government mandates often appear illogical and the last thing anyone should recommend. Issues such as minimum wage increases, mandated paid leave time and health insurance proposals have often been defeated or postponed because “the timing is just not right.”
This position can be a problem because it implies that under “better” circumstances, business may support the proposal. This does not leave the business community much to fall back on when the economy begins to recover and consumer confidence rises.
Is there a time limit on employers using the “bad timing” argument? With a slowly, but steadily, improving economy, it seems the shelf life on this line of defense may be ending.
Businesses themselves may be giving us some insight on that aspect. Just last month, Disney, which we forget is a major service industry employer, announced an across-the-board wage hike to a minimum wage of $10 per hour over the next two years. In March, Starbucks CEO Howard Schultz publicly called for an increase in the federal minimum wage, yet declined to endorse President Obama’s $10.10-per-hour proposal.
This is good news for members of the labor movement who have long argued the need for a substantial increase. Any time large employers can make their argument for them, it puts a great deal of popular momentum at their backs. That coupled with some fairly high-profile “strikes” against the fast-food industry staged by unions and some of their worker center allies, it seems there is enough public support for them to successfully move the ball down the field.
Several high-profile labor initiatives are underway in 2014, including the previously-mentioned proposal to increase the federal minimum wage from $7.25 to $10.10 per hour. In addition, legislation has been introduced in dozens of states and cities to raise the minimum wage to even higher levels.
As they often do, Big Labor and its allies adroitly use the minimum wage issue to motivate sympathetic voters and increase voter turnout. It’s no wonder why proposed minimum wage increases are appearing on ballots in Alaska and Arkansas. Those states just happen to have two of the most contested Senate seats in the country and will likely determine which party controls the Senate in 2015-2016. That dynamic should not be ignored.
The bottom line is that the time is now, and the argument focused on kicking the can down the road until better economic times has run its course. The business community must determine what it will say about minimum wage and how it will say it.
Remarkably, at this point in the state legislative sessions, I would have thought more states would have passed wage increase legislation. Only in a few predictably blue and labor-friendly states like Connecticut, Maryland, West Virginia and a few others has legislation passed. Since those states seem to regularly be passing wage increases, this is not very big news.
What is newsworthy is how few of the more politically moderate or “purple” states have passed wage increase legislation. As of this writing, not one has done so. But the ballots in November referenced above could significantly alter that math.
REFRAMING THE DISCUSSION
Ironically, the inability of business to push off the debate any longer given the recovering economy may actually create an opening to reframe the discussion around the concept of opportunity. While polling data indicates that an overwhelming majority of Americans favor some type of increase in the federal minimum wage, the data also shows that above the $10-per-hour range, support begins to drop radically.
The Fight for 15 crowd advocating a $15 minimum wage in recent protests throughout the country is in for a lonely fight because there is almost no public support for a beginning wage that high. Most people reflexively realize that most part-time quick-service or convenience store jobs shouldn’t be worth $15 per hour on day one of employment.
What the public seems to recognize -- and the politicians seem to ignore -- is the opportunity quotient imbedded in these entry-level jobs. The dropoff in popular support once the minimum wage gets north of $10 indicates that many people understand that if starter wages climb too high, it will hinder the ability for Americans to enter the job market and move up.
The huge economic value of opportunity is typically absent in the myopic debate over minimum wage and other labor policy issues. Convenience store, restaurant and other service industry jobs are unique in that they not only offer a shot to anyone, but they also offer upward mobility to anyone with the right attitude, work ethic and desire to pursue it. Service jobs are open to all regardless of prior skills, experience or education and can provide a clear path to reach the middle class.
Opportunity is the platform that gives service businesses the best chance to change the national conversation around the value of jobs that may start at minimum wage, but quickly lead to higher wages and upward movement for those who choose to climb.
Opportunity is a concept that we should be eager to debate with adversaries who deliberately try to narrow the focus to just one aspect of the complex labor puzzle: the starting wage.
The time has come to stop using the economy as an excuse for opposing wage and other mandates and instead proudly educate lawmakers, media and the public about the critical importance of opportunity to America’s future. Without broader understanding of how the collective impact of well-intentioned but poorly conceived public policy will reduce opportunities, we can only expect more of the same.