The case for a $15 minimum wage

 February 4, 2019 by Fred Allebach

The cost of living in Sonoma County has risen dramatically in the last 10 years and wages have not kept pace, including the mid-range category.

What are mid-range jobs? Jobs that pay around the area median income (AMI), which is $68,000 for a family of two, and $81,000 for a family of four. These jobs run the gamut from minimum wage to “moderate” income, or 120% AMI.

What we have is an “hourglass economy,” with the middle hollowed out, and the base and top overly represented. The old middle class has disappeared, and for the new middle class, income is not enough to keep up with the cost of living. To have what would be considered a comfortable, middle class quality of life, earnings need to be 120% AMI and above. Those below that are burdened by costs they can’t afford, especially those who make minimum wage.

Mid-level earnings lost in the hourglass economy end up costing society more, in the form of increased health care costs, welfare, lower educational outcomes, and higher crime rates. In sustainability studies, it is demonstrated that upstream investment reduces systemic costs and impacts.

This is why raising the minimum wage to $15 by 2020, and then higher later, is important.

Minimum wage workers serve Sonoma’s wine-tourism-hospitality economy, our largest sector. These workers live in the Springs or commute from regional lower-rent areas. For these workers, life is paycheck to paycheck, long hours, two jobs, two parents working. Debt is up, in many cases more time is spent commuting, with consequent transportation greenhouse gas impacts.

It is clear that workers in Sonoma need help. Raising the minimum wage ASAP is an obvious solution to a progressive loss of earnings and quality of life. Business interests have gotten all kinds of assists from local government: the city pays $500,000 a year to the Visitor’s Bureau, $500,000 a year goes to the Chamber, and the city-authorized Tourism Improvement District now pulls in about $750,000 a year.

It is fair and right that workers get an ongoing assist, too.

The $15-per-hour base will put $3,000 more a year in the pockets of low-wage earners. That’s more to spend, to stimulate the economy, and to ripple up to other wages. $15 will make housing more affordable. Affordable housing, in turn, increases all other quality of life indicators,

California has in place a raise to $15 in minimum wage by 2023. What is proposed now is $15 by 2020 in many cities simultaneously in the North Bay region. In the last election, a critical number of county candidates won who support social and environmental justice issues. Now is a good time to ask for their support on an expedited $15 city-wide minimum wage ordinance.

Why $15 and not more? The plan is to bring up the wage floor regionally, and catch the most people in a wide net for a greater effect. This incremental, bottom-up approach is politically feasible. Politics is the art of the possible, not the impossible.

What is minimally necessary, but too heavy a lift to do regionally right now, is $23 an hour. In fact, $23 is a conservative number – $28 is more like it, to give labor more quality-of-life breathing room.

A fully regional, county-wide $15 minimum wage should also include farmworkers. But these larger goals have to be worked up to, starting with $15 in a number of cities. Then the fight for $15 regionally will lead to the fight for $18, and become the route to $23, and so on, until the minimum wage is a true living wage.

Some city councils may have the votes and will to make a higher mandatory minimum wage, say $17 or above. What could happen here, as a result of a non-unified regional front, is that businesses might move to areas with a lower wage. This won’t be likely if many cities in the region raise the minimum at once.

It’s possible that if the wage floor is raised, landlords will just increase rents, in a cat and mouse game that will eat up all the gains made by workers. Trickle-down has been illusory; ripple-up may be too.

People need basic resources to live, not a constant erosion of their quality of life. It’s time to step up and give an assist to workers. It’s the right thing to do. Upstream investment is smart. The system will have to adjust, as it is not morally right for workers to suffer so many cost burdens in one of the wealthiest areas of the country.