NPI's Cascadia Advocate

Offering commentary and analysis from Washington, Oregon, and Idaho, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, September 30th, 2011

Washington’s minimum wage to rise to $9.04 an hour beginning in January

Wash­ing­ton State’s min­i­mum wage will rise thir­ty-sev­en cents an hour to $9.04 begin­ning in Jan­u­ary, the Depart­ment of Labor & Indus­tries announced today.

Ini­tia­tive 688, which vot­ers over­whelm­ing­ly passed in 1998, requires the Depart­ment of Labor & Indus­tries to adjust the min­i­mum wage annu­al­ly to account for infla­tion. (I‑688, which NPI’s Steve Zemke was involved with, remains one of the most pop­u­lar ini­tia­tives in state history).

In a news release, L&I explained how it cal­cu­lat­ed the new min­i­mum wage:

The 37-cent increase reflects a 4.258 per­cent increase in the Con­sumer Price Index for Urban Wage Earn­ers and Cler­i­cal Work­ers (CPI­W) since August 2010.

The CPI‑W, which is used in this cal­cu­la­tion, is a mea­sure of the aver­age change in prices over time of goods and ser­vices pur­chased by urban wage earn­ers and cler­i­cal work­ers. Goods and ser­vices are deter­mined as those things peo­ple buy for day-to-day liv­ing such as food, cloth­ing, shel­ter, and fuels, and ser­vices such as doc­tor visits.

Accord­ing to the Bureau of Labor Sta­tis­tics’ news release, over the last 12 months the prices of most cat­e­gories of con­sumer goods rose. The largest cost increas­es occurred for fuels and the low­est cost increas­es were for edu­ca­tion and com­mu­ni­ca­tion services.

Ore­gon is also set to raise its min­i­mum wage in 2012, to $8.80 an hour, as required by Mea­sure 25, passed by vot­ers in 2002. (Mea­sure 25 is Ore­gon’s equiv­a­lent of Ini­tia­tive 688). Since the mid-2000s, Wash­ing­ton and Ore­gon have con­sis­tent­ly main­tained the high­est min­i­mum wages in the country.

Econ­o­mists regard the min­i­mum wage as one of the best exam­ples of a price floor — a legal min­i­mum price imposed on a mar­ket by government.

Although price floors (and price ceil­ings) do not always make sense, the min­i­mum wage does because it pre­vents wage abuse. We, as a soci­ety, have an inter­est in pre­vent­ing pri­vate busi­ness­es from engag­ing in an unchecked race to the bot­tom. Our col­lec­tive eco­nom­ic secu­ri­ty is not well-served when busi­ness­es treat their work­ers like inden­tured servants.

As the late Paul Well­stone once said, We all do bet­ter when we all do bet­ter.

While mar­kets are effi­cient and use­ful in many respects, they do not guar­an­tee that peo­ple will be fed, clothed, or shel­tered. The mar­ket does­n’t care about the well-being of a starv­ing, home­less work­er who can’t find a job, the aspir­ing stu­dent who can’t afford a col­lege edu­ca­tion, the fam­i­ly that can­not pay its bills while also tak­ing care of sick rel­a­tives. But we as a soci­ety ought to care. And that is why gov­ern­ment reg­u­la­tion of mar­kets is essential.

Left to their own devices, mar­kets can fall apart or fail… cat­a­stroph­i­cal­ly. That’s because mar­kets are human inven­tions — they can only self-reg­u­late to a cer­tain extent. Mar­kets are fair­er and more sta­ble when they are prop­er­ly reg­u­lat­ed and policed by government.

Win­ston Churchill once said, “Democ­ra­cy is the worst form of gov­ern­ment, except for all those oth­er forms that have been tried from time to time.” He could have said the same thing about mixed-mar­ket economies.

We need only look at his­to­ry to see why safe­guards like the min­i­mum wage are nec­es­sary. We at NPI are proud that Wash­ing­ton has the high­est min­i­mum wage in the Unit­ed States, and we look for­ward to see­ing work­ing men and women who make min­i­mum wage get a raise begin­ning on Jan­u­ary 1st, 2012.

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2 Comments

  1. Final­ly, some good news for work­ing men and women!

    # by Krystal Congrove :: October 9th, 2011 at 5:58 PM
  2. The Wash­ing­ton Restau­rant Asso­ci­a­tion may not like the idea that their mem­bers do not have the legal right to pay slave wages, but the truth is, even the min­i­mum wage is not a liv­ing wage. You can’t raise a fam­i­ly on a min­i­mum wage job or even two min­i­mum wage jobs.

    # by Kenny Labrune :: October 18th, 2011 at 7:31 PM