“Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge.'” — Isaac Asimov
Workers protest for the the Los Angeles City Council to vote to raise the minimum wage on May 19, 2015. | AP Photo
The Democratic National Committee unveiled a draft of its party platform Friday, calling for —among other progressive causes — a $15 minimum wage, free community college and abolition of the death penalty.
The draft was approved last weekend in St. Louis by 13 of the 15 members on the drafting committee, with one abstention and one who missed the vote.
Supporters of Bernie Sanders have expressed displeasure with the way the platform draft handles Medicare expansion, a carbon tax, a fracking ban and the Trans-Pacific Partnership. Sanders policy director Warren Gunnels told POLITICO that the trade deal is “the most significant issue for us.”
In this week’s episode of BITE, we discuss tipping’s racist origins and uncertain future.
Sean Locke Photography/Shutterstock
Is this the end of tipping?
When Danny Meyer, owner of revered eateries like Gramercy Tavern and The Modern in New York, announced last year he’d abolish the practice at his businesses, he helped spark a national conversation about whether paying a gratuity at a restaurant still makes sense. Along with severalotherrenowned chefs, Meyer has revealed the ugly truth about the practice, which until recently was rarely talked about: That tips create a disparity between different employees, they are fairly unregulated and easy to exploit, they are inconsistent and leave servers at the whim of customers rather than the employer.
In this week’s episode of Bite, author and labor organizer Saru Jayaraman tells to us more about tipping’s disturbing origins. Jayaraman isn’t against gratuities, per se, but she feels strongly that the “tipped minimum wage”—the lower wage that restaurant workers take home in all but nine states—has got to go. This lower wage hasn’t increased since the early ’90s—the nineties—and it forces a staggering number of the nation’s 11 million restaurant workers to rely on food stamps.
As states like California and cities like Seattle boost their minimum wages up to $15 an hour, critics warn that job losses will be inevitable. In particular, one major line of criticism from outlets like the Wall Street Journal editorial page and Forbes’s Tim Worstall is that big increases in pay floors only lead to job loss via automation. Both critics point to initiatives at McDonald’s and Wendy’s to automate more of the service process, and warn that robots, rather than workers, will be the real winners if liberals succeed in boosting minimum pay.
This is doubly wrong. On the one hand, there’s little guarantee that increased minimum wages really will increase the pace at which labor-saving technology is developed. On the other hand, there’s no reason to think this would be a bad scenario. California’s minimum wage hike pushes the issue beyond the terrain in which it’s been studied.
If minimum wage hikes really do spur the creation and adoption of high-quality new equipment to automate elements of, say, the food service industry, then that would be a very positive outcome that implies minimum wage hikes are a great idea. Productivity-enhancing technology, after all, is a crucial pillar of social and economic progress. The problem in recent years is that we haven’t had nearly enough of it.
Given that, a huge increase in automation is really the optimistic outcome. The thing to worry about is that this won’t happen, not that it will.
California Gov. Jerry Brown. Photo by Kimberly White/Getty Images for Fortune
The “Fight for 15” movement got its biggest win yet on Thursday as the California legislature passed a bill to phase in a statewide $15-per-hour minimum wage over the next six years. Gov. Jerry Brown is expected to sign the legislation.
There’s a lively debate among economists about the economic impact of minimum wage hikes. Higher minimum wages provide raises to some workers, but some economists argue that they also prompt substantial job losses. Other economists dispute this, saying there’s little or no effect on employment and that businesses compensate for higher costs through reduced turnover, improved productivity at work, lower compensation for better-paid workers, and price increases.
So who is right? When I set out to interview economists about the effects of California’s minimum wage hike, I was expecting some strong disagreements. Instead, I found a broad consensus: California’s hike is so large — and would result in a minimum wage so high — that no one really knows what will happen. None of the three economists I interviewed was willing to make a prediction about how the new law would affect employment in California.
“It would be foolhardy to believe you could project what’s going to happen with any degree of confidence,” said Jeff Clemens, an economist at the University of California San Diego whose research has found that higher minimum wages have caused job losses in the past. That sentiment was echoed by Arindrajit Dube, whose research has suggested that minimum wage hikes do not cause significant job losses.
Of course, that in itself is a reason to be concerned, since California lawmakers are taking a risk with the livelihood of millions of low-wage California workers. But advocates of the California proposal argue that it’s a risk worth taking.
The economic impacts of minimum wage hikes is hotly debated
At a rally outside Los Angeles City Hall, workers press their demand for a minimum wage of $15 per hour. (Luis Sinco / Los Angeles Times)
Lawmakers and labor unions have struck a tentative deal to raise the statewide minimum wage to $10.50 an hour next year and then gradually to $15, averting a costly political campaign this fall and possibly putting California at the forefront of a national movement.
The deal was confirmed Saturday afternoon by sources close to the negotiations who would speak only on condition of anonymity until Gov. Jerry Brown makes a formal announcement as early as Monday.
The minimum wage compromise ends a long debate between the Democratic governor and some of the state’s most powerful labor unions. For Brown, it’s political pragmatism; numerous statewide polls have suggested voters would approve a minimum wage proposal — perhaps even a more sweeping version — if given the chance.
According to a document obtained by The Times, the negotiated deal would boost California’s statewide minimum wage from $10 an hour to $10.50 on Jan. 1, 2017, with a 50-cent increase in 2018 and then $1-per-year increases through 2022. Businesses with fewer than 25 employees would have an extra year to comply, delaying their workers receiving a $15 hourly wage until 2023.
Income inequality is a complicated issue. The U.S. is the richest and yet most unequal country in the world when you consider wealth, according to Allianz. And yet, there is economic mobility; many Americans shift income brackets, with 70% of the population experiencing at least one year in the top 20th percentile of income and 53% landing in the top 10th percentile in at least one year.
And billionaires are no exception. Entrepreneur and investor Nick Hanauer, who sold his Internet advertising company to Microsoft for $6 billion in 2007, most famously warned fellow one-percenters, “If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality.” But he has plenty of company. Some are concerned on moral grounds; others cite the impact on the economy. Here are seven other billionaires who say they are worried about how income inequality will affect America.
Hillary Clinton hinted Thursday that she’s supportive of legislation hiking the minimum wage to $12.
Clinton, the front-runner in the Democratic presidential primary, has backed the concept of a wage hike on the campaign trail without specifying a figure — a reticence that’s been criticized by her closest rival, Sen. Bernie Sanders (I-Vt.), who’s pushing for a $15 rate.
But on Thursday, after meeting with leaders of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), Clinton got as close as she’s come to endorsing a specific level, hinting that a $12 minimum wage proposal sponsored by Sen. Patty Murray (D-Wash.) and Rep. Bobby Scott (D-Va.) might offer a viable path forward.
“Patty Murray is one of the most effective legislators in the Senate bar none, and whatever she advocates I pay a lot of attention to because she knows how to get it through the Congress,” Clinton told reporters. “Let’s not just do it for the sake of having a higher number out there, but let’s actually get behind a proposal that has a chance of succeeding. And I have seen Patty over the years be able to do just that.”
Earlier in the press conference, Clinton advocated an unspecified increase in the federal minimum wage — which has stood at $7.25 per hour since 2009 — and then allowing states and local governments to make adjustments as they see fit based on regional cost-of-living variations.