California’s $15-an-hour win

CALIFORNIA GOV. Jerry Brown signed legislation in April that will raise the state minimum wage to $15 an hour by 2023.

This is an important advance for a national labor movement that has otherwise been facing routs, retreats and stalemates. But there are important qualifications and holes in the law that make this victory more mixed than it should be.

The legislation came about as a result of the actions of low-wage workers themselves. They are part of a national movement demanding $15 an hour and a union, which exposed not only poverty wages, but substandard working conditions faced by minimum-wage workers, particularly in the fast-food industry.

Through protests, strikes and days of action that gained the support of a growing number of people, low-wage workers have made their voices heard--and made the demand for a $15 minimum wage, something that might have seemed outrageous a few years earlier, part of the national discussion.

Some 2.2 million Californians, disproportionately women and people of color, work for the state minimum wage, currently set at $10 an hour. The new law will raise these workers' wages to $10.50 an hour on January 1, 2017, then to $11 an hour in 2018, $12 in 2019, and another dollar each year until 2022.

Businesses with 25 employees or less will enjoy a year delay before they have to follow suit, so that all minimum-wage workers in California may earn $15 an hour by 2023. Inflation-indexed minimum wage increases would follow after the floor is set at $15.

The leap from $10 to $15 an hour is large enough to affect categories of work beyond stereotypical low-wage sectors like retail, food service and agriculture. For example, some 600,000 of the 1.6 million Californians working in the strategically significant manufacturing sector currently earn less than $15 an hour.

Furthermore, raising the minimum wage this much is likely to have an upward impact on wages beyond the lowest reaches of the labor market. A study by the University of California, Berkeley, Center for Labor Research and Education estimated that the law could lead to a 24 percent income boost for 5.6 million Californians, one-third of the workforce.

The vast majority of credible studies on the subject suggest that minimum wage increases have a minimal impact on unemployment rates.

Even studies that predict small job losses, such as the 2014 Congressional Budget Office examination of the likely effects of a federal raise, show sufficient increased earnings to constitute an overall advance for low-wage workers.

Still, some naysayers, such as Ben Casselman of FiveThirtyEight.com, point out that such a large minimum wage increase has not yet been instituted across a territory as vast and diverse as California.

They argue that a $15 minimum makes sense in coastal metropolises like Los Angeles and San Francisco, but might hurt economies in poorer cities like Fresno and rural areas in the North and East.

Community leaders from poorer parts of California, such as Rev. Art Gramaje of Saint Anthony Mary Claret Catholic Church in southeast Fresno, don't seem to be worried about the economic effects of higher wages.

Gramaje told the Fresno Bee that any increase in the minimum wage "tremendously helps families in our area and other poorer areas."

DESPITE HIS left-liberal reputation--he's even been known to quote Chairman Mao--Gov. Brown is anything but a consistent friend of labor. Several years ago, he worked hard to cut state employees' pensions and increase the cost of their medical coverage.

And when unions put forward a statewide proposition in 2012 to raise income tax on California's millionaires, Brown forced through his own measure, which while still progressive, significantly pared back revenue for public education and other state programs.

Significantly, this shortfall is one reason why the University of California, Berkeley administration is now demanding 500 layoffs.

So why did Brown sign onto the new minimum wage?

Brown, a venerable California Democrat and son of Cold War-liberal Gov. Pat Brown, promotes a more moderate version of the kind of neoliberal austerity politics we have grown accustomed to from Democratic politicians such as President Barack Obama and Chicago Mayor Rahm Emanuel.

Brown was fortunate enough to take office in January 2011, after the worst of the Great Recession had already ravaged public spending under the bizarre stewardship of Gov. Arnold Schwarzenegger. Today, Brown presents himself as a responsible, adult-in-the-room-type pragmatist who accepts neoliberal reality but nevertheless seeks to temper its effects on the poor, students and the working class.

So he sounded strangely ambivalent at the April 4 signing ceremony in Los Angeles, surrounded by unionists and Democratic Party legislators. "Economically, minimum wages may not make sense," Brown said, "but morally, and socially and politically, they make every sense."

Brown had, in fact, resisted such a raise for months prior, during which his Department of Finance argued that even a lesser increase to $13 an hour would be economically harmful.

But the governor eventually agreed to a deal with labor and legislative leaders in order to neutralize the threat of two competing labor-backed ballot initiatives that sought to raise wages at a slightly faster pace.

Brown sought to claim the issue as his own with a philosophizing sermon after the signing. "Work is part of living in a moral community," Brown said, "and a worker is worthy of his or her hire, and to be worthy means they can support a family."

Never mind that $15 an hour is not really all that close to a living wage in California.

The Massachusetts Institute of Technology estimates that a single parent with one child, working full-time, needs at least $22 an hour to live in Fresno, $25 in Los Angeles, and $29 in San Francisco.

Yet a $15-an-hour minimum wage seemed nearly impossible only a few years ago and advocates for the demand have breathed some fresh life into the labor movement.

Brown's leadership style in this instance is expressive of what makes the Democratic Party so robust and such a formidable obstacle to those who aim to forge independent working-class politics.

In its California form, the Democratic Party isn't easily dismissed as a business-minded party of austerity; for example, in addition to the new minimum wage, Brown just signed a paid parental leave law.

And California unions' relative clout inside the party provides for what appears to be, at least at times, a close working relationship between the governor and labor.

As California Labor Federation Executive Secretary-Treasurer Art Pulaski stated at the bill-signing ceremony,

This historic signing is testament to the power working people hold when we stand together to fight for justice...The wave of higher wages that starts here today will cascade to other states, bringing with it fresh hope to millions of working people across this country.

RAISING THE minimum wage of the most populous state in the country will positively affect working and living conditions for millions of people struggling to survive in the nether regions of the economy. And in a display of election-year messaging, similar legislation was signed the same day in the state of New York by Democratic Gov. Andrew Cuomo.

But is this victory in the fight for $15 unqualified? How favorable was the deal made with Gov. Brown?

First, 2023 is six years from now, and, due to inflation, the $15 projected minimum wage will be worth significantly less than $14 in today's purchasing power. And the deal with Brown included a poison pill in the form of gubernatorial power to pause any scheduled annual wage increases in the event of certain recessionary economic conditions--a typical "deficit hawk" demand from Brown.

If sales tax revenue for the past year is down from the year before or if job growth is negative for the previous three to six months, the governor could halt scheduled wage increases. The governor could also stop scheduled raises if the state has a projected budget deficit of more than 1 percent of general fund revenue in the current fiscal year or either of the next two.

So the new law may not have even have secured a nominal $15-an-hour minimum wage six years from now.

Second, it's not at all clear that the deal made with the governor was a good one for the labor movement.

Unions conserved resources by dealing with Brown and avoiding a costly ballot fight in November and they gained the legitimating effects of the governor exercising his ideological powers in favor of the $15 demand. But they gave up on two separate ballot initiatives, either of which would have raised the minimum wage to $15 faster, by 2021.

And while getting either initiative to pass at the ballot box would have been costly, they would have presented a valuable mobilizing and organizational capacity-building opportunity.

Statewide polling and the experience of successful campaigns to gradually raise the municipal minimum wage to $15 an hour in Los Angeles and San Francisco suggest that the labor-backed ballot initiatives could have succeeded.

Some evidence suggests that even majorities of business executives support raising minimum wages. A survey of 1,000 business executives conducted by Republican pollster Frank Luntz and obtained by the Center for Media and Democracy found that 80 percent of respondents supported raising their state minimum wage.

The survey suggested that the minority most opposed to minimum wage hikes, like restauranteurs and retailers, drive business groups' policies on the matter, creating the misleading appearance that they all stand in monolithic opposition.

So it is arguable that even the independent ballot initiatives that labor leaders dropped in favor of compromise with the governor were too conservative, and a more immediate raise could have been fought for.

Furthermore, the deal with Brown burnished the governor's credentials even as he has worked to undermine public-sector pensions and negotiate contracts with state labor unions that compel them to pay more into retiree health care.

Nevertheless, the successes in the fight for a $15 minimum wage, whatever their limitations, offer a rare opportunity for building momentum for the struggles to come—including those that will go head to head with Brown.