POLITICS - Minimum Wage

"Minimum Wage Rises, Sky Does Not Fall" by Barbara Ehrenreich, AlterNet 1/23/2007

Washington (State), with the highest minimum wage in the country ($7.63 an hour), could hardly be expected to have affordable restaurants or a functioning economy of any kind. Notable conservative economists have almost unanimously predicted that an increased minimum wage would result in wild price increases and mass unemployment, and I had a suitcase full of clippings to prove it.

So imagine my surprise when I arrived, ham-less, in Seattle to find it fully functional, if not positively bustling. Restaurants were packed, and I could still get a grilled salmon sandwich for $7.95 at a cafeteria-style place overlooking the sound. My hotel was amply staffed with congenial people and - perhaps only because of the un-Seattle-like cold, no beggars approached me on the streets. Nor can you say the dire effects of a higher minimum wage just haven't had time to set in: Washington raised its minimum wage above the federal level of $5.15 an hour about a decade ago.

In fact, according to a January 9th article New York Times, Washington's economy is booming, generating 90,000 new jobs in the last year. Even business groups have stopped griping about the state's minimum wage. The article quotes a pizza store owner in the western part of the state: ''We're paying the highest wage we've ever had to pay, and our business is still up more than 11 percent over last year.''

Overall, 29 states have raised their minimum wages above $5.15 an hour, and -- lo! -- the sky has not fallen. Could we have some apologies, please, from the economists who predicted a retail apocalypse?

Not that a $7 or even $8 minimum wage is utopian. My book Nickel and Dimed is often wrongly described as an account of my attempts to live on the minimum wage. Far from it; I averaged $7 an hour, which, according to the federal government, is well above the poverty level for a family of one. But I couldn't get by on that, thanks to the high rents even in trailer parks and residential motels, and I never went near pricey housing markets like San Francisco or Seattle. In the Seattle area, a "living wage" (calculated to reflect local housing and other basic costs) is $11.89 an hour for a single person and $25.35 for a family of three - more than three times the current minimum wage.