Mayors Want Federal Minimum Wage Hike
by Sheryl Jean
June 23, 2014
Source: Dallas Morning News
Mike Rawlings oversaw many minimum-wage workers as top executive at Pizza Hut.
Now, as the mayor of Dallas, he’s trying to determine what a living wage is for city residents and city contract workers.
The minimum wage debate has taken center stage as leaders of cities big and small across the country look for ways to help fix growing income inequality.
“The biggest problem in America … is income disparity, and we see it in Dallas,” Rawlings said. He and other mayors have suffered state and federal budget cuts, watched residents’ household incomes decline or flatten and seen many new jobs concentrated in low-paying fields.
As a proposal to raise the federal minimum wage from $7.25 to $10.10 an hour languishes in Congress, cities and states are taking matters into their own hands, creating a patchwork of minimum-wage rates across the country.
At the U.S. Conference of Mayors meeting in Dallas on Monday, a majority of mayors voted to adopt a resolution to raise the federal minimum wage, sending a message to congressional leaders about how serious the issue is.
Voting has not concluded, and Rawlings said that he was going to vote for the resolution.
“It’s healthier for our economy, neighborhoods and businesses to have a living wage,” he said. “The economy has been stagnant because the lower end doesn’t have disposable income to spend.”
America has more than 47 million people classified as the working poor, partly due to wage erosion, according to the National Employment Law Project. The real value of the federal minimum wage has fallen nearly 30 percent in the last 40 years.
“No one who works full time in America should have to raise their families in poverty,” David Weil, administrator of the U.S. Department of Labor’s wage division, said at the U.S. Conference of Mayors. A full-time, minimum wage worker earns about $15,000 a year, which is 17 percent below the federal poverty level, he said.
The last minimum wage increase was under President George W. Bush, who increased it from $5.15 to $7.25 an hour from 2007 to 2009.
Advocates say a higher wage would put more money in consumers’ pockets, helping businesses and the economy. Critics say it would force business owners to choose between laying off workers, cutting hours and raising prices.
Rawlings thinks the impact wouldn’t be as big as some fear. “I do not believe that good businesses lay off people because of the minimum wage,” he said. “They must be more efficient and squeeze other things, reduce hours.”
Twenty-two states and Washington, D.C., have minimum wages higher than the federal minimum. Some cities, including Chicago, Oklahoma City and Seattle, have pushed to raise their minimum wages.
Dallas follows the federal minimum wage, but city workers make $10.62 an hour and county workers make $10.25.
Texas also follows the federal minimum, and Gov. Rick Perry has said that he is against government setting a minimum wage.
Bob McTeer, distinguished fellow at the Dallas-based National Center for Policy Analysis and former president of the Federal Reserve Bank of Dallas, says that in general, he’s against raising the federal minimum wage because it dampens hiring and results in higher prices for everyone.
“If you’re really worried about income inequality in the economy, it’s conceivable to raise the minimum wage and then try to deal with the unintended consequences separately,” he said.
On the edge of Silicon Valley, San Mateo, Calif., has a hard time finding workers, Mayor Robert Ross said. His city sees such a demand for workers that businesses have to raise wages to attract workers, he said.
Just this week, national retailer Gap Inc. will raise its hourly minimum wage for all employees to $9 and up to $10 in a year. The San Francisco-based company said its decision will affect about 65,000 workers.
“At the heart of it all is that working must pay off,” the Department of Labor’s Weil said. “People all over the country are asking themselves: Do I buy a gallon of milk or a gallon of gas?”