Continuing in our ride through the fact-filled world on the Wayback machine, we find ourselves ten years later, after the disastrous I-518 raised the minimum wage by almost 100% over two years.  We remember, the tumbleweeds blowing across Bellevue Square, the rotting structures at the empty Seattle Center, the frozen hungry children begging for a meal after their parents were fired from their jobs.  It’s like it  …. never happened.

In 1998, voters were presented with the second minimum wage initiative in ten years, I-688.  The first one, I-518 in 1988, raised the MW almost 100% over 24 months, eliminated the tip credit, extended the MW to agricultural jobs, and established a youth wage for those under 16.  It also extended the MW to those in domestic service (nannies, maids, drivers, gardeners, etc.)

I-688 proposed to increase the minimum wage from $4.90 as of 1/1/98, to $5.70 on 1/1/99, and to $6.50 effective 1/1/00, of increase of about 32.6% (if my math is correct) in equal annual steps over two years.  The second most important piece was indexing the minimum wage to inflation beginning in 2001, so frequent initiatives to raise the MW would not be necessary.  The state could, by rule, establish a lower minimum wage for workers under age 18, the so-called ‘teenagers.’

The 1998 Voter’s Pamphlet contains the following statement against I-688 (remember the Secretary of State cannot edit these statements, so numerous outright lies are contained within the statement. I have kept the bold in the original):

“STATEMENT AGAINST I-688

A 32% increase in the state minimum wage now and unlimited increases in the future will have a direct impact on the family budget of every Washington citizen. When wages are artificially forced up, all other costs go up as well. The price of groceries, gasoline, rent and other goods and services will increase. This will hurt working families and those on fixed incomes, especially senior citizens.

Government mandates for automatic wage hikes and price increases should not be allowed without future voter approval.  Provisions of I-688 could have a devastating impact on communities especially outside Seattle.  The inflation index is based on urban statistics and does not take into consideration the special needs of smaller and rural communities.  What might work in Seattle is not always good in Colfax, Wenatchee or Aberdeen.

Ninety-two percent (92%) of Washington businesses already pay more than the minimum wage. The minimum wages really is starting wage not intended to be a living wage. More than 80% of those still making the minimum wage are teenagers or people living within a family with more than $30,000 per year in income.

Big government should not try to fix every economic worry. The marketplace has proven to be a much better regulator of the economy than the government. To help small businesses continue to offer good opportunities for young people and to keep prices from rising out of control, vote no on I-688.

REBUTTAL TO STATEMENT FOR:

The minimum wage is a starting wage and not intended to support a family. Most people who  earn it our teenagers or part-time workers. Starting wage jobs take people off welfare.

An increased minimum-wage low-cost families because prices of everyday goods and services will rise, not reduce taxes for working families.

I-688 takes away federal wage protections far entry workers and small businesses. Vote no on I-688.

Voters pamphlet statement prepared by:

CAROLINE LOGUE, National Federation of Independent Business; GARY SMITH, Independent Business Association; RUSS GOODMAN, Washington restaurant Association

Advisory committee: JAN TEAGUE, Washington Restaurant Association; STEVE APPEL, Washington Farm Bureau, DAN BRUNELL, Association of Washington Business, CINDY MINDT, Washington State Hotel and Motel Association.”

 

Well, there you have it.  I-688 passed 66% yes, 33% no, a two-thirds yes vote.  Not as high as the earlier vote to repeal the tip credit, but still astronomical for the time period.  One year later, Tim Eyman’s initiative to repeal car tab fee would be passed by voters, too.

Prices raising out of control?  We have enjoyed the lowest inflation since the end of World War II during the period after I-688.  Teenagers working on the minimum wage?  That stinker was debunked years ago.  A recent report for the City of Seattle also updates and further debunks that statistic for the Seattle area.  Government mandated price rises out of control?  Nope.  Prices in Seattle are noticeably lower than many other comparable parts of the country, for everything from fresh produce, groceries, cars, even homes.  Particularly in the fine dining and drinks sectors, Seattle has very low prices, despite the apocalyptic hyperbole we are hearing.

What should be noticeable is the arguments in the 1998 Voter’s Pamphlet are exactly the same as those proposed by opponents of Seattle’s current efforts to increase the minimum wage.  And, they are exactly the same as the arguments recorded in the 1988 Voter’s Pamphlet against I-518.  And, they are exactly the same as the arguments used in the 1930’s to oppose the first laws establishing a federal minimum wage, and against early state efforts to establish minimum wages.  Exact, word-for-word identical arguments over a period of almost one hundred years.  What gives?

In  the next part we will provide some inside baseball about why a small group of neocon restaurant owners is fighting so hard against the current effort.

Your homework is to enjoy a meal at Lost Lake, the 5 Point, Tom Douglas’ Serious Pie, St. Clouds, or Terra Plata, and ask yourself why are these restaurants, all of which pay well above minimum wage, are able to serve such excellent meals at reasonable prices, despite the anti-restaurant environment?  Post your findings in the comments.

 

In what has become an increasingly fact-free argument, I thought it might be time to take the Way-back Machine (very timely considering the Sherman film is in theaters right now) and find out more about Washington’s minimum wage.  How did Washington end up with the country’s highest minimum wage?  How come we still have restaurants opening every day, when clearly, its impossible?

Washington stepped off the national minimum wage ladder for the first time in 1988, with the enactment of Initiative 518.  I-518 proposed to raise the then minimum wage from $2.30 to $3.85 effective 1/1/89, and then going straight to $4.25 effective 1/1/90.  It removed the exception for tipped labor, and agricultural labor.  The minimum wage, as proposed, would apply to all workers across the board, with a limited exception for workers below the age of 16.  The statement against I-518 from the 1988 Washington State Voter’s Pamphlet follows:

Statement against I-518

Will HURT THE WORKING POOR

Initiative 518 will reduce jobs, increase inflation and hurt the working poor. Employers recognize that it is almost impossible to keep full-time employees by paying the state or federal minimum wage (even farm workers in Washington average almost $5 per hour). But a reasonable minimum wage does permit employers to provide entry-level and part-time supplemental income jobs which would otherwise be reduced. This year the employer community supported a 40% increase in the state minimum wage but the bill died in the legislative debate.

When the minimum wage is increased, impacted employers reduce working hours, increase mechanization, and reduce service to control costs. They also pass the cost of any wage increase to consumers in the form of inflation.

Tips are considered wages by state and federal law, but this initiative ignores that fact and, as a consequence, employers of tipped workers will be unfairly penalized millions of dollars resulting in higher menu prices and loss of employment opportunities for unskilled job applicants.

MEANS FEWER PART-TIME JOB OPPORTUNITIES

Supporters of the initiative argue that an increase above the federal minimum wage will help heads of larger households. But an initiative which outlaws any job that doesn’t pay enough to support a family of three, does a great disservice to the vast majority of minimum wage earners who are single, work part-time, and live in households which earn significantly above the poverty income level. For these families the increase means fewer part-time jobs and entry-level positions.

We can target programs to help the poor without reducing job opportunities for everyone else.

VOTE “NO” ON 518

Rebuttal of for
Economists don’t agree with initiative supporters. As the New York Times acknowledged, “there’s a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market.”

For example, seasonal agricultural workers are impacted by Initiative 518. Those unable to produce at a production rate equal to the minimum wage won’t be allowed to work.

For more information, call 1-800-521-9325.

Voters Pamphlet Statement Prepared by:

CLIFTON FINCH, Association of Washington Business; ROBERT SEEBER, Restaurant Association of Washington; LINDA MATSON, National Federation of Independent Business.

Advisory Committee: GARY SMITH, Independent Business Association; BILL Washington State Farm Bureau.

 

The initiative passed 76.55% yes, 23.45% no.  The result was predictable.  Bands of hoodlums roamed the land, raping and pillaging as they stole food and goods from the now abandoned restaurants and small businesses.  Nearly all business in Washington came to a halt, as hundreds of thousands of small businesses and entrepreneurs left the state for the freedom of Texas, Alabama, and South Carolina.  Children went hungry, and families were forced to rely on their own resources, growing food in tiny plots guarded by armed vigilantes.

What? No? Really?!

Do the arguments in the voter’s pamphlet sound familiar?  They should: they are the same arguments repeated today by members of the WRA and the NFIB.  I-518 raised the minimum wage from $2.30 to $4.25 over 24 months, an increase of almost 100%.  The result was unprecedented economic prosperity in Washington, making it one of the most desirable places to live, work, and start a business.  Incomes were high and taxes were low.  Small businesses, and restaurants in particular, prospered as never before with much more money sloshing around in the economy.  Every economic indicator took off.   But that is not the end of the story.  Coming soon, I-688!