Jen Kern on PERI's Living Wage Research and the Grassroots Movement

March 2008

In this interview, Jen Kern, Director of ACORN's Living Wage Resource Center, speaks with PERI's Communications Director Debbie Zeidenberg about the state of the living and minimum wage movement today and the impact of PERI's research on organizers and activists in the field.

1. As A Measure of Fairness points out, the recently scheduled increase in the federal minimum wage-to $7.25 by mid-2009-will put us only 4% above the real value of the minimum wage in 1997. As such, rather than alleviate the pressures which brought about the living wage movement, a raise of so little, so late, will only serve to highlight the importance of the movement. Do you agree with this? What responses to the federal wage hike have you seen reverberating in the activist community?

Well, in reality our campaign opportunities are determined less by the actual economic truths than by the political atmosphere in which we organize. So, while wage organizers all know that the recent increase was, as you say, “too little too late,” we have to make decisions about where to focus our resources that reflect the often limiting political realities. The effect of the recent federal increase – coming even as it did after more than a decade of inaction – was to severely curtail the number of state minimum wage campaigns that organizers would consider viable this year. We are in fact focusing state minimum wage efforts in 2008 on states where the federal increase had no effect (because their state minimum wage was already higher than what the federal wage will be when it is fully phased in to $7.25 in 2009) or states that had mandated legislative study commissions to consider a state increase and or indexing [linking the minimum wage to an economic indicator, usually CPI inflation] this year.

However, wage activists are not in any way giving in to the notion that $7.25 by 2009 is enough. First, we are coalescing behind Senator Kennedy’s new proposal to raise the federal minimum wage to $9.50 by 2011 and then add indexing. In addition – still unwilling to wait for Congressional action - we will continue to identify states where it makes sense to propose increases of that magnitude or greater . 2009 and 2010 will likely see more state minimum wage activity than this year.

2. As the book states, "From 1968 when the minimum wage was at its peak [in real value] until today, productivity in the U.S. economy has gone up quite substantially--by roughly 110 percent between 1968 and 2005." The policy implication is that wage floors should be tied not just to inflation, but to productivity. Is this something that activists have pursued anywhere, and with any success? What are the barriers to including this critical factor in debates?

I love pulling out this line in debates – because it is so righteous and because it touches on the broader story of the loss of workers’ bargaining power over the last several decades – but it hasn’t been used to craft any actual proposals that I know of. The barrier to pushing for a productivity-based living wage is simply viability. Sadly, workers have lost so much ground – and worker organizations so much power – that this mere fact and the numbers it implies seem radical. A terrible consequence of allowing our wage standards to erode so significantly is that reasonable – and historically verifiable – increases for redress appear out of line. For evidence of this, just look at what we had to give away to get the most recent (arguable paltry) federal increase: billions in tax breaks for businesses who don’t need them!

3. How has the evidence that PERI has collected on the economic impact of minimum and living wage laws changed debates within campaigns on the ground? Do you see different discussions today than you did five or ten years ago? To what extent have PERI's findings been incorporated in the public discourse?

We are now able to say with confidence that the modest increases we are proposing will not – and in fact do not – lead to the dramatic negative economic consequences that opponents always predict. We can point to specific, unrefuted economic evidence from actual cities that have enacted such laws (for example, PERI’s study on the Boston, Hartford and New Haven living wage laws) in our retorts to the generalized claims of opponents. In addition to debunking the age-old claims of job loss, tax increases and price hikes, we can now even point to some positive effects that these laws have had, thanks to the research of PERI and others. Specifically, these laws have led to workers being lifted out of poverty, governments saving money on income supports and other social programs, more contractors bidding on a city contract, and more.

We have seen the opposition try to adjust to these findings by shifting their arguments. For example, in the last five years, chambers of commerce and industry trade associations have claimed that, rather than being “job killers,” living wage laws are an “inefficient” way to lift people out of poverty, arguing that such policies should be rejected in favor of improving workers’ access to the Earned Income Tax Credit.

In other cases, they have abandoned a discussion of economic policy altogether, instead making baseless claims that proposed living wage or minimum wage laws will compromise individual privacy or raise constitutional objections. The rise of such arguments is certainly testimony to opponents’ increasingly weak position in the economic debate on this issue.

4. Are there new questions you see arising in the public arena that have yet to be answered? What can PERI do next to provide analysis that informs the debate?

Because the number of active living wage campaigns has decreased significantly in the last couple years, there is certainly less clamoring from organizers for local living wage impact studies than there was in the past. However, I am receiving some calls from academics and elected officials interested in questions of living wage implementation and impact. There is certainly lots left to study; out of approximately 150 local laws, fewer than a dozen have been the subject of retrospective impact studies.

There are also opportunities for research on state and local minimum wage laws and proposals. In 2006, seventeen states raised their minimum wage. Six of those states did so through ballot measures that also included annual indexing of the new wage (previously, only three states had indexing). Indexing remains a tough political sell. Voters love it, politicians don’t: nine of the ten states with indexing were a result of ballot measures. Therefore, it’s politically vulnerable to repeal attempts: Oregon, Washington, Alaska and Florida have all had to defend against proposals to ditch indexing. Alaska lost their battle. Therefore, studies that provided economic evidence that indexing in these states is not having deleterious effects could be useful as additional states craft and defend proposals to increase and index the minimum wage in the future. Research suggesting state-specific economically defensible wage levels and indexing schemes would also be useful.

In addition, although the citywide minimum wage model has not taken off (partially due to legal and political limitations of this approach), it has not been ruled out as a possibility in selected cities. Any such campaign that arises will undoubtedly require a serious economic impact study before going forward.

5. The living wage movement is integrally connected with other campaigns for decent work: paid sick leave, mandated health insurance, et al. Many of these issues are just taking root among activists and the media. What questions will arise that will need to be answered when we're looking at a larger package of decent work policies?

ACORN is now heavily involved in statewide campaigns to establish a new labor standard: a minimum number of paid sick days per year for all workers. We are also working to support Senator Kennedy and Representative DeLauro’s Healthy Families Act, which would provide workers with at least 7 paid sick days a year. The arguments against paid sick days that have already arisen from business opponents of this issue closely echo those we are familiar with from our living wage/minimum wage campaigns. Namely: too high a cost for businesses will result in reduced hours, reduced jobs, cuts to other benefits, etc.

For each campaign, our side needs to answer questions like: How many workers in our state lack guaranteed paid sick days? Who are those workers (gender, race, income, age, years in the labor force, part time/full time, etc.)? In what industries do they work? What are the economic/business consequences of not paying sick days?

Similarly with other workplace justice issues, the research must speak to the predictable, age-old claims of industry trade associations and free-marketeers.

I have also been thinking about research that uses the strong record on wage issues to make clear the relationship between established labor standards and newer proposals such as paid sick days, mandated health care, etc. For instance, how does the lack of paid sick days (or health care), function to reduce slightly-above-minimum wage or barely-living wage jobs back to essentially minimum wage jobs?

6. Recalling the minimum wage campaign in Arizona in 2007, opponents abandoned all economic argument, and instead claimed that a wage of $6.75 would compromise workers' privacy. As Pollin asks in the book, would they have returned to an economic argument at $8.00 /hour? $9.00 or more? How do you and other organizers feel about exploring the territory where a wage floor can perhaps actually support a family, and the impacts on businesses might be more substantial?

I think organizers are willing to push policy proposals as far as they think they are winnable. But viability has to be the bottom line, since each loss makes the next campaign harder to win. I think part of the reason the living wage movement was so successful was that our proposals were modest enough and we built momentum by winning.

I am not sure to what degree opponents’ main arguments in a given campaign are calibrated to the specific proposal. In fact we have seen some off-the-wall claims associated with extremely modest wage proposals. However, I do think much higher wage proposals encourage opponents to stick with their go-to economic arguments of job loss and price increases. For instance, if we had proposed $9.00 in Arizona, they would have immediately emphasized that we were trying to impose a 75% increase in the minimum wage. In addition, it would have been far easier for them to legitimately threaten job flight to surrounding states with significantly lower minimums.

Having said this, the higher wages we win over time and across the country, the higher our proposals should – and will – go. And – to address your deeper question here - I do hope I live to see the day when the power of organized money is in check to the degree that citizens can argue that the value of establishing a living wage for all workers trumps the value of avoiding any and all negative impacts on businesses.

7. Technically speaking, it's important to distinguish between living wage laws--typically higher wage levels, often applied only to public contractors within a limited jurisdiction--and minimum wage laws, typically with lower wage levels and broader application. Do these distinctions remain intact in the field? Is one direction more promising than the other in the pursuit of fair wages for all?

In many ways I feel like I’ve spent much of the last decade making that distinction for activists, academics and the media. Yes – it is still a useful and tangible distinction in the field as those terms usefully represent two very different policy proposals. I think both approaches remain promising, though what we have clearly seen in the last two years is an upsurge in statewide minimum wage campaigns and a falling off of the local living wage efforts. There are several reasons for that, not the least of which is that the capacity that community and labor groups built over the decade when living wage movement peaked (1995-2005) is being put to good use in raising the stakes for statewide wage campaigns. Though the wage levels in these campaigns are – as you say – lower, the number of workers who benefit is astronomically higher. I do think there remains much work to be done to establish living wage policies (and interject living wage politics!) in the South. And there will clearly be years – like this one – where state minimum wage campaigns are less politically viable (due to the recent federal increase) – so both policies remain important.

8. When a new campaign starts up in a community, often the organizers will have no idea about research and other campaign elements that have already been laid down by previous campaigns elsewhere in the country. How do you create these connections, and minimize the reinventing-of-the-wheel in each local campaign?

This has been one of the main functions of ACORN’s Living Wage Resource Center – to act as a clearinghouse for campaign resources to support activists on the ground and to represent and frame the living wage movement to the public. Since LWRC was established in 1998, we’ve reached out to – and been reached by – thousands of individuals, organizations, elected officials, academics, media representatives, etc. We were able to build a national technical assistance infrastructure to provide support to the growing movement: ACORN providing campaign strategy, training and materials; the Brennan Center for Justice providing legal and legislation-drafting support; PERI and the Economic Policy Institute providing economic research and expert testimony, the SPIN Project, Fairness Initiative and others providing public relations and messaging. ACORN convened three national living wage conferences over that decade to respond to the needs of campaign in the field and connect them more directly to resources and to each other; We also co-wrote a guide on how to run living wage campaigns that sold more than 750 copies and worked with funders to encourage financial support for the grassroots campaigns and critical research that made the movement possible.