Government’s effort to raise minimum wage may backfire

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Now that both the president of the U.S. and the mayor of Seattle have signed executive orders to make huge increases to the minimum wage, it’s obvious, if it wasn’t before, that living-wage pay is going to be the big political push of the year.

But aren’t they doing it backward?

Both Seattle Mayor Ed Murray and now President Obama have signed orders to begin implementing a pay boost — but only for those who work for the government or on government contracts. They did this because these are the workers under their control. But also, they both said, to set the table for better wages for everyone else.

“I believe I need to set an example and the city needs to set an example, if we’re asking others to make some adjustment,” Murray said earlier this month as he signed an order for a $15-an-hour wage floor for city employees — about a 60 percent boost to the minimum here.

Obama said he would raise the national wage from $7.25 an hour to $10.10 — 39 percent higher — but only for employees hired under federal contracts. He was doing what he could, he said, to start a political push.

It’s possible that giving huge pay hikes to some government workers will spark a prairie fire to get higher pay for all. But it could just as easily leave the taxpaying citizenry smoldering with resentment.

In the short term, it will widen a pay gap between the private and public sectors. For lower-wage jobs, the government generally pays more than private businesses already (This gap reverses as you go up the professionalism scale). Last year, the Congressional Budget Office found that federal workers with a high-school diploma or less make 21 percent more in wages than workers with the same skills and experience in the private sector, and have 72 percent richer benefits.

Now it’s not like any of these workers are getting rich. Personally, I don’t think anyone should be paid less than $10 an hour, in 2014, for doing any job. Heck, I’ve paid teen baby-sitters that much, or more, so it’s hard to fathom states where people labor for seven bucks an hour.

But as Slate magazine noted about Obama’s proposal: “The specific outcome here is one that nobody wants — the White House doesn’t actually think there should be a special $10.10 minimum wage for federal contractors, they think there should be a broad-based increase. They’re just not going to get Congress to pass one.”

The outlook is better in Seattle. But chances of Seattle going to $15 an hour in one fell swoop, for everyone, seems remote (and unwise). By the time it’s resolved, we will already have installed a higher minimum wage, but only in government.

In this state we have thankfully avoided full-blown Wisconsin-style resentment of public employees, who are only doing their jobs.

But a surefire way to get there is for politicians to enable and even encourage the elimination of benefits such as pensions (for private-sector schlubs at Boeing, anyway) while at the same time pushing big wage increases (but mostly for the government itself).

Look, people are fed up with lousy pay. Polls show huge support for raising the minimum. But like with taxes, it ought to be broad-based and gradual. Earlier this month when a slew of small businesses on Broadway in Seattle came out against the $15 wage idea, they got bash­ed as heartless. But what they were protesting was having wages jacked 60 percent, overnight, and only in Seattle.

There’s a bill in the Legislature to raise the wage to $12, by dollar increments over three years. Crucially, it would apply to everyone equally, government and private, all at the same time.

No, it wouldn’t solve income inequality. It wouldn’t thrill the socialists or the capitalists. But what it would be is something missing so far from this debate: fair.

Danny Westneat can be reached at westneat@seattletimes.com

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