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Idaho Minimum Wage Initiative (2014)

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The Idaho Minimum Wage Initiative was not on the November 4, 2014 ballot in Idaho as an initiated state statute. The measure would have increased the minimum wage in the state from $7.25 an hour to $9.50 an hour by 2017.[1]

Background

In 2014, Idaho had the largest percentage of minimum wage workers relative to total hourly workers in the country. In 2012, 31,000 Idahoans were earning minimum wage or 7.7 percent of all hourly workers. This is a 63.2 percent increase in minimum wage workers from 2011. The U.S. Labor Department reported that three in four jobs created in Idaho last year were in the service sector, a labor sector known to be saturated with minimum wage jobs. Oregon and Alaska have the lowest number of minimum wage workers relative to total hourly workers with 1.1 percent and 1.0 percent, respectively.[2]

Support

The measure was sponsored by the group Raise Idaho.[3]

Arguments

Michael Reich, director of the Institute for Research on Labor and Employment and professor of economic at UC-Berkeley, and Ken Jacobs, chairperson of the Center for Labor Research and Education at Berkeley, said, "With the national debate stuck in the same old rut, states and cities have again become laboratories of democracy. Are they on the right path? For the last 15 years we have been doing research on just this question." The two wrote an op-ed supporting actions to raise the minimum wage at the state and local levels:[4]

  • They highlighted their research on San Francisco, a city with a municipal-wide minimum wage higher than the state's, saying, “After adding the effects of other local laws mandating employers to pay for sick leave and health spending, the minimum compensation standard at larger firms in San Francisco reaches $13. Our studies show that the impact of these laws on workers’ wages (and access to health care) is strong and positive and that none of the dire predictions of employment loss have come to pass. Research at the University of New Mexico on Santa Fe’s floor (now $10.66) found similar results.”
  • “But how can minimum wage increases not have negative effects on employment? After all, according to basic economic theory, an increase in the price of labor should reduce employer demand for labor… Our research and that of other scholars illuminates how businesses actually absorb minimum wages at low-wage industries. Higher standards have an immediate effect in reducing employee turnover, leading to significant cost savings. Minimum wage increases do lead to small price increases, mainly in restaurants, which are intensive users of low-paid workers. How much? A 10 percent minimum wage increase adds 0.7 cents on the dollar to restaurant prices. Price increases in most other sectors, like retail, are too small to be visible, partly because retail pays more than restaurants.”

Opposition

Opponents

Arguments

  • Alex LaBeau, president of the Idaho Association of Commerce and Industry, said, “It’s an arbitrary government interference in the private marketplace and we think unnecessary given the nature of the wages in Idaho.”[5]

Reports and analyses

See also: Minimum wage reports and analyses

The following studies are only a small sample of available research on the minimum wage. A broader overview of each study below is available here.

Neutral findings

  • Congressional Budget Office: In a February 2014 report, the CBO concludes that unemployment would rise, but the poverty rate would fall if the federal minimum wage was raised to $9.00 or $10.10. A $9 minimum wage would reduce employment by 100,000 or 0.06 percent, but 7.6 million workers would see their wages increase. A $10.10 minimum wage would reduce employment by 500,000 or 0.3 percent, but 16.5 million workers would see their wages increase.[6]

Findings in support


An Economic Policy Institute video summarizing some of their research and calling for a higher minimum wage.

  • Economic Policy Institute: In Raising America’s Pay: Why It’s Our Central Economic Policy Challenge, EPI economists conclude that despite increasing economic productivity, wages for most workers have stagnated or declined since 1979. They say this has occurred for four reasons: (1) Policies that reduced the bargaining power of workers and boosted the bargaining powers of "capital owners and corporate managers;" (2) The globalizing influence of free trade agreements; (3) “[T]he dramatic drop in top tax rates since the late 1970s;" and (4) the Federal Reserve Board's emphasis on decreasing inflation, rather than decreasing unemployment. The study called for both redistribution and predistribution in attempts to increase wages. By "redistribution," the authors mean "taxes and transfers," and by "predistribution," they mean "policies that impact the wages workers receive in the labor market," such as the minimum wage.[7]
  • Institute for Research and Labor Employment: The study looks at minimum wage differences between contiguous counties located in different states. These counties represent good control groups, according to the authors, since there is a difference in base wages between them, but many similar characteristics as well. By looking at counties across a 15 year timespan, the authors conclude that "These estimates suggest no detectable employment losses from the kind of minimum wage increases we have seen in the United States."[8]

Findings in opposition


An Employment Policies Institute video summarizing some of their research and opposing an increased minimum wage.

  • Employment Policies Institute: Economist Bradley R. Schiller examines "employment and family income of minimum wage workers between the ages of 33 and 50, in the years between 1998 and 2006 when the federal minimum wage was unchanged at $5.15 an hour." He finds that "concern about the ability of minimum wage employment to provide income support for families is exaggerated. Few adult minimum wage workers have families to support. And those adult minimum wage workers who do have families get substantial income from spousal employment."[9]
  • National Bureau of Economic Research: Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research is a review of the literature on minimum wage. David Neumark and William Wascher, the authors, conclude that a "sizable majority" of studies "give a relatively consistent (although not always statistically significant) indication of negative employment effects of minimum wages." Neumark and Wascher expressed a particular concern with disemployment effects on low-skilled workers. They said when research focused on this group, "evidence for disemployment effects seems especially strong."[10]

Path to the ballot

See also: Laws governing the initiative process in Idaho

Initiative supporters needed to collect at least 53,751 valid signatures from registered voters by May 1, 2014 in order to place the initiated state statute on the ballot. This would have been equivalent to 6% of the qualified electors of the state at the time of the last general election.

Supporters only submitted 8,157 signatures, and therefore, the measure did not make the ballot.[11]

Similar measures

The following measures related to minimum wage increases were proposed for the general election ballot in November:

See also

Footnotes

  1. ↑ Idaho Secretary of State, "2014 Proposed Ballot Initiatives," accessed January 16, 2014
  2. ↑ NPR State Impact, "Idaho Leads The Nation In Minimum Wage Workers," accessed February 27, 2013
  3. ↑ Raise Idaho
  4. ↑ New York Times, "All Economics Is Local," March 22, 2014
  5. ↑ 5.0 5.1 Idaho Press-Tribune, "State and federal efforts under way to raise minimum wage," January 26, 2014
  6. ↑ Congressional Budget Office, "The Effects of a Minimum-Wage Increase on Employment and Family Income," February 2014
  7. ↑ Economic Policy Institute, "Raising America’s Pay: Why It’s Our Central Economic Policy Challenge," June 4, 2014
  8. ↑ Institute for Research and Labor Employment, "Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties," November 2010
  9. ↑ Employment Policies Institute, "Just Getting By? Income Dependence on Minimum Wage Jobs," March 2011
  10. ↑ National Bureau of Economic Research, "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," November 2006
  11. ↑ The Spokesman-Review, "Wage, Pot Petition Drives Fall Short," May 1, 2014
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