The Politics of Minimum Wage Legislation in the Western United States: Lessons in Policy and Power

By Johnson, Colleen F. | Journal of Economic Issues, June 2002 | Go to article overview

The Politics of Minimum Wage Legislation in the Western United States: Lessons in Policy and Power


Johnson, Colleen F., Journal of Economic Issues


During the 1980s, a number of states raised their minimum wages, at least in part in response to Congressional unwillingness to raise the federal minimum wage. Among these were four western states: California, Oregon, Washington, and Hawaii. Since 1996, all four western states have again raised their minimum wages, in spite of the federal minimum being raised four times during the 1990s. Along with the state of Alaska, which pegged its minimum to $.50 above the federal minimum in 1962, the five western-most states have been among the most progressive states in the area of minimum wage legislation. As of January 2002, all five states have set their minimum wages significantly above the federal minimum and four of them have either indexed their state minimum wage to inflation or are considering such action.

Minimum wage legislation is clearly made within a political context. Each of these states has undergone a different process in order to raise its minimum wage, and each state provides an interesting case study of the political struggle between owners and workers. But together they furnish insights into the policy making process, the institutional structure of power in a democratic, capitalist society, and, importantly, how non-corporate ends might be achieved.

Oregon

In 1996, Oregon voters passed Measure 36, which increased Oregon's minimum wage from its 1996 level of $4.75 per hour to $6.50 per hour in 1999. The battle over this initiative was expensive and hard fought, with Oregon's labor unions strongly supporting the measure and Oregon's small business lobby attempting to defeat it. Arguments in favor of the increase focused on equity considerations, including the plight of the working poor and the income disparity between those working for minimum wage and those working at the top of the economic ladder, while arguments against the increase focused on conventional economic predictions of job losses and price Increases.

Unable to defeat Measure 36, Oregon's politically powerful business lobby, and in particular the restaurant lobby, immediately set about trying to convince the Republican-dominated House and Senate to alter the voter-approved legislation. In the end, the attempt to revise the minimum wage changes enacted by Measure 36 died on the floor of the House of Representatives after a bitter 30-30 vote. In 1999, the third and final minimum wage increase went into effect and once again the restaurant lobby attempted to persuade the Oregon legislature (again Republican-dominated) to alter the legislation. A bill did pass both the House and the Senate, which would have allowed some exceptions to the minimum wage, but Oregon's Democratic governor, John Kitzhaber, vetoed the bill.

During the legislative session of 2001, House Democrats introduced HB 2786, which would have adjusted the minimum wage annually for inflation beginning in January 2002. The bill died in committee after receiving a courtesy hearing. Undaunted, proponents of the bill have filed petitions to put the question before the voters in 2002.

Washington

The state of Washington followed quickly on the heels of Oregon's legislation with its own ambitious initiative. In 1998, Washington voters approved Measure 688, which increased Washington's minimum wage from $4.90 per hour to $6.50 per hour in 2000. An interesting twist in Washington's legislation was that starting in 2001, the minimum wage would be adjusted annually for inflation, the first such indexing in the nation. In 2001, the state of Washington automatically adjusted its minimum wage to $6.72 per hour based on CPI data, and did so again in January 2002 to $6.90. This path-breaking legislation has spawned other attempts at wage indexation, notably in Alaska, Oregon, and California.

As in Oregon, arguments in favor of Measure 688 were equity based and included the concern about increased poverty and greater economic dependence due to low wages. …

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