San Francisco Raises Its Minimum Wage to $15 an Hour

AP

The Democrats were brutalized at the polls Tuesday, but progressives can at least take some consolation in some notable strides made toward a living wage.

Four solidly red states not renowned for kindness to workers (Alaska, Arkansas, Nebraska and South Dakota) passed ballot measures that will significantly increase their minimum wage in coming years. Two of the increases are indexed to inflation, which makes their impact permanent. 

But the more exhilarating advancement on minimum wage was made by the citizens of San Francisco, who voted overwhelmingly in support of a ballot measure that raises the city's minimum wage to $15 per hour. The proposition phases in the increase over a three-year period, and should be fully in effect by the summer of 2018. 

Seattle is the only other city in the country currently implementing a $15 minimum wage, which is the highest rate in the nation.

Higher wages make moral and economic sense: San Francisco has held the status of having the highest minimum wage in the country for the past decade (currently, it sits at $10.74), but it's much more widely recognized as a city gentrifying at breakneck pace, the new home of the tech industry and the former home of a diverse community of low-income residents who were priced out the moment the newcomers got comfortable.

San Francisco is one of the most expensive cities in the country, and by some measures, the most expensive. Earlier in the year, San Francisco's Human Services Agency found the city's level of inequality to be akin to developing countries in Central America and sub-Saharan Africa. Polls show that displacement or the prospect of it permeates the city's popular consciousness. 

In other words, an exceptionally high minimum wage is a necessity. And research shows that it won't wreak havoc on the economy.

The University of California, Berkeley's Labor Center published a study this summer that found that the local economy possesses the capacity to absorb the raise in the wage, which would only have a modest impact on business operating costs. It also examined evidence from an earlier minimum wage shift and found that the costs for businesses were offset by reduced turnover and improved performance.

Here's a chart from the study comparing Bay Area restaurant employment to surrounding counties, which shows that restaurant employment in San Francisco actually rose slightly faster than in surrounding counties after the minimum wage increase (and incidentally, again after policies requiring paid sick leave and health spending were implemented):

Source: Instititute for Research on Labor and Employment, UC Berkeley
Source: Instititute for Research on Labor and Employment, UC Berkeley

Many economists consider taking bigger steps in raising the minimum wage to make both moral and economic sense. 

"This is first and foremost a question of morality. Anyone who works full-time in America should be able to support themselves and their families and shouldn't have to live in poverty," Marjorie E. Wood, senior staff member of the Global Economy Project at the Institute for Policy Studies and the managing editor of Inequality.org, told Mic.  

"But a minimum wage increase is also economically smart," Wood said. "Unlike high earners, minimum wage workers tend to spend all of their earnings. That means putting more money in workers' pockets will boost our economy, not hurt it, as opponents often claim." 

The Republican sweep on Tuesday undoubtedly did some serious damage to prospects for workers (things are looking grim for Medicaid expansion and unions), but the minimum wage is getting more attention than it has in the past two decades. Let's hope more cities face it as boldly as San Francisco and Seattle have in the past year.