Wrangle over highest minimum wage in the US, championed by Socialist councillor, likely to pit businesses against workers

The only socialist city councillor in the United States is torn.



On the one hand, Kshama Sawant has claimed an “historic victory” for a populist campaign that pressured Seattle’s mayor, politicians and business owners to embrace by far the highest across-the-board minimum wage in the US at $15 an hour.

On the other, the economics professor accuses the Democratic party establishment and corporate interests of colluding to compromise its implementation as the city council on Monday begins to hammer out the terms for setting pay at more than double the federal minimum wage. Sawant is gearing up to put the issue on the ballot in November’s election if the final legislation is not to her liking – a move Seattle’s mayor has warned could result in “class warfare” as it is likely to pit big business against increasingly vocal low-paid workers and to divide the trade unions.

The Socialist Alternative party’s sole elected representative hailed the looming debate on the legislation as evidence of a growing backlash across the country against the wealthy getting ever richer while working people endure decades of stagnant wages and deepening poverty.

“The fact that the city council of a major city in the US will discuss in the coming weeks raising the minimum wage to $15 is a testament to how working people can push back against the status quo of poverty, inequality and injustice,” she said.

One third of Seattle residents earn less than $15 an hour. A University of Washington study commissioned by the council said the increase would benefit 100,000 people working in the city and reduce poverty by more than one quarter. The pay of full-time workers on today’s minimum wage would increase by about $11,000 a year.

Sawant can claim a good share of the credit for forcing the agenda. Seattle fast-food workers got the movement off the ground early last year in joining nationwide strikes and protests that began in New York. But the Socialist Alternative candidate helped put the $15 demand at the fore of Seattle’s politics by making it the centrepiece of an election campaign she began as a rank outsider against a Democratic incumbent. Sawant won in November with more than 93,000 votes, socialist views, strong denunciations of capitalism and the occasional quoting of Karl Marx evidently no longer an immediate bar to election in the US.

The mayor, Ed Murray, also threw his support behind the $15 campaign in the last weeks of the election, in part under pressure from one of the state’s largest trade unions, as opinion polls showed more than two-thirds of Seattle residents backed the move.

Once on the council, Sawant used her position to keep the pressure up. “My election had a decisive impact. Because we have a socialist on the city council we get a massively magnified microphone for our cause,” she said.

Facebook Twitter Pinterest Seattle mayor Ed Murray addresses a news conference on a proposal to increase the minimum wage in the city. Photograph: Elaine Thompson/AP

'This is a historic moment for Seattle'

The effect can be seen as the city’s best-known councillor orders coffee at a Starbucks – one of the hugely profitable global corporations headquartered in Seattle and a target of her scorn for its low wages. Three young women working behind the counter recognise Sawant, who was raised in India and retains her Mumbai accent, from repeated appearances on the local news. They profess their support. Other customers approach to praise her policies.



Sawant’s campaign has resonated far beyond her city, giving her a degree of national recognition few local councillors ever enjoy. Her response on a Seattle cable channel to Barack Obama’s state of the nation address in January, in which she accused the president of betraying Americans mired in poverty , spread via the internet and reinforced her growing reputation among activists outside Seattle.

Branches of a pressure group she helped established in the wake of her election, 15 Now, have sprung up from New York and Florida to California to replicate the minimum wage campaign there.

But Sawant’s success in pressuring Seattle’s political and business establishment to accept the principle of $15 an hour has set the stage for a struggle over its implementation that looks likely to prove the hardest part yet.

Murray, newly elected as mayor, followed through on his campaign promise in December by establishing a committee of business interests, trade union representatives and politicians to map out the path to $15 an hour.

Sawant and trade union representatives pushed for the increased minimum pay to be imposed on large corporations from the beginning of next year.

Smaller businesses with fewer than 250 workers and non-profit groups would get a three-year phase-in with incremental increases. “The public battle on $15 an hour, that number, has been lost by business,” said Sawant. “There is so much support that they’re not able to come out and say: I don’t support 15. Now the fault lines have gone to: I support 15 but we have to do it thoughtfully. What they mean is, let’s not. Or let’s do it in such a way that it takes 10 years to get to $15. Then it’s meaningless. We’re saying that workers need $15 an hour in today’s dollars.”

Business interests argued for the higher minimum wage to be implemented over a decade or even two. They demanded the cost of benefits, such as healthcare insurance, be included in the calculation and that there be exemptions for teenage and new workers. A contentious issue was a push by restaurant owners for a lower minimum wage for workers who receive tips.

Murray announced the committee’s recommendations on May Day. They map out a circuitous route to $15 an hour spread over 11 years: large corporations would pay the new wage in full by 2017 if they do not provide health care coverage to workers. If they do, they get an extra year.

For businesses with fewer than 500 workers, the new pay structure would be phased in over seven to 11 years, depending on a number of factors. That accounts for about 30,000 workers in Seattle or a third of those making less than $15 an hour, according to the University of Washington study for the city council.

According to the recommendation, all businesses will be paying at least $15 an hour, adjusted for inflation, by 2025. That represents a 61% increase on Washington state’s minimum wage of $9.32 an hour, already the highest for a state in the country.

“This is a historic moment for Seattle,” said Murray. Council member Nick Licata, a Democrat, called the recommendation “very progressive”. Trade unions also backed the committee’s decision while acknowledging they had been forced to give ground.

But Sawant refused to endorse the recommendations. “The proposal that has been announced is the result of pressure from this movement. Unfortunately it also reflects the pressure from business to water down what the working people of Seattle want,” she said.

The city council is free to reject the recommendations of the mayor’s committee as it considers legislation in the coming weeks but it is likely the Democratic party establishment will rally around Murray.

Sawant is keeping up the pressure in league with a 15 Now campaign to collect 30,000 voter signatures to bypass the council and put an amendment to the city’s charter on the ballot in November requiring a $15 minimum wage on her terms.

Murray said he wants to avoid a fight over a ballot initiative because it “would end up in a mini-version of class warfare”.

An uphill struggle

The mayor has an eye on SeaTac, a neighbouring city of just 28,000 people which is effectively a Seattle suburb and home to the area’s main airport. It had a more limited $15-an-hour measure on the ballot two years ago. Businesses and trade unions, including Alaska Airlines, the American Car Rental Association, the Washington Restaurant Association and hotel owners poured a total of more than $2m in to influencing voters. The measure narrowly passed. Sawant is in no doubt that a similar showdown in Seattle, the largest city in the Pacific north-west, would attract the involvement of low paying multinationals beyond those, such as Starbucks and Amazon, based in the city.



“Walmart, McDonalds, they all have an interest in stopping us because we are the threat of a good example. It’s not only if we pass $15 an hour but when it is shown that it helps Seattle to prosper, then other cities will watch and follow,” she said.

Sawant said she too wants to avoid a ballot initiative by winning the support of local business interests for council legislation to require big corporations to pay the new minimum wage from next year and smaller enterprises within three or four years.

It’s an uphill struggle. A business coalition, One Seattle, has raised the spectre of layoffs, cuts in hours, and the closures of shops and restaurants if the minimum wage is pushed too high too fast. Seattle's chamber of commerce, which includes Starbucks and Amazon, said companies will cut jobs and raise prices to cover their costs. A group of minority-owned businesses wrote to Murray saying the increase would have hit immigrant workers hard.

This has not been the experience of other cities that have passed significant increases in the minimum wage. A study by economists at the University of California Berkeley of San Francisco and other cities and states that require minimum wages above the federal level concluded that higher pay did not come at the expense of jobs. Instead, the costs were passed on through a mix of low price increases and higher productivity. Another study came to a similar conclusion about a large increase in the minimum wage in Santa Fe. In both cities the economies continued to grow.

A group with links to the labor movement, Puget Sound Sage, produced a study that an increase to $15 an hour “would result in a $526m stimulus to low-wage worker households in Seattle and the region”. Most of that money would be spent in the local economy, it said.

Facebook Twitter Pinterest A woman holds a sign calling for Seattle to introduce a $15 an hour minimum wage during a May Day rally. Photograph: Sipa USA/Rex

Robert Reich, the US labor secretary in the Clinton administration, supports increasing the federal minimum wage to $15 an hour on the grounds that it will not only benefit workers but employers.

Sawant said the message she is pressing on small businesses is that extra pay means more money for people to spend in local shops and restaurants. “You don’t need a PhD in economics to know where they’re going to spend the money. They’re going to spend it here,” she said.

If it does come down to a ballot, Sawant’s challenge will be to bring on board the voters who support the $15-an-hour principle but may be persuaded by arguments for gradual implementation. That task won’t be made easier by differences with trade unions which once offered their support but who have backed the recommendations by the mayor’s committee.

But for now, the ballot initiative hangs in the background as the council debates legislation. Licata, the Democratic council member who sat on the mayor’s committee, said he will press for its recommendations to be implemented. “It’s not perfect but it’s doable and I want to get something done,” he said.

Sawant is full of scorn. She says the mayor and his party have become an obstacle.

“He often talks about how we don’t want to create class warfare. That’s why he doesn’t want a ballot initiative, because he says it will be divisive and class warfare – and that’s where there is a clear divergence. My response to that is that this is capitalism, this is class warfare. The only thing that’s changed is that the working class in Seattle is finally forcing the political establishment, working people are speaking up.”