Published: Wednesday, October 1, 2008
Prosperity for all is best built from the ground up
The candidates in our acrimonious governor's race need to take a lesson from the 1930s.
Economists are calling this the biggest crisis since the Great Depression. Those were tough times. When Roosevelt took office in 1933, unemployment was 25 percent. The grim black and white photos of Hoovervilles and Dust Bowl migrants are stark reminders of the human suffering that results from an economic meltdown.
Yet we came out of the Depression with Social Security, unemployment insurance, rational regulation of financial institutions, and powerful unions. New Deal reforms saved capitalism from its own excesses and became the foundation for a growing middle class and widely shared prosperity for many decades.
In a debate last week, both Dino Rossi and Gov. Chris Gregoire called for rollbacks that would hurt Washington's working families and thus our economy.
Rossi suggested lowering the state's minimum wage for young and entry-level workers. Washington's voters overwhelmingly passed the minimum wage initiative in 1998, including an automatic cost of living adjustment (COLA) to protect low-wage workers from inflation and partisan wrangling.
Because we were the first with a COLA, Washington's minimum wage is now the highest in the nation at $8.07. But other states have followed our lead and are close behind. California and Massachusetts both have minimum wages of $8.00, Oregon's is $7.95, and Illinois' is slated to jump to $8.25 in 2010.
Some economists used to think that raising the minimum wage reduced jobs -- but that was before actual evidence proved their models wrong. Washington's job loss during the last recession was led by the dot-com collapse and layoffs in manufacturing, both high-wage sectors. Our state recovered more fully from the 2001 recession than the nation, and we're still in better shape. Restaurants, among the largest employers of minimum wage workers, have posted especially strong job growth.
According to the U.S. Census Bureau, three of every four minimum wage workers are adults, and nearly half work full time. And they do jobs all of us rely on in retail, restaurants and childcare. No one who works full time should live in poverty, and pay should be based on the job performed, not on qualities such as race, gender or age. Economic hard times are precisely when we need our time-tested minimum wage law.
Gregoire defended our minimum wage law, but announced she was suspending preparations for family leave insurance. That program is slated to start one year from today, on Oct. 1, 2009. It will provide parents with five weeks off work with partial pay to care for newborn or newly adopted children.
Bonding, breast feeding and loving care in those first few weeks lay the foundation for a child's healthy physical, social and intellectual development. Gregoire has frequently emphasized that children's health and early learning are two of her highest priorities. Yet postponing paid family leave will result in more sick kids and more left behind at the starting gate.
There are multiple options for funding family leave, even in hard times. For instance, we could suspend some tax breaks, such as the $30 million in high tech incentives Microsoft claims every year, the $10 million pop syrup credit (when for just 10 cents more you can supersize that soft drink!), the $40 million sales tax break for toxic fertilizers that poison our water, salmon and farm workers, or the $30 million on candy (it's "food" like ketchup is a "vegetable").
Seventy-five years ago, FDR boldly proclaimed Americans were no longer on their own. We created systems of shared economic security based on the notion that we each have a stake in the well-being of our fellow citizens, unleashing a wave of innovation that allowed our nation to flourish for the next half century.
We can also turn this crisis into an opportunity. Our state's strong minimum wage and the family leave insurance program build economic security and prosperity from the ground up. By building on, rather than shredding, these foundations, we can come out of this crisis on the path to a more perfect union.
Marilyn Watkins, policy director of the Economic Opportunity Instititue (www.eoionline.org), writes every other Wednesday. Her e-mail address is marilyn@eoionline.org.
Economists are calling this the biggest crisis since the Great Depression. Those were tough times. When Roosevelt took office in 1933, unemployment was 25 percent. The grim black and white photos of Hoovervilles and Dust Bowl migrants are stark reminders of the human suffering that results from an economic meltdown.
Yet we came out of the Depression with Social Security, unemployment insurance, rational regulation of financial institutions, and powerful unions. New Deal reforms saved capitalism from its own excesses and became the foundation for a growing middle class and widely shared prosperity for many decades.
In a debate last week, both Dino Rossi and Gov. Chris Gregoire called for rollbacks that would hurt Washington's working families and thus our economy.
Rossi suggested lowering the state's minimum wage for young and entry-level workers. Washington's voters overwhelmingly passed the minimum wage initiative in 1998, including an automatic cost of living adjustment (COLA) to protect low-wage workers from inflation and partisan wrangling.
Because we were the first with a COLA, Washington's minimum wage is now the highest in the nation at $8.07. But other states have followed our lead and are close behind. California and Massachusetts both have minimum wages of $8.00, Oregon's is $7.95, and Illinois' is slated to jump to $8.25 in 2010.
Some economists used to think that raising the minimum wage reduced jobs -- but that was before actual evidence proved their models wrong. Washington's job loss during the last recession was led by the dot-com collapse and layoffs in manufacturing, both high-wage sectors. Our state recovered more fully from the 2001 recession than the nation, and we're still in better shape. Restaurants, among the largest employers of minimum wage workers, have posted especially strong job growth.
According to the U.S. Census Bureau, three of every four minimum wage workers are adults, and nearly half work full time. And they do jobs all of us rely on in retail, restaurants and childcare. No one who works full time should live in poverty, and pay should be based on the job performed, not on qualities such as race, gender or age. Economic hard times are precisely when we need our time-tested minimum wage law.
Gregoire defended our minimum wage law, but announced she was suspending preparations for family leave insurance. That program is slated to start one year from today, on Oct. 1, 2009. It will provide parents with five weeks off work with partial pay to care for newborn or newly adopted children.
Bonding, breast feeding and loving care in those first few weeks lay the foundation for a child's healthy physical, social and intellectual development. Gregoire has frequently emphasized that children's health and early learning are two of her highest priorities. Yet postponing paid family leave will result in more sick kids and more left behind at the starting gate.
There are multiple options for funding family leave, even in hard times. For instance, we could suspend some tax breaks, such as the $30 million in high tech incentives Microsoft claims every year, the $10 million pop syrup credit (when for just 10 cents more you can supersize that soft drink!), the $40 million sales tax break for toxic fertilizers that poison our water, salmon and farm workers, or the $30 million on candy (it's "food" like ketchup is a "vegetable").
Seventy-five years ago, FDR boldly proclaimed Americans were no longer on their own. We created systems of shared economic security based on the notion that we each have a stake in the well-being of our fellow citizens, unleashing a wave of innovation that allowed our nation to flourish for the next half century.
We can also turn this crisis into an opportunity. Our state's strong minimum wage and the family leave insurance program build economic security and prosperity from the ground up. By building on, rather than shredding, these foundations, we can come out of this crisis on the path to a more perfect union.
Marilyn Watkins, policy director of the Economic Opportunity Instititue (www.eoionline.org), writes every other Wednesday. Her e-mail address is marilyn@eoionline.org.
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