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March 12, 2014

Civic energy forces wage rise

Last week saw the launch of a new campaign to remind everyone of the shocking numbers of people in Scotland who live in poverty – 870,000.  It’s clear that employment is no longer a guarantee of being lifted out of poverty.  Large numbers of part time jobs when full time work is wanted, minimum wages, zero hours contracts – a low wage economy which increasingly appears to be an economic fact of life in this country.  Unless you choose to reject that analysis and do something about it. Like the citizens of SeaTac did. 


Gavin Kelly, The Observer

To read full article click here

Until the turn of the year, few Americans had much reason to have heard of SeaTac, a small community just outside Seattle. Those aware of the town’s existence knew it as a place that exists to serve the city’s bustling Seattle–Tacoma international airport. But SeaTac is now firmly on the map.

Recent events there have shone a light on the increasingly febrile, high-energy politics of low pay. And they also tell us something about how paralysis in Washington DC is prompting more states, cities and communities to act to improve their prospects.

A generation ago SeaTac was what Americans would call a middle-class town. A jet-fueller or baggage handler could earn a decent living. Those days are gone. These and many other jobs are now paid far less – either at, or just over, the local minimum wage. As David Rolf, the influential vice-president of the Service Employees International Union, and a guiding hand behind events at SeaTac relates: “It’s gone from being comfortable to a poor town, even in a prosperous corner of the US. This story of a whole community being shut out of prosperity is a microcosm of what’s been happening across America.”

It’s a familiar tale and one worthy of a chapter in last year’s spellbinding book The Unwinding by George Packer, which narrates the decline of the great American middle class and the rise of trickle-up poverty. During the 1980s and 1990s, ever more jobs were outsourced from the airlines, benefits were cut back and across the great majority of the airport economy wages were reduced to around the minimum wage. In 2005 one of the big airlines operating at SeaTac fired nearly 500 baggage handlers and hired contractors to replace them. Those who lost their jobs earned around $13 an hour, the new contractors just $9.

More recently there have been repeated union efforts to organise workers, but to no avail. An escalation of traditional forms of protest – marches, rallies, press campaigns – all sought to get the airlines and other employers to lift pay or improve conditions. Again, all failed. “Given the opposition we faced, only a higher level of disruption was going to shift events,” Rolf says.

This disruption came in the form of a petition that easily garnered enough support to force a local referendum on the minimum wage. A coalition of unions, faith and community groups decided to push for a hike in the wage floor in SeaTac from Washington’s minimum wage of just over $9 to $15 (with exemptions for small employers). The campaign was fought by both sides – unions and community groups versus employer bodies – with an intensity normally reserved for a swing state in the runup to a presidential election. Large sums of money were spent (a couple of million dollars) on an electorate of 12,000 voters. “Yes! For SeaTac” – those pushing for the pay rise – knocked on the door of each home an average of four times. Both sides knew the cost of failure would be high.

For a highly local campaign the nature of the argument was surprisingly “big picture”: a battle of competing ideas about the national economy. It was either “middle-out” economics versus “trickle down”, or “free-enterprise” versus “big government”, depending on your political leanings. As Rolf puts it: “We had no idea that we were about to host a national election on fairness and the future of the American economy in our own backyard.”

When the votes were cast last November the Yes! campaign won by a tiny majority of 77 votes and SeaTac became a national story. The vote meant that, starting last month, about 1,600 employees in restaurants, hotels and car-hire agencies received a 60% pay rise. A larger number working inside the airport are awaiting a legal appeal over whether the SeaTac authorities have jurisdiction over the airport premises. It’s too soon to judge, but so far there is little sign that the pay rise has led to major price hikes or job losses.

SeaTac may have caught the public imagination, but in an important respect it is unexceptional. When I ask Rolf if he expects to see other SeaTacs, he responds immediately: “We already are.” An upsurge in civic energy on the charged issue of low pay has resulted in a growing number of mayoral campaigns and popular votes aimed at raising pay. Over the last 15 years there have been 10 state-level referendums on raising the minimum wage. All were won. So far in 2014, 22 minimum wage-related bills have been introduced across 14 states. This is no longer about one or two isolated cases.

One of the things that unite the many diverse local communities that make up contemporary America is the fact that they are governed by a capital that – for now at least – is locked into a pattern of politics that is as adversarial as it is inert. New ideas, political momentum and reforming energy should be celebrated wherever they are found. Right now this means looking away from Washington DC. Whether it is cities such as Seattle, San Francisco, Chicago, New York or formerly obscure towns such as SeaTac, these are the places to watch.

Gavin Kelly is chief executive of the UK’s Resolution Foundation thinktank