Buried in the Republican Wave Are Votes to Increase Minimum Wage

An interesting dynamic is contrasting
tonight’s embrace of Republican politicians – votes in favor of
increases in the
minimum wage.

So far, South Dakota, Arkansas, and Nebraska have voted to
increase their minimum wages today. You will note that these states
are not hotbeds of progressive politics. Alaska has a pending vote
to raise theirs as well. We should not be surprised to see it pass
either. We know from polls that raises in minimum wages are popular
up until people are told that increases may cost jobs. Then they
turn against it. Emily Ekins explains
how that polling works here. A majority are okay with it
increases in minimum wages driving up prices. But if it costs jobs,
a majority turns against it. 

And so the debate becomes about costing jobs. Does it really? We
have a real world example to explain. In Los Angeles, the city
passed an ordinance requiring “living wages” for employees of
hotels near the city’s airport back in 2008. As they considered
expanding the law to all large hotel workers in the city earlier
this year they commissioned studies to analyze the impact of their
previous increase. Here’s what Christopher Thornberg of Beacon
Economics
discovered:

The data clearly show that hotels around the airport have seen a
sharp decline in employment relative to hotels in Los Angeles
County overall. Some 12% more people are employed at hotels in the
county than in 2007. The increase is apparent not only at hotels in
general but within individual hotels, which means the jump cannot
be attributed to an increase in the number of hotels elsewhere in
the county. But in the airport hotels covered by the law, hotel
employment has declined 10%.

As for the seeming disconnect between steadily high room
occupancy and fewer jobs, modern large hotels are far more than a
place to sleep at night. They offer a variety of restaurants, bars,
parking garages, banquet and conference halls and tourist
information centers. Anecdotally we have heard that many of these
secondary lines of business have been sharply curtailed or
eliminated because of the increase in labor costs. If higher wages
have made banquets, say, more expensive to hold at airport hotels,
it would be no surprise if organizations have decided to hold their
banquets elsewhere.

Unfortunately the city didn’t seem to actually care about
Thornberg’s report and voted for the increase anyway.