Sasha Feldstein is a first-year MPP candidate at the Goldman School of Public Policy, and a new blogger for The Wire. 

In early June, 2014, a coalition of low-wage workers, unions and community organizations called Lift Up Oakland collected over 30,000 signatures to put a minimum wage hike on the ballot. The measure will raise the minimum wage to $12.25 beginning in March, 2015. Under Measure FF, there will be no gradual phase-in, no exceptions for non-profits or small businesses, and the minimum wage would continue to increase with inflation each year.

So what do you do when you’re a city councilmember and you want to prevent this measure from passing? You try to get your own ordinance passed before voters can weigh in, of course.

And that is exactly what happened. Back in July, Oakland City Councilmember Pat Kernighan and Councilmember Lynette Gibson McElhaney proposed an ordinance that called for a gradual increase in minimum wage, starting at $11 an hour on July 1, 2015, increasing to $13 an hour on July 1, 2017, and going up to $15 an hour on July 1, 2021. Small businesses with fewer than 15 employees, youth-in-training programs, apprenticeships, and non-profits would only be required to raise their minimum wage to $10 an hour, followed by $11.50, then $12.95 on July 1, 2021.

The current minimum wage in Oakland is $9 an hour, which will rise to $10 an hour on January 1, 2016, regardless of whether or not Measure FF passes, in accordance with California state law.

Both the ordinance and the ballot measure also call for paid sick days. The gradual ordinance allows employers to cap paid sick leave at five days a year, while Lift Up Oakland’s proposal allows caps at five or nine paid sick days, depending on business size.

The debate around how—and by how much—to raise the Oakland minimum wage has been a source of contentious debate amongst business owners, city councilmembers, the Chamber of Commerce, and a variety of Oakland workers’ rights groups.

The critics who sought to block Lift Up Oakland’s measure worry that it could unintentionally hurt small businesses, nonprofits and job-training programs for youth. According to a memo from councilmembers Kernighan and Gibson McElhaney, the Lift Up Oakland measure would be “too big a cost jump for some types of employers to absorb in an 8 month period and thus would cause unintended negative impacts on those employers, several sectors of our economy and a significant number of Oakland residents.” As a parenthetical note, Gibson and Kernighan wrote “I have already heard from one such provider of day care for hundreds of frail elderly seniors that the program could not continue operating if the wages for their care workers increased by an additional $3.25 an hour in the coming year.”

Critics of the measure also cited a study by a Berkeley Haas School of Business alum, Linda Hausrath, on the potential effects of the wage hike on the business sector. “In 13 out of 15 of the business categories,” she writes, “the labor increase exceeded the entire profit margin and in most of them it was more than twice the profit margin…. Many of the small businesses in our districts serve a lower income clientele and cannot raise prices by up to 12% in order to break even. They will have to lay off employees or perhaps close altogether.” The memo also cites other city established and proposed minimum wage ordinances, in Berkeley, San Francisco and Seattle, noting that all have chosen to phase in a wage increase over multiple years. 
Hausrath Economics Group. (2013). Economic Impact Assessment of Proposed Minimum Wage Increase in Oakland.

Supporters of the measure say these claims are false, or at best unconvincing. According to a study conducted at the Institute for Research on Labor and Employment at UC Berkeley, the Lift Up Oakland measure would directly benefit minorities and workers of color, who make up about 62.1 percent of the total workforce in Oakland, but in fact represent about 78.7 percent of workers who would be affected by a minimum wage increase to $12.25. Their prediction, contrary to what opponents suggest, is that the “increase would have a modest impact on business operating costs and consumer prices. Research evidence indicates that the costs of a higher minimum wage are absorbed through reduced worker turnover, improved worker performance and small one-time increases in restaurant prices.” 

And how big would that price increase be, exactly? Restaurant prices would increase by 2.5 percent. In other words, a $10 meal would increase to $10.25. For retail prices and the local economy as a whole, the researchers argue, the increases would be negligible. “Operating costs would increase by 0.3 percent for retail businesses.” The researchers also cited three previous studies that found minimum wage increases to have little negative impact on employment, if any impact at all. 

Tanya Moss is a dual-degree MPP/MPH candidate at the Goldman School of Public Policy and the School of Public Health, and a new blogger for The Wire.  

GSPP recently hosted a panel discussion, "FOOD+LABOR: Forging a Truly Sustainable Food Policy Agenda for California in 2015," which examined what a joint food and labor policy agenda might look like in 2015.

The reason the panel was held is that these two movements have generally worked separately but are, in fact, deeply connected.  How can we fight for a sustainable and ethical food system without fighting for fair wages and working conditions for those that grow, prepare, and serve our food? And what does it mean to simply raise wages for food workers without addressing the fact that the majority of the food those workers produce and sell makes us sick?

A joint food and labor agenda makes sense. These are two policy areas that can learn a lot from each other. The labor movement has been more successful at passing policy (such as paid sick days and minimum wage increases), but less successful in building a consumer movement around the issue and engaging those already fighting for food system reform. The food movement has mobilized consumers to demand healthier and more sustainable food options, but has been less successful in passing regulatory policy that incentivizes a healthier food system.

While the idea of a joint food and labor policy agenda is a good one, the panel discussion missed a crucial roadblock to a successful joint policy agenda. Much of the opposition to public health regulatory measures that aim to move us away from an industrialized food system to healthier food systems focuses on the fact that regulatory measures will kill jobs. Businesses protest policies such as soda taxes or warning labels, restrictions on advertising to children, or reduced commodity crop subsidies by saying these policies will raise food costs, harm small businesses, and lead to job losses.

For example, the very Assemblymember who authored a recently passed bill that requires paid sick days for California employees organized against, and ultimately secured, the defeat of another bill that would have placed a label on sugar sweetened beverages warning consumers of the health risks of consuming those products. When making her case against the bill, she cited lost jobs due to reduced soda consumption as the reason she was opposed. Here, we have the healthy food movement and the fair labor movement in opposition. How can a joint food and labor policy agenda reconcile this issue?

The questions we need to answer are: do these regulatory policies really threaten jobs in the markets they seek to regulate? And if so, at what point is it worth it to proceed anyway?

To the first part of the question—of course it depends on the policy. Businesses make similar sounding arguments against paid sick days and minimum wage policies, citing increased costs and potential layoffs as a reason not to make these changes. However, when looking at evaluations of past regulations, especially minimum wage increases, the weight of the evidence shows that businesses are able to absorb the costs of increased regulation, and jobs are generally not lost.

The second part of the question is trickier. What if a proposed policy really does have negative employment effects? How do we know when it is still worth it to proceed? First, we must realize that the food industry produces many negative externalities—greenhouse gas emissions, degradation of land and habitat, and poor diet leading to chronic disease, sky-high healthcare costs, loss of productivity and loss of life. It is not beneficial to protect an industry that costs us so much. If jobs are “lost” in these industries, they will most likely be gained elsewhere—ideally in an industry that does not produce as many negative externalities.

This is a complex issue that must be addressed through careful policy analysis and not in a blog post. But if the food and labor movements are really to come together effectively, the issue must be addressed. Otherwise, we will continue to be unsuccessful in our efforts to create a truly sustainable and just food system.

Matt Unrath is a first-year MPP candidate at the Goldman School of Public Policy, and a new blogger for The Wire.

This week, the Census Bureau issued its annual release of data on poverty, household income and health insurance coverage, reporting that 15 percent of Americans lived below their respective poverty lines in 2013.

Despite our ostensible economic recovery, our nation’s poverty rate has barely budged over the last four years. The proportion of Americans living in poverty in 2013 is nearly the same as it has been since 2010, and every year in between.

The causes of this hardship are well understood—unemployment remains high, our recovery has been led by the growth of low-wage jobs with no benefits, real median wages have declined since the 1960s, and the cost of living continues to rise. What should be equally well-known, however, are the issues with how our federal government defines and measures poverty. For many, this explanation of the poverty guidelines’ flaws is old news, but the annual release of these national figures provide us an important opportunity to count its issues again, so here goes…

The income thresholds, against which we compare households’ incomes to determine whether they are defined as poor, are still defined as three times the cost of a family’s food expenses – a definition based on a methodology that used a survey of household expenditures from the 1950s. Despite the fact that families devote a much greater share of their budgets to housing, health care and education today than they did 50 years ago, we still assume they spend a third of their budgets on food.  This is obviously a faulty assumption, and leads us to rely on income levels that are way too low. According to the federal poverty thresholds, a family of four needs an annual income of $24,000 to not be classified as poor. In much of the country, that is not even enough for housing, let alone groceries, utilities, health care, transportation, and child care.

Very importantly, the measure does not account for differences in living costs: the federal poverty thresholds are the same in rural Montana as they are in San Francisco.  And the measure’s strict definition of family as individuals related by blood or marriage overlooks other household arrangements, including cohabitating couples and families with foster children.

Still worse, the Census Bureau’s official poverty measure does not capture the impact of critical anti-poverty programs. Non-cash transfer payments like SNAP or housing vouchers are not counted as income in the Census’s measure, and so are not used to determine whether households are poor. Critical tax-based assistance policies like the EITC are also ignored.

Fortunately, the Census’s new poverty measure gives these programs the credit they deserve. The new Supplemental Poverty Measure (SPM) accounts for the income gains that households experience thanks to various safety net programs. It also accounts for the true costs of many other living and work-related expenses (beyond food and housing) by deducting the cost of these expenses from total household income. A household is defined as poor if the remaining income is less than the cost of housing, food and clothing for a household in their community.   

Last year, Columbia University researchers produced a comprehensive study of poverty rates, which found that safety net programs reduced the country’s poverty rate from 26 to 16 percent over the last half century. The Center on Budget and Policy Priorities reached a similar conclusion: their research found that the poverty rate would have been twice as high in 2012 if not for our safety net programs. Columbia’s research also confirms the importance of expanding the definition of income to include the cost of basic expenses. Accounting for the cost of all basic expenses, without considering the value of safety net programs, today’s poverty rate would be 29 percent.

The Census’s new SPM is not the only other income adequacy measure out there. A measure produced by Wider Opportunities for Women (full disclosure: where I used to work), for example, details the true cost of all living expenses for over four hundred different family types in every county across the country. WOW’s measure suggests that families need three to six times the poverty thresholds for basic economic security, which is defined as the ability to meet all of a household’s basic expenses and save for the future. It should be no surprise that, by WOW’s research, nearly half of all Americans lack this security.

That 30 or 50 percent of Americans live in poverty, struggle to make ends meet, or experience economic insecurity – however one prefers to describe their income – suggests a constitutively different policy challenge than what the headline Census Bureau figure released today suggests. Surely, policymakers need to better address the needs of those 15 percent of Americans our traditional poverty measure designates as poor. An improved measurement of poverty, however, and attendant changes in how we talk and think about it that speak to the realities of families living paycheck to paycheck but not officially in poverty, might help both policymakers and the public reconsider how we confront issues of job quality, unemployment, income inequality, and funding for and access to income support programs.