Tuesday, September 13, 2016

There Will Be Special Election for Cleveland Minimum Wage Increase in 2017

Posted By on Tue, Sep 13, 2016 at 8:57 AM

City Council approved legislation at its meeting Monday evening to put a revised, though still controversial, minimum wage increase before voters in a special election next May.

The proposal would raise the minimum wage in Cleveland to $12 per hour (up from its current $8.10) the following January.

Though the original petition, brought forward by members of Raise Up Cleveland and the Service Employees International Union, had aimed to raise the minimum wage to $15 per hour, City Council and a host of other city leaders violently rejected the hike. They argued that the precipitous increase in Cleveland alone would lead to local businesses fleeing for the suburbs.

The SEIU then submitted a revised proposal, which Councilman Jeff Johnson had earlier proposed, to hike the minimum wage in the city of Cleveland to $12 per hour, followed by a $1 annual increase over the next three years. This proposal, still largely unpopular in the business community, is what Cleveland residents will vote on in May.

Councilman Brian Cummins, who proposed an alternative wage plan that would raise the minimum wage to $12 by 2022, frequently cited his misgivings about a $15 per hour wage. He posted an op-ed from the Brookings Institution to his Facebook page yesterday that explained why big wage increases, especially in markets like Cleveland, with significant numbers of unskilled and minimally educated workers, are too risky. 

In addition to concerns about job loss and business relocation, author Harry Holtzer argues that a third potential outcome could be devastating for low-skill workers: 

"It might take time for employers of many low-skill workers to learn how to economize on their labor costs, but they will over time, since the incentives to do so are much larger," Holtzer writes. "For instance, fast-food workers might be more easily replaced by robots. Hotels may reduce their tendency to automatically clean the rooms of their guests, and may charge extra for doing so. In the state of New York, fast-food franchises will probably be replaced by other kinds of restaurants and food services. Employers in these industries will also likely demand better education, skills and experience among those whom they hire."

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