Minimum

During this week in 1933, a debate was going on in the Nevada Legislature over the minimum wage. The Nevada Assembly approved a $5 a day minimum compared to the Senate’s $4 a day.

A $4 a day wage would have been $0.50 cents an hour for an eight hour day. If adjusted for inflation over the years, it would now be $9.34. A $5 daily wage would have been $0.625 an hour. In 2017 dollars, that would be $11.67.

In fact, today’s federal minimum is $7.25 an hour—and it was raised to that level eight years ago. The federal minimum has not kept up with inflation in years.

In Nevada, the minimum wage is $8.25. Nevadans voted in 2006 to make the state wage one dollar higher than the federal minimum. That gives workers some relief, but it is still tied to a federal minimum that chronically lags. (Employers who provide health insurance are immune from the extra dollar.)

A nationwide effort for a $15 minimum wage has been underway for several years. The Fight for 15 campaign began on the east coast, particularly New York, but scored its biggest breakthroughs in the West. In 2014, Seattle became the first city to enact a $15 an hour minimum. After two years, a Seattle Minimum Wage Study Team at the University of Washington posted a study indicating that the hike did what it was supposed to do—raising pay while causing few job losses and increasing the annual income even of workers who lost hours. The business community went to work trying to discredit the study.

At the 2015 Nevada Legislature, Clark County Sen. Richard Segerblom introduced a $16 minimum measure ($15 for employers with health insurance). In a session with a double Republican majority, it was given one hearing and never heard from again.

The movement picked up steam in the presidential campaign when candidate Bernie Sanders campaigned against “totally inadequate wages.” Paradoxically, when the minimum wage issue was riding high and enjoying momentum, a Nevada initiative petition to boost wages was withdrawn from circulation.

At the current Nevada Legislature, an Assembly measure would increase the minimum wage by $1.25 per hour each year until 2022 when it would hit $15 if an employer does not offer health insurance, $14 if s/he does.

A Senate bill raises the minimum 75 cents per hour annually until it hits $11 an hour with insurance, $12 without.

This gradualism is not popular among some higher wage advocates. One Nevada Bernie Sanders campaign official said the $15 wage is needed now and that by 2022 “some of the raise will be eaten up” by inflation.

They also say Nevada’s economy is hampered by the low minimum because consumer spending lags. “Local businesses, our state’s economy, and, most importantly, everyday Nevadans will benefit from a pay raise,” said Assemblymember William McCurdy, sponsor of the Assembly version.

The business community is making its customary arguments against the minimum wage.

“Nevada’s minimum wage proposal would turn some low-margin small businesses in the state into the new victims of dramatic minimum wage hikes,” wrote Employment Policies Institute research directory Michael Saltsman in a Las Vegas Review-Journal essay. “The result would be fewer job opportunities for those who need not only a paycheck but also the structure, skills and workplace socialization that comes with learning on the job. The Silver State should focus on preserving these entry-level employment opportunities, not threatening to eliminate some of them and exacerbate its high youth unemployment rate with a dramatic minimum wage increase.”

But today’s $7.25 federal minimum is actually lower in real dollar terms that it has been several times in the last half century. And during that period, workers have increased their productivity, hours and education levels.

There is one additional problem that critics have raised. The previous ballot measure approved by voters amended the Nevada Constitution at article 15, section 16. It contains specific figures for a minimum wage. But the bills being considered by the legislators would change statutes, not the constitution.

Columnist Thomas Mitchell argues the state minimum cannot be raised without constitutional change. He quoted a 2015 Legislative Counsel Bureau fact sheet: “Because provisions governing the minimum wage rate are included in the Constitution, any changes to the minimum wage provisions require a constitutional amendment.”

A statement from the governor’s office recited a list of reasons Gov. Sandoval has opposed a higher minimum wage but did not say he would veto one.

“Due to the predicted loss of jobs and harm to small businesses, the potential to block young people and individuals with less work experience from open positions, and an increase in consumer prices, the governor has historically opposed a legislative mandate to increase the minimum wage,” the statement said.