There's another reason for corporations to resist them, too. If minimum-wage increases improve the economies of the communities which adopt them, the lesson will be visible to the nation as a whole. It will provide even more evidence for the idea that economies are best built from the ground up and the middle out, not from the top down.
Thinking economically, acting locally
But can these initiatives really succeed in improving local economies? Despite the naysayers, that seems likely.
Economist Tyler Cowen spoke for the "anti" side on the Marginal Revolution blog when he wrote of such initiatives, "... unless you have the Sea-Tac airport or some comparably immobile resource in your district, it is harder to make them work if the wage change is local only." Certainly SeaTac's airport makes it exceptional, but there are a number of municipalities with major employers.
And while there is no precise data on the impact of hyper-local minimum wage differences, it would be a mistake to accept the idea that these initiatives will only work in a SeaTac-like situation. Consider the county initiatives in Maryland, for example: It's unlikely that people will drive from Rockville to Frederick or the District of Columbia for a lower-cost fast food meal.
Feeding the hand that bites them
Cowen goes on to say that these laws are "a classic instance of expressive voting at the expense of good economic policy." Is that true? Will fast-food outlets sell fewer meals when the minimum wage is raised, for example? Let's look a little closer at the data.
As the Bureau of Labor Statistics reports, "About three-fifths of workers earning the minimum wage or less in 2012 were employed in service occupations, mostly in food preparation and serving related jobs."
Among other things, this is the same demographic that typically eats at fast food restaurants. This has led a number of economists to suggest that the cost of paying an increased minimum wage will be partially offset by an increase in sales these establishments. Lower-wage workers are also a primary target market for employers like Walmart, which is why certain estimates and studies have suggested that an increase to the minimum wage would lead to offsetting gains for the retail industry.
What's more, an increase in the minimum wage would also release pent-up demand in the economy -- demand that is likely to have a stimulus effect on local and national economies.
What's next?
Successful minimum-wage initiatives at the state, county, and municipal levels could help spur action at the national level, while shifting the political equation leftward. Grassroots worker action may yet, as Rep. Alan Grayson says, represent "a new political movement of the disenfranchised."
Even those highly-publicized Black Friday fights over televisions are, in an indirect way, part of the struggle. The fighters don't realize it yet, but their squabbles symbolize the plight of middle-class Americans who have been forced to fight one another for meager "bargains" -- "bargains" which include low-paying jobs with poor working conditions -- rather than working together to fight for a better system of transactions.
Two complementary movements -- one based in the workplace, and the other in the voting booth -- could have profound and broad significance. Their immediate goal of increasing the minimum wage has enormous value on its own. But it could also become a coalescing point for a broader movement for economic justice.
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