Pocketbook Politics

If Not Now, When?

With unemployment at its lowest level ever -- 2.8% as of August, according to the Texas Workforce Commission -- one might ask, why now? Minimum wage issues tend to surface in times of economic downturn, not relative prosperity. But with the cost of living skyrocketing out of proportion with wages, coalition members say, that "typical" $516 one-bedroom apartment is out of reach for many low-wage workers in Austin. Although Austin's higher wages put most workers well above the federal minimum of $5.15 -- which American Federation of Teachers president and ALWC member Louis Malfaro dismisses as "so low it's meaningless" -- coalition members say that wages still aren't keeping up.

Even at the higher wages that prevail in Austin, says Malfaro, low-end workers -- those making $6 to $7 an hour -- are being left behind. "You hear a lot about the 'booming economy' in Austin," Malfaro says. "People have to realize that ... there are a lot of folks out in our community who aren't riding the wave." At $6.12 an hour, according to a study conducted by the Washington, D.C.-based Economic Policy Institute, the average hourly wage for low-income workers in Texas in 1997 was 9.2% behind the national average, with high-income workers pulling in almost 12 times as much as the lowest 20%.

"I would almost dare you to find a minimum wage employee in Austin."
-- Glen Garey, Texas Restaurant Association

photograph by John Anderson

Another reason for the sudden emergence of the living wage movement in Austin is a larger trend toward the resurgence of wage issues across the country. The success of activists in Baltimore, Chicago, Milwaukee, and San Antonio have opened the floodgates for a revitalized movement in Austin, where labor and business have a history of keeping a respectful distance. That distance is sure to be breached, however, when the coalition begins to step on businesses' toes, either by calling for a living wage for city-contracted businesses or by pushing for a universal wage ballot initiative. But by that time, coalition members hope, the public will be sufficiently aware of the issue to resist the business lobby's inevitable advertising blitz.

The fairly even success-to-failure ratio of living wage campaigns nationwide has led to a tenuous mix of hope and caution within the ALWC, which has so far escaped the business community's usually penetrating gaze. David Brown, president of the Austin chapter of the AFL-CIO, is relatively optimistic. "The key is whether we can get corporate Austin to agree with us on what we want to accomplish,and I think there are a lot of business leaders [who] agree with us on what we're doing," he says.

Other coalition leaders, however, are less sanguine about the business community's likely reaction. Noting that the wage hike for city workers does nothing to affect private businesses directly, Greg Powell, an organizer with the American Federation of State, County, and Municipal Employees (AFSCME), predicts that business groups will perk up quickly once the living wage threatens to cut into their bottom line. "Right now, it's not touching them," he says. "Once an ordinance starts imposing on these businesses, they're going to act like they always do. They're going to rise up in opposition, and we're prepared for that."

Business Side of the Coin

Business leaders, who almost unanimously oppose the idea of a higher minimum wage, readily confirm this suspicion. Glenn West, president of the Greater Austin Chamber of Commerce, says that although the number of businesses that contract with the city is fairly small, the larger business community would generally view a living wage initiative for city-contracted employers "as a stepping stone toward a citywide minimum wage." In general, West says, "the business community believes that the less regulation there is for how people should be compensated, the better -- the market, supply and demand, and the skills people bring to the job will determine that."

Moreover, many business leaders point to Austin's thriving economy as evidence that a higher minimum wage is unnecessary and potentially destructive. Glen Garey, general counsel with the Texas Restaurant Association -- an influential lobbying group representing restaurants and food service employers across the state -- says that the only minimum wage jobs that exist in Austin are entry-level positions for teenagers and people just breaking into the employment market. "I would almost dare you to find a minimum wage employee in Austin," Garey says. Besides, he adds, "I would hope that if someone's going to have children and a wife they'd have thought ahead and would be making more than the minimum wage, because it was never intended to support a family. It was intended as an absolute floor."

The primary argument of business leaders, however, centers not on the moral character of minimum wage workers, but on the more immediate perils of the shrinking bottom line. When the minimum wage is raised, business leaders argue, employers will "cut labor costs" (fire their workers) and increase prices, in accordance with the inexorable logic of supply and demand. The person who ultimately pays, says the Chamber's West, is the consumer. "You run the risk of significantly adversely affecting a fairly large number of businesses" by instituting a living wage, says West. "They've got to trim costs somewhere, either by laying off workers or raising prices."

Austin Living Wage Coalition members, citing the many times that the minimum wage has been raised this century with no obvious ill effects, call that argument nonsense. In fact, they say, a universal higher wage actually helps the economy because low-wage workers have more disposable income to spend on goods and services. "There's only about 1% of the population that will make more money and hide it under a mattress" instead of spending or investing it, says the AFL-CIO's Brown. "Always, when the economy is good ... the more money you have being reinvested in some form or another, whether it's purchasing goods or investing in stocks."

Beyond that, there is another reason why a higher minimum wage makes sense, says John Schmitt, a financial analyst with the Economic Policy Institute who specializes in minimum wage issues. When low-wage workers don't make enough to provide for necessities, the community pays -- by subsidizing their care at public hospitals, paying taxes for welfare and other public assistance, and paying the costs of high turnover -- costs that are ultimately passed on by businesses. When wages are raised, Schmitt says, indirect costs are decreased even as direct costs rise. "Turnover decreases, your training rate goes down because you're not having to train new workers all the time, and your absentee rate goes down," Schmitt says. "People don't want to lose their jobs because ... they're making good money."

As an organization that is long on enthusiasm but currently short on cash, the ALWC is hoping that such philosophical arguments will sway Austinites to support them in their likely battle against a formidable -- and well-funded -- business lobby. But in the television- and direct mail-drivenworld of politics, money often speaks louder than ideology. In Houston, where fair wage campaign organizers spent $60,000 to their opponents' $1 million, it spoke loud enough to trounce a modest ballot initiative even in areas with high concentrations of low-wage workers. Orell Fitzsimmons, the plain-talking spokesman for the Houston campaign, vows never to go to the voters again without at least half a million dollars. "In politics it doesn't matter if you lie if you have a million dollars to get your lies out," Fitzsimmons says. "If you don't have the money and you know the opposition's going to have it, you can have a vote but you're going to lose it again."

Morals vs. Money

Austin organizers say they expect a challenge. But many feel that a concentrated educational campaign, combined with a series of solid, incremental victories, will ultimately triumph in a moral battle against ad dollars and high-poweredbusiness lobbyists. First and foremost, organizers say, their battle plan is "doable." The campaign's baby-step approach has caused some friction within its ranks, but it remains clear to most that a full-frontal assault on Austin's wage structure is probably doomed to fail. Although several members of the coalition, including Richard Troxell of House the Homeless, initially pushed for a citywide ballot initiative, the group decided on a five-year plan after examining similar efforts across the country. ALWC organizer Doug Zachary says he understands how the coalition's more radical factions feel. "I grew up very poor and very pissed, and I want to fight in a very public way," Zachary says. "This is the first time in 29 years of organizing that I've ever worked with a five-year plan. I want things to happen today, right now, and be retroactive, but we had to take a pragmatic approach."

For now, the momentum that has built up behind the ALWC's drive to increase wages for city workers seems strong enough to push proponents through at least the coming year. Already, the group has its eye on next year's city budget, where they hope to see a measure raising the wages of the lowest-paid workers in the Austin Independent School District. But if their efforts are going to reach beyond the cloistered domain of public employees, members say, they will need a significant infusion of public support and, more importantly, cash. Many, including the AFL-CIO's David Brown, believe that the latter will follow naturally once the former is achieved. "I think folks are understanding ... that as we progress economically the whole community benefits from it," he says. "It's not going to happen overnight, but I think it's certainly time to begin. In fact, I think it's long overdue."

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