The Supreme Court Just Refused to Shield Corporate America From a $15 Minimum Wage. What Happens Now?

By Alan Pyke, ThinkProgress

03 May 16

ith the Supreme Court’s decision Monday not to hear the fast food industry’s lawsuit against Seattle, the nation’s first $15 minimum wage law is safe – and opponents of higher pay floors for U.S. workers are running low on options.

The decision upholds two previous rulings that Seattle’s law does not discriminate against franchise firms like McDonald’s. The case was the most prominent legal challenge to a large minimum wage hike in recent years, and one of several to fail.

But while the hugely profitable industries that oppose Fight for $15 workers and their allies aren’t making much progress on the legal front, they’re far from done fighting. The minimum wage battleground reaches far beyond the legal arguments that have failed in Seattle, New York, and Washington, D.C.

With defeat in court long expected, have opponents have turned instead to a more devious strategy: Cutting off working people’s primary avenue to economic independence before they even get to walk down it.

Paternalism At The Statehouse

You might expect self-described free-market critics to be content to let cities and states flirt with wage hikes, knowing that if they go too far the market will correct. But instead, corporate interests and their conservative allies are setting out to deny local communities the chance to even experiment with higher pay floors.

Lawmakers in dozens of states have sought to preempt local employment laws of all kinds, from minimum wages to paid sick leave laws to anti-discrimination protections in the workplace.

Preemption has started to draw more attention in the past year. But this is no newfangled innovation. Statehouse preemptors have been putting thumbs in local eyes for more than a decade. The American Legislative Exchange Council’s (ALEC) “Living Wage Mandate Preemption Act” model legislation has been kicking around back rooms since the early 2000s.

For almost as long, states have been barring local communities from forcing corporate interests to shift money from shareholders to workers. Florida barred its towns and counties from hiking wages all the way back in 2003, a full decade before New York City fast food workers walked off the job and launched the Fight for $15.

From 2011 to 2013, lawmakers in 31 states introduced 105 bills drafted by the corporate interests behind ALEC designed to chip away at wage standards at state and local levels. Few became law.

But since low-wage workers’ protests erupted into a national campaign with a long and growing string of victories under its belt, the idea of circumventing local democracy with preemption measures has started to take off. The similar, parallel momentum behind state and local paid sick leave laws prompted a similar backlash.

Arizona adopted a preemption bill in 2013, but had it struck down in state court last year. That hasn’t stopped tantrum-minded conservatives from trying to manipulate local decisionmakers: Gov. Doug Ducey (R) has promised to retaliate against cities that raise their wage floors by denying them state funding.

Nor has it discouraged other lawmakers. Michigan adopted the idea last year. Missouri too, over Gov. Jay Nixon’s (D) veto. Virginia Gov. Terry McCauliffe (D) successfully vetoed a wage preemption law this spring. New Mexico, Washington, and Idaho all saw lawmakers flirt with the idea too.

And this spring, lawmakers pulled a fast one in Alabama. Birmingham, its most populous city, decided to slowly raise its minimum wage to $10.10 over an almost two-year glide. But even that amount – equivalent to what the federal minimum wage used to buy in the late 1970s, before Reaganism and supply-side thinking let inflation swallow its buying power and doom millions of working families to deep poverty – so pissed off state leaders that they passed a preemption law in a legislative sprint this Winter.

Now, the state’s working class is fighting back in court. A lawsuit filed Thursday against Gov. Robert Bentley (R) argues that keeping minimum wage levels down in the poverty zone in such a deeply black, deeply poor state violates the Constitution.

Urban Legends

Nefarious and undemocratic preemption laws may be trendy these days. But there are still plenty of minimum wage opponents out there doing it the old fashioned way by scaring the bejesus out of voters and media figures.

Since the academic literature on wage hikes is a conflicting morass, it's easy to pluck out a few friendly studies and gin up a scary prediction: Jobs will vanish, the dead will rise, your dog will stop loving you.

Many times, such fearmongering relies upon a 2014 Congressional Budget Office analysis of a huge number of research papers on the minimum wage. The CBO study of a $10.10 minimum wage found it would mean a million fewer Americans would live in poverty – but would also “reduce total employment by about 500,000 workers.”

Republicans flocked to that half-million-jobs figure. But economists have questioned the CBO’s assumptions about how employers would respond to wage hikes, and argued the boost might even bring a net gain in employment. And both critics and boosters of a wage hike agree that raising the pay floor would take a giant bite out of the poverty rate.

What’s more, the literature that the agency was reviewing is riddled with “publication bias.” The economist consensus is that minimum wage increases have little or no impact on overall job levels, but papers with that conclusion struggle to get published in journals looking for something splashier than the conventional wisdom. And some of the most heavily negative studies the CBO looked at have serious methodological flaws.

Race To The Bottom

If you can’t scare people off before a wage hike becomes law, it’s easy to poll a few business owners and draw a wild conclusion.

Business-friendly interests tried that in Seattle, declaring it Apocalypse Now for the city’s beloved restaurant scene before the country’s first $15 minimum wage law had even begun its six-year sliding-scale march. The doomsayers were wrong, according to both the actual data and the specific restaurant owners who they had cited as examples. Even Investors Business Daily, a reliably right-wing economics rag, acknowledged in March that data indicate job growth defies conservative expectations post-wage-hike in Chicago, San Francisco, Los Angeles, and Washington, D.C.

None of that is stopping political leaders from trying to exploit wage-hike fears for their own benefit.

Florida Gov. Rick Scott (R) is currently touring California, weeks after that state adopted a $15 minimum wage plan. Scott hopes to lure California businesses to Florida. He insists 700,000 jobs will be lost in the coming years thanks to the hike Gov. Jerry Brown (D-CA) signed last month.

The estimate is bogus, according to UC Berkeley economist Michael Reich.

But it’s a big, flashy number. And after minimum wages stagnated for decades around the country, it’s easy to throw out gaudy claims about job-killing. There just aren’t many case studies out there to tell us with confidence just who’s right and who’s wrong about the kinds of large-but-flexible wage hikes that Seattle, New York, California, and dozens of other governments have decided to enact.