Minimum wage ballot measures funded by out-of-state money crush local small businesses
Minimum wage appears to have little impact on Senate races
Publication Date: November 2016
Washington D.C. – Ballot measures in Maine, Colorado, Arizona, and Washington to dramatically raise the starter wage appear to have passed. An EPI analysis of campaign finance data shows that this outcome is likely the result of a flood of money from labor unions and labor-backed organizations, much of it from out of state. That money overwhelmed small businesses’ warnings that many entry-level jobs would be destroyed as a consequence of shifts to automated, self-service alternatives.
- In Maine, the pro-$12 minimum wage campaign – misleadingly known as “Mainers for Fair Wages” – received $632,000 in contributions from out-of-state groups, 65 percent of its nearly $1 million fundraising total.
- In Colorado, the pro-$12 minimum wage campaign received $5 million in cash and in-kind donations from out-of-state groups, 93 percent of its $5.3 million total.
- In Arizona, the pro-$12 minimum wage campaign received over $2.3 million in cash donations from out-of-state groups, 54 percent of its $4.2 million total. (The real fraction in Arizona is likely much higher because the in-state money was coming from a 501(c)4 that doesn’t have to disclose its donors, yet has admitted that some its money came from out of state.)
- In Washington state, powerful union groups and Seattle-based liberal billionaire Nick Hanauer combined resources for a campaign war chest of over $4.3 million.
It also appears that the minimum wage was not the election-year wedge issue that proponents made it out to be. (Labor groups pledged to “knock on tens of thousands of doors” with the minimum wage message.) As of midnight on November 9th, of the 20 U.S. Senate races where the Republican incumbent was on the record voting against a $10.10 federal minimum wage in 2014, only one (Mark Kirk) lost their seat. (Races in New Hampshire, Missouri, and Pennsylvania were yet to be called.) In Indiana, Rep. Todd Young–who voted against an increase when he was in the House–won his race for US Senate.
EPI Research Director Michael Saltsman released the following statement:
“Unfortunately, opposition to state-level minimum wage ballot measures by local small business owners was drowned out by a flood of out-of-state money. Big Labor interests continue to sacrifice local entry-level labor markets to advance their activist agenda. On the bright side, it appears that principled opposition to wage hikes was not the political burden that proponents had hoped it would be.”
Economists David MacPherson and William Even replicated Congressional Budget Office methodology, which found that a $10.10 federal minimum wage would cost 500,000 jobs nationwide, to conclude that a $12 minimum wage will cost Arizona 15,000 jobs, Colorado 9,700 jobs, and Maine 3,800 jobs.
The consequences of dramatic minimum wage increases, including layoffs, reduced hours, and business closures, are already being felt in parts of the country that have passed such hikes. Specific stories can be found on Facesof15.com.
EPI released a recent video featuring DiMillo’s on the Water in Portland, ME. Owner Steve DiMillo explains that he supports a responsible increase in the minimum wage, but warns that a proposed 220 percent increase in the special tipped wage threatens his employees and the future of his family’s restaurant.
The Employment Policies Institute is a nonprofit research organization dedicated to studying public policy issues surrounding employment growth. In particular, EPI focuses on issues that affect entry-level employment. EPI receives support from restaurants, foundations, and individuals.