Minimum Wage Hike Passes in 4 Red States

Unbundling the Democratic Agenda

Fast food workers on strike for a $15 an hour wage.

Is it a coincidence that all four states that voted to raise the minimum wage yesterday are Republican strongholds? At least one of those states (Arkansas) and most likely two (Alaska, where Mark Begich is behind but has not conceded) are replacing Democratic incumbents with Republican senators. Nebraska, where Republican Ben Sasse was elected to the Senate with 64.8 percent of the vote, and South Dakota are among the reddest states in the country.

Yet all four voted to raise their minimum wage, three of them by margins that could fairly be described as overwhelming. Moreover, they raised those minimum wages a lot, to levels that more liberal states would envy. One useful way to look at it is to consider not only the new minimum wage numbers, but place them in a national context by adjusting them withgovernment data on the cost of living:

Alaska, January 2016 minimum: $9.75
adjusted for cost of living: $9.10
Arkansas, January 2017 minimum: $8.50
adjusted for cost of living: $9.70
Nebraska, January 2016 minimum: $9.00
adjusted for cost of living: $9.99
South Dakota, January 2015 minimum: $8.50
adjusted for cost of living: $9.64

For comparison, the $10.00 an hour minimum wage that is set to kick in for California comes to $8.86 adjusted for local prices. In other words, Nebraska — Nebraska — will have the highest real minimum wage in the country. The National Employment Law Project, a supporter of the initiative, estimates the $1.75 an hour minimum wage boost will directly affect 143,000 workers in a state of 1.9 million and raise total wages by $117 million a year.

Two lessons might drawn here. The obvious: There may be support out there in more liberal states for substantially higher minimums. If $9.00 can pass in Nebraska, it’s worth asking if, say, $11.25 — roughly the same in real-dollar terms — or even higher can pass in California.

The less obvious lesson: Political parties in a losing position can succeed by unbundling their policies and try to pass the most marketable parts of their agenda without the legislature.
By and large, political agendas are sold like cable packages, as a big take-it-or-leave-it raft of policies. Much as with the cable packages, the customers (ie. voters) take them while gnashing their teeth and complaining that there are no other options.

In this case, Democrats, seeing no market for the full party package have had to take a good look at the policies they are selling and pitch thee most attractive ones a la carte via ballot initiatives. By definition all ballot initiatives take issues directly to the voters. What’s different here from marijuana or gun control votes is that, despite the support of a few Republicans like Mitt Romney, the minimum wage is a central Democratic issue, and the campaigns were financed mainly by the party’s core contributors.

In Nebraska $600,000 of the $1.2 million cost of the minimum wage initiative (big h/t to the indispensable Ballotpedia) was underwritten by Dick Holland, who’s been called the Nebraska Democratic Party’s “most generous and dependable contributor.” In Arkansas thebiggest contributor was the Interfaith Alliance, a consortium of Democratic-leaning religious groups.

The reddest states are the places where the Democrats have the most incentive to unbundle their policies and sell them through ballot initiatives, and so they’ve wound up passing aggressive increases in the minimum wage. This is not a totally new phenomenon — for many years Republicans in California went directly to voters with tax cuts. What’s new is just how effective it has proven to be. Fully 65 percent of Arkansas voters and 59 percent of Nebraska voters marked the ballot for higher minimum wages. So what percent may vote for other especially palatable slices of the Democratic agenda, like expanded health care for poor children? We may get to find out in 2016.