You may not remember, but Washington once sold a lot of canned asparagus. It wasn’t just a boutique industry, selling fancy jars of pickled vegetables to rich locavores. It was a full-blown, mass-producing, global-marketing, profit-making, employing-thousands-of-people industry. Big companies like Seneca Foods and Del Monte had canneries here. Asparagus grew on nearly 30,000 acres of Washington farmland.
Then, it all went wrong. Tastes changed. People wanted fresh, not canned. There was competition, especially from Peru, encouraged to export asparagus instead of cocaine by U.S. drug policy.
Then in 1998 Washington’s empathetic voters overwhelmingly passed Initiative 688, and ordered regular raises in the state’s minimum wage, keyed to a Seattle inflation index. Washington suddenly had the highest minimum wage in the country. The asparagus canneries were ordered to pay their employees more than the economic value their labor could produce. That was not possible. All the good intentions in the world could not make it so. The canneries closed. The jobs were gone, every one. The cannery workers didn’t enjoy their raise for long.
This effect was barely noticed outside the sparsely populated agricultural regions of Southeast Washington, so there was no cautionary tale, no lessons learned. Few seemed to notice that there was a line that could be crossed, where arbitrarily raising wages by government decree could do much more harm than good. There were economic laws that not even the earnest sympathies of the distant wealthy could overcome. You can’t pay wages with money you don’t have.
It must be nice to be in a city wealthy enough to consider seriously raising its highest-in-the-nation minimum wage by 60 percent. Seattle should enjoy the debate. Its candidates for mayor, incumbent Mike McGinn and challenger Ed Murray, seem to be on a quest to out-progressive each other. The end-run to the left is cut off. Both support, with strategic hedging and escape routes, an increase in Seattle’s minimum wage from the state’s $9.19 per hour to $15. The proposal follows a union-backed national cause du jour. Murray, the supposed centrist, says he will push for $15, but in phases. McGinn, not to be flanked, said $15 was a “fair starting point” and he would support it if the City Council was so inclined
In the poorer regions this might seem like a crackpot scheme, forcing hamburger joints to pay everybody $30,000 a year. In Seattle, where the median household income is over $67,000, ideas like this gain traction. The workers of course, want it. Their customers want them to have it. The labor unions that finance a good share of the political discussion want it. Their economists say it will be no problem. It’s a “living wage” everyone deserves, they say, and by local standards still not much.
Of course there will be consequences. Supply-and-demand will still be in effect. Raise the price of anything and people will use less of it, labor included. Employers must have profit to remain employers. Some will be able to make do with less, either fewer employees or smaller profit. Others won’t make do. The impact may be hard to see, confined to the economic periphery where most Seattle people don’t go, but there will be an impact. People with a desire to work, but meager skills and less to offer a prospective employer, will feel it.
Over in Columbia County, where the median household income is a little more than half Seattle’s and where they once had asparagus canneries, someone might raise a hand and urge their friends to the west to think this through clearly. In economics, your wishes don’t always come true.
Tracy Warner’s column appears Thursdays and Fridays. He can be reached at email@example.com or 665-1163.