One of the clearest conclusions to emerge from November’s electoral rout is that the obsessive focus on single-issue campaigns like minimum wage backfired. If a larger part of the business community had bothered to engage on this issue, the backfire could have been even louder.
In eight marquee races where unions tried to make minimum wage an issue — Illinois, North Carolina, Kentucky, Nebraska, South Dakota, Colorado, Iowa and Wisconsin — candidates who were skeptical of minimum wage increases still won their races. The Washington Post was direct in its post-election analysis: The minimum wage “did nothing to save Democratic candidates in what were supposedly contested races.”
Last year’s minimum wage campaign was always about more than just raising the minimum wage. Democrats assumed that putting a wage hike on the ballot would not only bring out more left-leaning voters, it would also be the wedge issue that would help retain control of the Senate. This was the strategy that was sold to donors, who certainly expected more bang for their buck than just a handful of state-specific minimum wage increases below $10.10.
Unfortunately, even though politicians were willing to speak truth to populism on this issue and reject the phony free lunch arguments, business leaders were unwilling to invest in doing the same. The four minimum wage ballot measures in Alaska, Arkansas, Nebraska, and South Dakota faced near zero business opposition.
Local business leaders decided to sit on the sidelines, perhaps listening to misguided advice that opposition to the minimum wage is bad PR. Meanwhile, labor-backed proponents were left on the field alone to run up the score. Activist group Nebraskans for Better Wages spent $1.4 million on the ballot effort. Another group, Give Arkansas a Raise, spent over a million dollars in one month. The business opposition spent $0 in both states. Both measures passed easily.
Only in South Dakota — where there was some semblance of a coordinated and funded opposition — was the measure close. Here, a minimally funded “vote no” effort emerged. Opposition subsequently increased from 37 percent prior to the election to 45 percent on Election Day. We saw the same thing in 2013 in the blue state of New Jersey. In the space of two months, a small education campaign reduced public appetite for a wage hike from 77 percent to 60 percent.
If business investment in South Dakota had been greater, the “no” side might have won. This is a teachable moment for the business community. If you don’t play, you can’t win.
While action at the federal level may be unlikely in the near term, labor activists will surely ramp up their guerilla state and local campaigns in an effort to duplicate this ballot measure success. And though the turf might be different, the bad arguments that will be used and potential destructive outcomes are the same.
The most interesting piece of the puzzle is that we know what factual arguments work, and when presented to the public they make the right decision. The challenge is to find enough leaders in our community to step up to speak out in favor of jobs for entry level employees instead of the union-funded, free lunch rhetoric that dominates one-sided campaigns.
How will your business respond to minimum wage increases? Join the conversation in the comments below.