Seattle Flirts with ‘Municipal Socialism’ussen
The $15 minimum wage was just the beginning. Now Seattle is trying to build a whole safety net for workers—and triggering a war with its biggest companies.
By Paul Roberts via Politico Magazine
SEATTLE—On an overcast morning in early April, three members of the Seattle City Council arrived to find their cavernous, titanium- and maple-paneled meeting chambers packed to capacity with a noisy, unwelcoming crowd. Many wore T-shirts bearing the message “I drive, I vote.” When the council president tried to open the hearing, one argumentative man kept interrupting so industriously that security had to escort him from the room.
The confrontation had been orchestrated in part by Uber, the ride-share company, as the latest move in its long-simmering war with the city. Almost from the moment Uber chose Seattle as its third test market, back in 2011, the city has sought to put itself between the company and its drivers: first, there had been an ordinance attempting to cap the number of ride-share drivers here; then, in 2015, the City Council passed a law allowing drivers to bargain collectively. Now, the city was considering a law to force ride-share companies to nearly double the base rate paid to their drivers, from $1.35 to $2.40 per mile.
City officials argued the new rate was necessary to ensure that drivers earn Seattle’s $15-an-hour minimum wage. But Uber, king of the budget ride, was having none of it. After blasting an email to its Seattle-area customers warning that the city “wants to double your rates,” Uber dispatched a small army of company-friendly drivers to City Hall to lobby the council in person. Seattle, a city famous for promoting innovation, was innovating in a way that Uber didn’t appreciate.
Yet, it’s the kind of assertiveness that Uber and the rest of corporate America will probably have to get used to. Ever since 2014, when Seattle became the first major municipality to adopt a $15 minimum wage—over the objections of its own business community—the famously left-of-center city has rolled out a series of ambitious, often controversial laws aimed at shielding workers from the chaos of the fast-changing, technology-disrupted urban job market. Today, Seattle’s workers enjoy a list of on-the-job benefits that feels almost European in its scope—everything from a high minimum wage to a ban on last-minute schedule changes to a city-sponsored retirement savings plan. And more are on the way. This year, council members are considering a “bill of rights” for the estimated 33,000 housecleaners, nannies and other “domestics” who work for the city’s population of high earners.
Seattle, celebrated mainly for software, airplanes and overpriced coffee, is now at the forefront of a radical new experiment to see how far a city can go—and should go—to improve the lives of the people who work there. In an era when most economic and political trends are making it harder for workers—such as this week’s Supreme Court “Janus” ruling on public union dues—Seattle is pushing the other way and positioning itself almost as a municipal version of a labor union—pushing for precisely the sort of benefits that unions were built to fight for, before globalization undercut labor’s power. And other progressive cities are doing the same: San Francisco, New York, Minneapolis and Washington, for example, have enacted their own $15 minimum wage laws. In Austin, Texas, and Newark and Morristown, New Jersey, workers now get paid sick leave.
It’s this urban network effect as much as anything that explains why Uber packs Seattle City Council hearings: Novel worker protections that succeed in Seattle become “replicable across the country,” says Mike O’Brien, a City Council member who has led efforts to regulate the ride-share sector. The aggressiveness of Uber’s tactics, O’Brien says, confirms that “we’re onto something.”
Partly, this wave of regulation simply reflects the increasingly liberal tilt of many urban centers. That certainly describes Seattle, a city where a twice-elected socialist City Council member openly calls for a national program of “municipal socialism,” and where even venture capitalists warn of the dangers of rising worker anger. But the push for urban-scale labor policy has a deeper driver. Even as workers face an increasingly unpredictable job market, traditional worker protections are in decline. The labor unions that once fought for those protections have been bleeding members and influence for decades. Federal labor laws have been weakened. Business, meanwhile, enjoys steadily more political power. With Republicans running the White House, Congress and a large majority of state governments, the task of refereeing local labor markets has devolved to the one jurisdiction where liberals still dominate: City Hall.
Just as the union movement of a century ago ran into bitter resistance, however, so does today’s urban-based labor movement have its enemies. City-led initiatives routinely run afoul of state and federal law. And they invariably aggravate the big employers that the cities often depend on for their prosperity. In Seattle, year after year of new workplace laws have fueled a backlash among the business community and fears for the city’s tech-fueled economy; business leaders here say it was Seattle’s labor laws that helped persuade Amazon to look elsewhere for its second headquarters. (Amazon didn’t respond to a request for comment.) At a time when many American cities are tripping over themselves to attract the kinds of companies that call this city home, Seattle has saddled itself with a more complicated challenge: how to help workers who have missed out on that prosperity without alienating the firms that make it possible in the first place.
All of which raises a more fundamental question: Can a city fight inequality? Even in a place as ideologically motivated as Seattle, experts say, urban-scale worker protections can only do so much to fix economic challenges that are almost always regional, national or global in nature. “The problems we face with poverty and inequality are much too broad for any one city to address,” argues Jacob Vigdor, a University of Washington economist who has criticized Seattle’s minimum-wage law. “Imagine there’s a tsunami coming, and you have an umbrella.”
Seattle’s rise as a model for an urban-scale workers’ revolution began on a freezing December evening in 2013, with the arrival of a tired but triumphant crowd of demonstrators on the steps outside City Hall. The group had marched all day from SeaTac, a working-class suburb 16 miles south of Seattle, where, a month before, voters had approved the nation’s first $15-an-hour minimum wage. The activists hoped to replicate that victory in Seattle, a city large enough to create national momentum.
SeaTac takes its name from its biggest employer, the Seattle-Tacoma International Airport, where, for years, unions had tried, and failed, to win higher wages for baggage handlers and other workers. The obstacles were familiar in today’s job market. Thanks partly to deregulation, many airline and airport jobs had been outsourced to non-unionized operators. By 2013, many airport workers earned the state minimum wage, which, though the highest in the nation at $9.19, still paid them barely a third of what unionized airport workers had once earned. The low wages, in turn, contributed to high worker turnover, which undermined unions’ efforts to organize.
Unable to win concessions through traditional labor-management negotiations, in 2013 a statewide group of union organizers and community activists called Working Washington decided to sidestep management altogether. It would campaign to raise the minimum wage to $15. But where past minimum wage campaigns had targeted state and federal lawmakers, with only modest success, Working Washington went small: It lobbied the SeaTac City Council. When the council balked, activists took the question directly to the city’s voters with a ballot initiative in November 2013. After an intensive get-out-the-vote campaign—and despite stiff resistance from Alaska Airlines and other local businesses—the measure passed by a scant 77 votes. When the law took effect, on January 1, 2014, a city that most Americans hadn’t known existed now boasted the highest minimum wage in U.S. history.
For activists, the lesson was clear. At a time when organized labor was struggling nationally, “the venue for innovative worker policy really had to be the cities,” says David Rolf, head of the local Service Employees International Union and a key player in the SeaTac campaign.
That was merely the opening round. Even before the SeaTac vote, Working Washington campaigners had turned their attention to a much larger prize—Seattle. It was a long shot, admittedly: Despite Seattle’s liberal reputation and a strong labor presence, City Hall remained tight with the business community, which vocally opposed the $15 minimum wage as a job destroyer; even the most left-of-center members on the City Council saw $15 as politically impractical.
But campaigners had two advantages. One was something Rolf calls a “progressive infrastructure”—a tight local network of union organizers, social activists and wealthy donors that had emerged from the post-recession, “Occupy” era to advocate for fast-food workers and other low-wage employees.
The second was a highly supportive public. Mainstream Seattleites are hardly radical; most were disgusted by the mask-wearing, window-smashing anarchists who shut down the city during the 1999 World Trade Organization meeting. But city residents were just as appalled to find themselves nearly two decades later in a rich “progressive” town where tech workers earned six figures while 1 in 7 residents lived in poverty. Seattle, as one local pol would put it, had become a place of “people doing really well and people making espresso for people who are doing really well.”
One player who clearly grasped the political implications was an economics professor and Socialist Alternative Party member named Kshama Sawant. A long-shot challenger for Seattle City Council, Sawant adroitly used the $15 issue to energize a large new bloc of voters—young, progressive and skeptical of business. Sawant’s campaign not only carried her to victory; it also helped transform what had been essentially a protest issue into the central theme of the entire 2013 election. By Election Day, even mainstream candidates for mayor and City Council had endorsed a $15 minimum wage—something unthinkable less than a year earlier.
When the council finally voted to enact the wage law, in June 2014 (the increase would be phased in through 2021), the rest of the nation took notice. Within the year, San Francisco, Chicago, San Diego and other cities were pushing ambitious wage hikes, as were several states. Seattle’s “progressive infrastructure” had acquired a potent populist strategy with national potential. “Fifteen in Seattle is just a beginning,” Sawant assured the New York Times. “We have an entire world to win.”
If the $15 campaign jolted American labor politics, it had a deeper effect in Seattle, where progressives gained the power to pursue increasingly ambitious worker protections. In 2015, activists began pushing for a “secure scheduling” law to shield workers from the unpredictability caused by corporate scheduling algorithms. The City Council enacted the measure the following year, becoming the second U.S. city to do so after San Francisco. The confidence of the progressives was breathtaking. When the City Council rejected a union proposal for new protections for hotel workers—among them, panic buttons for housekeepers—organizers end-ran the city with a ballot initiative and won by a 50-plus point margin.
What was emerging was a hybrid form of labor activism. By pushing for measures like secure scheduling, the city itself had taken on many of the functions of a union. But Seattle had also become the vehicle for a resurgent labor movement—one that, energized by savvy populist strategies and progressive urban voters, was now flexing its muscles at the city level.
This hybrid model was on display in the city’s approach to the ride-share industry. In 2014, after Uber and Lyft introduced a short-haul fare that boosted ridership but cut drivers’ earnings, the local Teamsters lobbied the Seattle City Council to take a fairly radical step: a city ordinance allowing ride-share drivers to bargain collectively with their employers.
It was a risky move. Uber and Lyft would fight it tooth and nail. Further, because ride-share drivers are classified as independent contractors, many legal experts believed a local collective bargaining ordinance would run afoul of federal labor law, which traditionally gives collective bargaining rights only to regular employees. As one political insider told me, the Teamsters “essentially got the city to take on all the risk and cost of pushing collective bargaining.”
But the upside was huge. The independent-contractor model is the basis for the gig economy, that ever-larger piece of the job market already associated with falling wages and vanishing benefits. If Seattle’s ordinance prevailed, the implications would go beyond the ride-share industry—and way beyond Seattle. That explains why, when the ordinance was eventually challenged in court, the suit was brought not by Uber or Lyft, but by the U.S. Chamber of Commerce.
Seattle’s role as a national influencer has been embraced by its activists and politicians, who increasingly see urban labor policy as a tool to fill gaps left by state and federal lawmakers. Seattle’s labor initiatives “are very much efforts that are designed to start here and go elsewhere,” says a senior city official. “That is the way they get pitched.”
Critics complain Seattle is engaged in competitive “virtue signaling” with other progressive cities. But it’s also true that the issues Seattle is targeting are the same ones most big cities are facing. For example, the proposed bill of rights for domestic workers goes after wage theft, sexual harassment and other abuses that are rife in the unregulated “nanny” markets that have grown alongside booming urban economies—and are increasingly indispensable to them. For all of the emphasis on the “creative class” in America’s cities, it’s often domestic workers who make it possible for those overachievers to go to work, says Teresa Mosqueda, the council member backing the bill of rights.
Granted, with Republicans controlling federal labor policy, these local initiatives look like outliers. But if America’s political pendulum swings back to labor’s corner—say, if Democrats sweep in 2020—these urban experiments might look more like a trial run. Congress will need fresh policy models to deal with outsourcing, the gig economy and other complicated aspects of the 21st-century workplace. And those models, Rolf believes, will “have already been prototyped at the city and state level.” What Seattle and other like-minded cities are doing, he says, is creating “a proof-of-concept that it can actually work.”
Like any early adopter, however, Seattle is also demonstrating the parts of an urban labor strategy that don’t work so well. In May, the 9th U.S. Circuit Court of Appeals overturned part of the collective-bargaining ordinance and sent it back to a lower court for further review. Seattle may yet prevail, but it likely will be years before the case is resolved.
This threat of legal preemption by a higher political authority poses a serious challenge to urban-scale labor policy. Currently, 41 business-friendly state legislatures have enacted laws explicitly barring cities from regulating ride-share firms, according to the National League of Cities. Twenty-eight states have laws preempting cities from raising the minimum wage. (In 2017, the Missouri Legislature actually cut St. Louis’ minimum wage from $10 to $7.70.) Twenty-three states bar cities from mandating paid sick leave. Earlier this year, Amazon lobbyists reportedly tried, unsuccessfully, to persuade Washington state legislators to ban cities from enacting gender pay equity laws. The motivation, according to one legislator, was Seattle and, specifically, “movement” on the equity issue by council member Mosqueda.
This raises a broader concern—that the city might not be the best venue to address the labor challenges that urban progressives want to fix. In 2016, a team of economists at the University of Washington released a study concluding the minimum wage hike had led some city employers to cut employee hours, costing Seattle 5,000 jobs. Those findings were controversial, and the full effects of the minimum wage hike will be debated for years. Yet the uncertainties around the issue underscore the difficulties cities face as they grapple with complex problems such as wage stagnation in a time of rapid economic change. Vigdor, one of the co-authors of the University of Washington study, points to the complicating effects of new digital “intermediaries,” such as Uber and Amazon, whose success has made it harder for traditional employers to pay higher wages. A city’s minimum wage law can force bookstores to pay their employees more, says Vigdor, but such a law “doesn’t really address the fact that the revenues of the bookstore are plummeting because Amazon is undercutting them on price.”
In the hyperdigital urban economy, Vigdor says, it’s no longer sufficient to move dollars from employers to employees by wage hikes, or even by collective bargaining. What is needed are structural policies that take some of the profits from higher-performing sectors, such as online retailing, and reallocate them to workers in less profitable sectors. But such cross-sector redistribution, says Vigdor, is far more plausible at the federal or state level, via tax policy, than at City Hall.
Still, urban policymakers face a deeper, paradoxical barrier: As a city becomes more prosperous and high-tech, its population of low-wage workers—the workers these labor initiatives are intended to help—will shrink. Espresso-loving Seattle may still take pride in its baristas, but by 2016, “software developer” had surpassed “retail salesperson” as the city’s most common occupation. Even when low-skilled workers do find jobs in a booming city, it’s increasingly unlikely they can afford to live there. In Seattle, the average renter now pays $2,017 a month, more than twice what someone earning $15 an hour can afford.
And those cities that still have large populations of low-wage workers can’t always afford to replicate Seattle’s model. Such an endeavor takes not only a progressive culture, but also enough economic “surplus” to finance laws that impose extra costs. “What really allows this type of policy is very, very strong local economies,” says economist Enrico Moretti, an expert in labor and urban economics at the University of California, Berkeley. By contrast, in urban centers that aren’t booming, such as in much of the Midwest, city economic policy is focused almost entirely on attracting and retaining companies, often by loosening regulations. “Their mindset,” Moretti says, “is, ‘let’s lower costs for potential employers.’”
That mindset isn’t confined to struggling Rust Belt towns. Seattle’s employers may be more prosperous than their Midwestern counterparts, but they are no happier to shoulder the rising costs associated with new labor laws. Although many business owners now concede the $15 minimum wage was less onerous than predicted, they complain bitterly about having to upgrade their entire operations every time the City Council rolls out a new policy. “They change something major every year,” says Ethan Stowell, a Seattle restaurateur with 16 in-city locations and more than 350 workers. “I just don’t like having to redissect my business every 12 months.”
The larger complaint, say Stowell and other business leaders, is the sense that city labor policy is being developed primarily by labor activists, with decreasing input from employers. The result, says Maud Daudon, former head of the Seattle Metropolitan Chamber of Commerce, is an expanding population of frustrated owners and managers who “do not feel represented by their government.” There is growing talk of a political backlash. “We’re going through a cycle right now,” says Stowell, who suggests that, over the next two to four years, as pro-labor council members come up for reelection, “it’ll be a different story.”
That political reckoning may already be underway. In June, the City Council was forced to repeal a newly enacted “head” tax on its largest firms after Amazon led a citywide corporate revolt. Technically, the rebellion wasn’t over a labor initiative—the tax will fund homeless services. But many in the business community say corporate patience had already been worn thin by years of labor laws—and by business’ constant vilification by city activists. (Posters for May Day demonstrations this year featured Amazon CEO Jeff Bezos’ head on a pike.)
The dispute had boiled over in May, after Amazon protested the tax by halting construction of an office building downtown. The move shocked the political establishment, and, predictably, led to protests by progressive activists. But it sparked even larger protests by unionized construction workers fearful of job losses from the Amazon shutdown. Over the course of two surreal days, Seattle media were filled with images of hard-hatted ironworkers demonstrating noisily on the steps to City Hall. It was a startling contrast to the scene from four years earlier, when minimum-wage campaigners had gathered on those same steps—and it offered a stunning rebuke to a city that has styled itself as the refuge for the modern worker.
Yet, for all the recent trials, Seattle shows no signs of slowing down. The domestic workers’ bill of rights continues to gain momentum. The city continues to focus on Uber and other ride-share companies: The proposal to double the base rate offers a fallback if the collective bargaining ordinance dies in court, and one that council member O’Brien thinks is just as likely to catch on in other cities. Meanwhile, other cities like Minneapolis, New York and San Francisco continue their own urban-scale initiatives.
Cynics might say such doggedness merely confirms that progressive cities remain in the thrall of labor activists. But many of the workplace problems that launched the urban labor movement five years ago are just as pressing today. Urban job markets are becoming harder for low-wage workers—not least as more and more low-wage jobs fall to automation. Many of these problems would be better tackled at the federal level. Yet officials in Seattle and other big cities see few signs that federal action is imminent. To the contrary, with federal courts increasingly unfriendly to labor’s agenda, workers can expect less help from the national government. That means, for now at least, that cities are the ones left to carry on the fight. “You can say, theoretically, the way you really want to do this is wait for the federal government to change some rules,” says O’Brien. “But we can’t wait around while these guys starve to death for that to happen.”