The New York Times
By: Annie Lowrey
April 6, 2014
In January, Teresa Fuentes's employer told her she could work no more than 30 hours a week preparing burgers and passing out food at the drive-through for about $9.50 an hour.
It was just the latest blow to her already-fragile household finances. Ms. Fuentes, 47, had missed work to take care of an eye infection for which she could not afford the prescription drops. She is struggling to take care of her two children, reliant on a local food bank, working two jobs and behind on her bills.
"It's very stressful for me," Ms. Fuentes said. "Things are just so tight."
For Ms. Fuentes and thousands of other workers like her, some relief may be on the way. The Seattle City Council is intensely debating a plan to raise the minimum wage to $15 an hour from $9.32 -- forging ahead on its plan to tackle income inequality as efforts in the nation's capital have languished.
"The accumulation of 30 years of rising income inequality is finally having its impact," said Mayor Ed Murray, sitting in his glass-walled office overlooking Puget Sound. "People can't afford to live a decent life."
Local policy makers "can't just wait for Washington," said David Rolf, the president of the local Service Employees International Union chapter.
But economists from across the political spectrum warn that the policy choices available to local governments might, at best, do little more than soften the blow from rising inequality.
"Cities just don't have the tax and trade policy and tools to rein back inequality in a significant way," said Alan Berube, a senior fellow at the Brookings Institution in Washington, D.C. "They can't really redistribute income in the way the federal government can, so they are reaching for the levers they have."
Nonetheless, the movement at the local level goes well beyond Seattle. In New York, Mayor Bill de Blasio, who campaigned on a platform of fighting inequality, has won support for expanding preschool education but has run into obstacles at the state level to tax the rich more to pay for programs aimed at the poor.
Cities including Atlanta, Boston, San Francisco and Los Angeles are also considering proposals to tackle inequality, such as bolstering programs for public education, transportation, affordable housing and wages.
This patchwork effort comes as the fortunes of the haves have diverged even more from those of the have-nots across the country. The top 1 percent of households has captured about 95 percent of the income gains eked out during the tepid recovery from the Great Recession. And inequality has increased in 94 of the country's 100 biggest metropolitan areas since 1990, growing especially wide in the last few years.
In Seattle, as in many cities with a vibrant technology sector or a thriving financial industry, the increase in income inequality has been particularly sharp.
In 1990, the average household in the top 10 percent of the income distribution in the Seattle area made about eight times as much as the average household in the bottom 10 percent earned. Now, it earns about 11 times as much. The earnings of the very richest households have diverged sharply from those in the middle, too.
Today, million-dollar condominiums are selling at a record pace downtown, Amazon is working on a gleaming new office featuring glass geodesic domes, and boutiques and high-end restaurants draw a well-heeled crowd. But high rents and stagnant wages are increasingly pushing out middle-class and low-income families like that of Ms. Fuentes, further worsening the city's inequality.
Seattle's politicians -- who generally range from left to far-left -- said the result had been a less inclusive and less fair city. "There's been a forced exodus of low-wage workers," said Kshama Sawant, the City Council member who is leading the push for the $15 minimum wage. "Life is very hard for a large majority of people, and there's a burning anger about these things."
Local politicians across the country have echoed that thought, and pushed for local governments to start where the federal government has stopped. "President Obama is our greatest partner," said Mayor Betsy Hodges of Minneapolis after attending the State of the Union address in January. "He knows that given the gridlock in Congress, cities are where we can make progress on the goal of reducing inequality."
In Seattle, the fiercely contested $15 minimum wage is seen as only a first strike against income inequality in the city. "These trends won't change and inequality will grow," said Mr. Murray, the Seattle mayor, "unless democratic institutions come in and correct them."
But local officials -- and economists -- said that the federal government would be better at alleviating some of the effects of income inequality than state or local governments, given its capacity to touch inequality's root causes, like globalization and technological change.
"Most localities are very restricted in the kinds of stuff they can do," said Edward Glaeser, an economist at Harvard, noting that cities generally have little or no control over the tax code and large benefit programs like Social Security, Medicaid and Medicare. It is those policies that have the biggest effect on inequality by far, he said.
But while aggressive city policies will not accomplish what aggressive national policies would, they might at least have a muted effect, officials say.
Mary Jean Ryan, a former policy chief for the city of Seattle who now leads a local education nonprofit, agreed that local governments had an important role to play. "The pace of change is too slow given the forces we're confronting," she said. "We have to accelerate the progressive policy adoption if we're going to help more of our community share in prosperity."
The most powerful policies for cities are most likely to be aimed at encouraging the middle class to remain there rather than moving to the suburbs, Mr. Glaeser said, by supporting more affordable housing, improving schools and expanding public transportation.
"The places that have high inequality almost by definition have a small middle class," Mr. Berube of Brookings said. "There's this crater in the middle; they're trying to keep their cities affordable and livable for the middle class."
For Seattle, the proposal to lift the minimum income to $15 an hour is supported by more than half of city residents, but is facing stringent opposition by local businesses, some of which favor a more modest increase. City officials have promised a quick vote on the measure.
"When you jump to $15, you change the game substantially," said Richard Davis of the Washington Research Council, a local think tank. "Automation becomes a more attractive substitution than when you're making a more incremental increase." Businesses might move beyond the city limit, and inequality might even jump.
But politicians like Ms. Sawant contend that local policies to raise wages and preserve a middle class are necessary to counteract the broad trend.
"Are families going to be able to work here?" she said. "That's the question."