Efforts to boost the minimum wage made real progress this week. California just approved an increase to $15 an hour by 2022, with New York close behind. This more than doubles the federal minimum wage of $7.25 an hour. If extended nationally, the new $15 minimum would benefit more than 50 million Americans.
Large national business organizations have strenuously opposed raising the minimum wage. The U.S. Chamber of Commerce couches its opposition in worker-friendly terms, saying that "minimum wage increases end up hurting the people they're intended to help." The National Federation of Independent Businesses is more blunt: "Raising the minimum wage will kill jobs and stifle economic output" said a spokesperson last year.
To listen to these two business groups, you'd get the impression that businesses all over the country are up in arms. But a poll conducted by the research firm of Frank Luntz, a leading GOP messaging guru, says that's not so. Luntz has spent decades advising GOP candidates and elected officials on political communications. His impact on the Republican message goes back to Newt Gingrich's "Contract with America."
LuntzGlobal recently surveyed American business executives, mostly owners and CEOs, for the Council of State Chambers. The study was leaked and is now publicly available. It shows that – far from opposing a minimum wage hike – business leaders support it, by a lopsided margin of 80 percent to 8 percent. (Twelve percent were neutral.)
The Luntz poll contacted 1000 C-suite executives, 73 percent of whom said they are owners or CEOs. Half of them head small businesses (with less than $50 million in annual revenue); the rest lead midsize or larger companies.
The Luntz poll is not entirely new news. Several earlier polls, including one done jointly by the American Sustainable Business Council and Business for a Fair Minimum Wage, also found strong support for a higher minimum wage among businesses owners. But it's nice to have confirmation from a pollster with deep ties to Republican elected officials who oppose a higher minimum wage.
Why is there such a discrepancy between what business owners say they want and what business organizations say, supposedly on behalf of their members?
First, there's a genuine difference of opinion among business owners depending on the scale, location and type of businesses they operate. Businesses that operate mostly locally (like brick-and-mortar retail and many service businesses) are more inclined to recognize that employees are also customers. They support a higher minimum wage because it lifts up the whole local economy. Businesses that operate in higher-cost cities and regions of the U.S. already pay most of their people more than the federal minimum wage. Raising the required minimum doesn't raise their costs much. Likewise, businesses that hire mostly workers with advanced skills already pay well above the minimum.
When we sort through these differences, it becomes clear that the handful of businesses now fighting a higher minimum wage fit a certain pattern: big employers of less-skilled workers, operating in poorer parts of the country. This relative handful of companies attempts to speak for all business everywhere and seeks to drive the debate.
Although only 8 percent of business leaders oppose a higher minimum wage, these holdouts are determined. They have a lot at stake economically given the size of their workforce. They have substantial budgets for lobbying, campaign contributions and issue advocacy. And they know how to funnel this money through nonprofit organizations to keep their names out of the public eye as they fight a higher wage.
Five hundred years ago the Italian political philosopher Machiavelli described the problem starkly:
"[T]here is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things," he wrote. "For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order."
That was written back in 1513. It remains true today.
David Brodwin is a co-founder and board member of American Sustainable Business Council. This blog is adapted from a column recently published in U.S. News & World Report April 8, 2016.