Quiet politics and the minimum wage

As a result of the ‘Voor 14’ campaign of Dutch trade union FNV, political parties started listening to voters instead of corporations, which resulted in an 8–20% increase in the minimum wage. In an article in Transfer, I analyse the electoral mechanisms involved, and present a way to explore the feasibility of such a strategy in advance. Below I summarise the article.

Quiet politics

Over the past decades, the relative value of the Dutch minimum wage has declined considerably. This is surprising, since a broad majority of voters support raising the minimum wage. And this is not an isolated case: research has found that government decisions mainly reflect the preferences of voters with high incomes and more years of education. This raises the question of how political parties can get away with policies that go against the preferences of large groups of voters, without being voted out of office. The answer is by keeping issues off the political agenda, so that voters won’t think about them when deciding who to vote for.

One way to keep issues off the agenda is to present them as technical matters best left to experts. In the Netherlands, a key role is played by the Netherlands Bureau for Economic Policy Analysis (CPB). The CPB uses economic models to predict economic and budget outcomes of the election manifestos of mainstream political parties. These models assume that a higher minimum wage will have negative effects on employment and the government budget. This makes it politically risky for parties to include such a measure in their manifesto. However, the assumptions used by the CPB are subject to debate: many studies find that raising the minimum wage doesn’t have much of an effect on employment.

Another way to keep issues off the political agenda is to redefine them. In the Netherlands, income issues are often redefined as issues concerning the purchasing power of specific groups, best addressed with targeted measures such as tax deductions or benefits provided by municipalities. Because of their assumed efficiency, the CPB evaluates such targeted measures more positively than minimum wage increases. However, they are complex to administer, overhead costs are high and take-up is often low. Importantly, their effect is limited to specific groups. As a result, they can be lowered or withdrawn without serious risk of political backlash.

Pepper D. Culpepper has introduced the term ‘quiet politics’. When an issue remains under the radar, businesses can pursue their interests through behind-the-scenes lobbying. However, when the debate about an issue becomes ‘noisy’, voters will start to pay attention, and political parties will have to pay attention to voters as a result. That was the goal of ‘Voor 14’ (now Voor 16) campaign launched by the FNV in 2018: make sure that the minimum wage would be on the political agenda by 2020, so that parties would have to address this issue in their manifestos for the 2021 election.

Understanding voter behaviour

To understand the feasibility of such a strategy, we needed to understand what effect it might have on voters. Is it plausible that voters will switch to other parties? Will this effect be large enough to result in a majority in Parliament for a higher minimum wage? We explored these matters using data from the Dutch Parliamentary Election Study (DPES) and the concept of ‘consideration sets’.

Voters frequently switch from one party to another, but not randomly: they tend to stick to parties that are consistent with their values or ideology. Voting decisions can be thought of as a two-step process. First, voters form a consideration set of parties they might consider voting for in the future. Second, they pick one of those parties to actually vote for. Consideration sets tend to be fairly stable and can be studied using survey questions.

We defined a group of ‘potential switchers’: voters who 1) have voted for a party that doesn’t support a higher minimum wage, but who 2) have at least one party in their consideration set that might support a higher minimum wage, and who 3) agree that the government should take measures to reduce income inequality. The rationale is that these are voters who might plausibly switch from a party that doesn’t support a higher minimum wage, to one that does, as a result of the campaign. It turned out that 20% of the electorate could be classified as potential switchers. Even if all those potential switchers would actually do so, this would not be enough to create a majority in Parliament for a higher minimum wage.

However, we reasoned that a second mechanism might help bring about a majority. Several political parties had a substantial share of potential switchers among their voters. This means that they would risk meaningful vote losses if the minimum wage would come to play a role in voting decisions. Parties might want to avoid such vote losses by changing their position and start supporting a higher minimum wage. We concluded that the campaign might lead to a majority in Parliament through this second mechanism.

The campaign and its effects

The emphasis in the Voor 14 campaign is not on interacting directly with politicians, but on starting a debate about the minimum wage among voters and in the media. In my article, I focus on activities until March 2021. These included community organising, digital organising, public actions, publishing an economic analysis and a book, contacting city councils, introducing Fat Cat Day in the Netherlands, and including a wage floor of 14 euro in the FNV’s collective bargaining agenda.

Prior to the Voor 14 campaign, raising the minimum wage had not been on the political agenda. There have been proposals to raise it in 2009 and 2018, but these were largely ignored by other political parties and the media. The national launch of the Voor 14 campaign on 14 April 2019, however, elicited responses from employers’ organisations, political parties and academics. Organisations such as women’s and church organisations joined the FNV in demanding a higher minimum wage. Political support for a higher minimum wage grew.

By 2020, political parties could no longer afford to ignore this issue. Consistent with the second mechanism of our feasibility analysis, almost all parties included a higher minimum wage in their election manifesto, including parties that had previously not been inclined to reduce income inequality. After the election, the new government decided to raise the minimum wage, which it presented as the first such measure since the introduction of the minimum wage in 1969. Meanwhile, the FNV campaign is ongoing: as far as the FNV is concerned, the minimum wage needs to be considerably higher still. Voters agree.

The full article is available here.