Author: Jason
Policy diffusion is the process in which a policy innovation spreads from one government jurisdiction to another. According to Shipan and Volden (2008), there are four mechanisms of policy diffusion: learning, competition, imitation, and coercion. Expanding upon Addo's precis, this essay will explore Shipan and Volden's generalized findings that were extrapolated from their study on the four mechanisms of policy diffusion and local anti-smoking laws, and discuss whether some of these generalizations may be transferable to explain the recent diffusion of local minimum wage increases in the United States.
Since 2009, the federal minimum wage in the United States has remained unchanged at $7.25 per hour. However, federal minimum wage law sets only the nation's wage floor and permits the states to establish their own minimum rates. Additionally, some states allow their cities to have minimums that exceed the state's wage floor. Whether it be the local, state or federal level, employers are subject to pay their workers the highest minimum rate applicable to their specific locality. Since the last federal minimum wage increase, state and local governments have been increasingly adopting higher minimum wages. For instance, only two local governments from 2003 to 2009 increased their minimum wages; whereas from 2009 to the present day, nearly 35 city and county ordinances have been passed to increase local minimum wages.
Although minimum wage law may not seem like a policy innovation, I believe it is applicable to policy diffusion theory. Shipan and Volden assert that policy innovation "occurs when a government - a national legislature, a state agency, or a city - adopts a new policy." Similarly, Berry and Berry (2014) state that "the dominant practice in the policy innovation literature is to define an innovation as a program that is new to the government adopting it." Therefore, I argue that minimum wage increases across localities in the U.S. can be considered "new policy changes" (which are differentiated from policy inventions) adopted by each respective jurisdiction, making them appropriate for examination using the policy diffusion mechanisms.
Shipan and Volden define imitation as smaller cities copying the policies of larger neighboring cities. They find that "the effect of imitation fades over time while other mechanisms' effects are more persistent." Since imitation generally occurs when jurisdictions share similar ideological and partisan orientations (Grossback et al., 2004), this finding essentially means that smaller cities in their study adopted new anti-smoking policies over time due to learning, economic competition and coercion as opposed to simply imitating larger cities with similar ideological/partisan alignments. After a cursory review of the many cities in California that have adopted higher minimum wage laws, it would be interesting to see if this finding about imitation holds because a handful of smaller jurisdictions passed minimum wage increases either during the same year or the year after certain larger cities (such as San Diego and San Francisco) adopted new wage minimums. Moreover, San Jose was the first city of the new wave of local minimum wage increases in California - which passed two years prior to any other local minimum increase - which makes me think that learning and competition from San Jose, rather than imitation, were key to long-term diffusion in other municipalities throughout the state (NELP, 2016).
Shipan and Volden also find that small and large cities are equally susceptible to coercion from the state government. Coercion occurs when higher levels of government influence the actions of lower levels by forcibly taking the lead in that policy area. Connecting this finding to the recent upsurge in local minimum wage hikes, it appears that many cities are indeed equally susceptible to state coercion, especially considering that “sixteen states now have laws forbidding local municipalities from raising their wage floors, with Michigan being the latest to pass one this year” (Quinton, 2015). Nonetheless, I find coercion to be the least telling of the diffusion mechanisms because larger cities are generally more expensive and conflict-ridden (denser and more heterogeneous), which affords them greater political and lobbying power to influence decisions made at the state-level that direct impact their jurisdictions. For example, New York State’s recent minimum wage legislation raises the minimum wage in New York City to $15 in 2020; however, the state-wide minimum wage is only $12.50 for that same year.
Furthermore, Shipan and Volden conclude that "compared to small cities, large cities are more likely to learn from others' experiments, and are less likely to simply imitate the policies of others or to be deterred in their actions by potential economic competition." Learning arises when there is a determination of whether a policy adopted elsewhere is successful; and competition is when cities consider the economic effects (positive/negative spillovers) of the adoption, or the lack of adoption, by other jurisdictions. Accordingly, these findings suggest that larger cities have a greater capacity and better resources than smaller cities to make more informed and closer-to-optimal policy decisions. When applied to local minimum wage laws, these findings seem to reinforce the logic that a state’s large urban cities are much different socially, politically, and economically than the state’s smaller but more prevalent suburban and/or rural cities; and thus, large urban cities should have discretion over the level of their minimum wage.
In conclusion, while devolution/decentralization allows local governments to become “laboratories of democracies” that foster innovation and best practices, most cities are constrained by their state governments to experiment and demonstrate the feasibility of higher local minimum wages. As state and local minimum wage laws continue to change around the country, I second Shipan and Volden’s notion that “undercovering the mechanisms of policy diffusion is crucial to understanding when the devolution of policy control to states and localities is desirable.”
External Sources
National Employment Law Project. (2016). City minimum wage laws: recent trends and economic evidence.
Quinton, S. (2015, July 13). States battle cities over minimum wage. The Pew Charitable Trusts.
Policy diffusion is the process in which a policy innovation spreads from one government jurisdiction to another. According to Shipan and Volden (2008), there are four mechanisms of policy diffusion: learning, competition, imitation, and coercion. Expanding upon Addo's precis, this essay will explore Shipan and Volden's generalized findings that were extrapolated from their study on the four mechanisms of policy diffusion and local anti-smoking laws, and discuss whether some of these generalizations may be transferable to explain the recent diffusion of local minimum wage increases in the United States.
Since 2009, the federal minimum wage in the United States has remained unchanged at $7.25 per hour. However, federal minimum wage law sets only the nation's wage floor and permits the states to establish their own minimum rates. Additionally, some states allow their cities to have minimums that exceed the state's wage floor. Whether it be the local, state or federal level, employers are subject to pay their workers the highest minimum rate applicable to their specific locality. Since the last federal minimum wage increase, state and local governments have been increasingly adopting higher minimum wages. For instance, only two local governments from 2003 to 2009 increased their minimum wages; whereas from 2009 to the present day, nearly 35 city and county ordinances have been passed to increase local minimum wages.
Although minimum wage law may not seem like a policy innovation, I believe it is applicable to policy diffusion theory. Shipan and Volden assert that policy innovation "occurs when a government - a national legislature, a state agency, or a city - adopts a new policy." Similarly, Berry and Berry (2014) state that "the dominant practice in the policy innovation literature is to define an innovation as a program that is new to the government adopting it." Therefore, I argue that minimum wage increases across localities in the U.S. can be considered "new policy changes" (which are differentiated from policy inventions) adopted by each respective jurisdiction, making them appropriate for examination using the policy diffusion mechanisms.
Shipan and Volden define imitation as smaller cities copying the policies of larger neighboring cities. They find that "the effect of imitation fades over time while other mechanisms' effects are more persistent." Since imitation generally occurs when jurisdictions share similar ideological and partisan orientations (Grossback et al., 2004), this finding essentially means that smaller cities in their study adopted new anti-smoking policies over time due to learning, economic competition and coercion as opposed to simply imitating larger cities with similar ideological/partisan alignments. After a cursory review of the many cities in California that have adopted higher minimum wage laws, it would be interesting to see if this finding about imitation holds because a handful of smaller jurisdictions passed minimum wage increases either during the same year or the year after certain larger cities (such as San Diego and San Francisco) adopted new wage minimums. Moreover, San Jose was the first city of the new wave of local minimum wage increases in California - which passed two years prior to any other local minimum increase - which makes me think that learning and competition from San Jose, rather than imitation, were key to long-term diffusion in other municipalities throughout the state (NELP, 2016).
Shipan and Volden also find that small and large cities are equally susceptible to coercion from the state government. Coercion occurs when higher levels of government influence the actions of lower levels by forcibly taking the lead in that policy area. Connecting this finding to the recent upsurge in local minimum wage hikes, it appears that many cities are indeed equally susceptible to state coercion, especially considering that “sixteen states now have laws forbidding local municipalities from raising their wage floors, with Michigan being the latest to pass one this year” (Quinton, 2015). Nonetheless, I find coercion to be the least telling of the diffusion mechanisms because larger cities are generally more expensive and conflict-ridden (denser and more heterogeneous), which affords them greater political and lobbying power to influence decisions made at the state-level that direct impact their jurisdictions. For example, New York State’s recent minimum wage legislation raises the minimum wage in New York City to $15 in 2020; however, the state-wide minimum wage is only $12.50 for that same year.
Furthermore, Shipan and Volden conclude that "compared to small cities, large cities are more likely to learn from others' experiments, and are less likely to simply imitate the policies of others or to be deterred in their actions by potential economic competition." Learning arises when there is a determination of whether a policy adopted elsewhere is successful; and competition is when cities consider the economic effects (positive/negative spillovers) of the adoption, or the lack of adoption, by other jurisdictions. Accordingly, these findings suggest that larger cities have a greater capacity and better resources than smaller cities to make more informed and closer-to-optimal policy decisions. When applied to local minimum wage laws, these findings seem to reinforce the logic that a state’s large urban cities are much different socially, politically, and economically than the state’s smaller but more prevalent suburban and/or rural cities; and thus, large urban cities should have discretion over the level of their minimum wage.
In conclusion, while devolution/decentralization allows local governments to become “laboratories of democracies” that foster innovation and best practices, most cities are constrained by their state governments to experiment and demonstrate the feasibility of higher local minimum wages. As state and local minimum wage laws continue to change around the country, I second Shipan and Volden’s notion that “undercovering the mechanisms of policy diffusion is crucial to understanding when the devolution of policy control to states and localities is desirable.”
External Sources
National Employment Law Project. (2016). City minimum wage laws: recent trends and economic evidence.
Quinton, S. (2015, July 13). States battle cities over minimum wage. The Pew Charitable Trusts.