http://thinkprogress.org/economy/2014/05/01/3433227/seattle-15-dollar-minimum-wage/

Seattle will raise its minimum wage to $15 an hour over the coming years under a deal brokered by Mayor Ed Murray and blessed by labor and business groups alike, city leaders announced Thursday afternoon.

The new pay floor will phase in at different speeds for businesses of different sizes, but all employers will have to meet the $15 minimum wage by the end of the decade. Businesses with more than 500 employees nationwide will have a three-year phase-in period, while smaller employers get five years to ratchet up their payscales.

After reaching $15 an hour, the city’s minimum wage will automatically climb by 2.4 percent each year regardless of the rate of inflation. Even among states with relatively strong minimum wage laws, automatic increases are uncommon. Thursday’s deal will make Seattle the national leader on municipal minimum wage laws. Washington currently has the highest pay floor of any state at $9.32 per hour.

The deal was a long time coming, with Murray first indicating he wanted to establish a $15 floor back in September during the mayoral campaign. Murray created the 24-member advisory group that crafted the compromise package back in December, and the group of local business owners, restaurateurs, and labor leaders has been grinding toward an agreement for the past four months.

Approval from restaurant owners is especially noteworthy given the deal’s provisions for tipped workers. Tips can only be counted toward worker minimum pay for the next five years. After that, the separate minimum hourly pay rates for tipped and non-tipped workers will disappear, and all employees citywide will have to be paid $15 hourly or more.

An activist coalition called 15 Now led by the lone socialist member of the City Council, Kshama Sawant, has pledged to put an immediate wage hike before city voters in November if the deal falls short of the group’s goals. Another coalition, 15 For Seattle, issued a press release Thursday saying that “many of the coalitions 100+ progressive members have already endorsed” the deal but that others “are taking the Mayor’s proposal back to their organizations for review and approval.” Sawant’s ballot initiative would let employers with fewer than 250 workers phase in higher wages over three years but impose the $15 rate immediately for larger businesses.

Sawant is one of two members of the working group who is opposing the deal announced Thursday, according to a source close to the negotiations. The other is Craig Dawson, the owner of a payments processing company called Retail Lockbox. The head of the city’s Chamber of Commerce is abstaining. But the 21 votes in favor include representatives from two separate chapters of the Service Employees International Union (SEIU), the United Food and Commercial Workers (UFCW) chapter, and the MLK Labor Council, as well as local hotel owners, restaurant owners, a pair of Councilmen, and the venture capitalist Nick Hanauer, who has made a name for himself in recent years as a wealthy champion of economic policies that focus on the middle class rather than on business owners and the wealthy.

There are 102,000 workers in Seattle currently earning less than $15 an hour. Raising those people’s wages will put about half a billion extra dollars of spending money into Seattle workers’ pockets. As SEIU 775 president and coalition co-chair David Rolf said in a statement Thursday, the deal “will pump nearly $500 million into Washington’s economy, proving that a higher minimum wage fuels business and job growth.”


And I'll submit ....on the same day Seattle McDonald's announces it's new Dollar Menu:
Kethcup, Salt, Napkin, a Straw, & Receipt.

While great for workers trying to make ends meet in expensive place to live, I cant help but think that this will make a lot of potential business owners think twice about opening up shop in Seattle.

your thoughts?

After reaching $15 an hour, the city’s minimum wage will automatically climb by 2.4 percent each year regardless of the rate of inflation.


I would love to get a 2.4% increase every year regardless of inflation.

I coach HS basketball and calculated my "hourly" wage based on my contract salary and time spent....less than $8 an hour. But, HS coaches don't coach for the money anyway.

In an sick and twisted way, I'm kinda ok with this.

I'm totally for limited "design for experiments" test cases that prove something doesn't work. Bring it on. I have my "told you so's" all ready to go.

It's just a shame the test case will be in our own backyard and hit us in the wallet (and while reducing service, selection, quality and customer experience). I'd much prefer it was tested in LA or San Fran but I digress...

Politcal operatives are licking their chops as they invent new ways to put WA in the family of Red.

I could care less about Wal-Mart, Coscto and the like.

However, this is going to be tough for some of the small business owners....

Are you saying that Costco pays below $15 an hour. I can remember a few years ago at a shareholder meeting there was complaints that Costco paid to much per hour.

Nope, I am sure they pay well. What I was trying to say (very poorly) was that the larger companies will be able handle this much easier. I just feel the very small businesses will be the ones hurt the most.

An interesting aspect of this is the fact that there are quite a few State jobs with wages below $15 per hour. That suggests that there will need to be a wholesale revision of the State salary schedule, at least for positions located in Seattle. City of Seattle, and maybe even King County offices located in Seattle probably also have positions under the $15.

This won't solve any problems. It's a Pandora's box.

Which is exactly why I want it to happen. Theory only works in theory. Watch what happens. Design for experiment - prove it. It will be proven incorrect and the national stage can move forward. Margaret Thatcher.

Yeah - because politicians always fix things that are complete failures.




The War on Drugs and I had a little laugh about that one.

I know, I'm being a smart ass and that's the real risk you run. When it doesn't work, they'll say because it wasn't enough, so it should be $20.

If you ask me, this all comes down to the price of a gallon of gasoline, the ultimate weapon in the war on the middle class. Since the price of gas started going up, the cost of everything else has followed suit. Simple equation: when it costs more to transport goods, suppliers have to pass a lot of that cost down to their buyers (businesses, small and large). Most retail businesses make a small profit on their sales, so they can only eat so much of that cost without passing it on to their customers. This is especially true in the case of restaurants and other low margin businesses (the sort that typically pay minimum wage, because that's all they can afford). The true meaning of trickle down economics....

People that work for minimum wage have long been in a near survival mode, spending the vast majority of their earnings on bare essentials (rent, bills, food, and an occasional bottle of cheap booze or beer to wash down the misery). A notable commodity that fits in that essential category for most people is gasoline. A lot of that cost can be avoided in cities with good public transportation (Seattle's is pretty good), but for many, a car is a necessity to get to work, and even those who can ride a bus to work are subject to constantly rising costs for living essentials.

When I was cooking for a living, I worked a lot of near minimum wage jobs. This was in the mid-90s and early 2000s, when gas cost me an average of about $1.25/gallon. Even at that price, it was a significant expense, but it was bearable. I never had money to throw around, but I had what I needed most of the time, and when I didn't, I just took another part time job until I got back to even. Now that gas costs 3x as much or more, rents are up about 25%, and the cost of food has about doubled, while minimum wage has increased less than 50%, I can't imagine how the current minimum wage would allow a person to sustain even a minimal lifestyle. I think $15/hr. is probably about what it would take to stay fed, clothed, sheltered, and gassed up in Seattle these days, so from the worker's perspective, I think this makes sense.

Then, there is the small business owner's perspective, which is quite different indeed. I never felt like minimum wage was fair compensation for busting my a$$ in hot kitchens, often for 12 or more hours a day, but I fully understood, especially in the case of small, family-owned restaurants, that I was being paid as much as the business could afford to pay me while making modest (at best) profits. I also enjoyed the work most of the time, and that made it seem more worthwhile.

Anyway, the point is that while I think $15 is probably about right for minimum wage in Seattle, I realize that many businesses won't be able to pay it without either giving up their profits (which means going out of business) or raising their prices to a point at which they start losing customers, many of whom are scraping to get by themselves these days, and eventually are forced out of business. That all adds up to more bad news for the middle class, since a large percentage of the middle class has been small business owners all along, and they're steadily losing their ability to compete with big business in almost every major market.

Meanwhile, big oil corporations are enjoying record profits and conspiring with the rail tycoons to flood our seaports with oil and gas destined for points near and far, which will, by the laws of supply and demand, drive up the cost of fuel (and everything that depends on it to get to market) here at home, and traders on Wall Street are all laughing all the way to big banks (actually, most of those guys probably have enough sense not to do business with the big banks, but I had to write that for effect).

So who's the greater threat to small business and the middle class: a socialist city council member in Seattle who wants people to have enough money to sustain themselves (okay, maybe a little more than that), or corporate 'Merica and their government puppets?

Flea-
I totally respect your reply. It made me think about compensation within my own company, which varies widely by geographical location and is a relative factor in this conversation.

Where I work a Software Engineer in Seattle earns more than an Engineer in Atlanta ,New Jersey, or Dallas, but might earn less than and Engineer in San Francisco. They might all do the exact same job, but these differences of pay are by-design to match local cost of living standards & consequently the pay scales are loosely based upon cost of living norms in each area. Adjusting normalized pay to match the costs of living differences in that area is basic economics, and in some ways you can say from this perspective Seattle got it right.

In this day and age $15/hr is scraping by. I'm having a hard time figuring out why some are considering this an excessive wage.

If you have a car payment or student loans and pay rent, there will be almost no ability for someone to save or invest money. This is especially true in Seattle where the cost of living is very high. This would explain why a record number of people in their 20s are living with their parents.

The underlying issue here is people aren't concerned about workers or the general populace; they're concerned about business owners' profit.

Raising the minimum wage will simply decrease the number of those employed at those wages. The math is simple, and this economic "law" is undeniable.

So, SOME workers who haven't lost their jobs will benefit from this. Others will be harmed because instead of being paid low wages, they will be paid no wages.

IMO, this action will solve nothing. It will just move hardship from one person to another. You don't fix a sinking ship by putting a hole in the other side.

Not sure how this will all work out in the end...but one thing is for 100% certain...every time the naysayers have flipped their lid over some action that is going to ruin the economy and make the US a third world country they have been completely and utterly wrong.

Every single time, with every single labor law, with car mpg laws, with emissions laws, with pollution laws...every single time they have been wrong.

With that track record I have a hard time accepting that they are right this time.

Fish on...

Todd

Hunk's feelings are hurt now.

I got my first "job with a paycheck" in 1965 at the then minimum wage of $1.25/hr. In the run up on raising the minimum wage I read that if it had kept up with inflation, the minimum wage today would be $21/hr, not the $15 being sought. I haven't calculated it myself, so I don't know if that's true. However it does seem like the lowest paid workers have fallen behind when it comes to keeping up with the cost of living, in Seattle, and anywhere.