By: Amanda Froelich,
After much debate and many sources citing the benefits of raising the minimum wage, one location in the US has decided to adopt change. Seattle recently announced its plans to raise the minimum wage to $15 over the coming years. The deal was forged by Mayor Ed Murray and blessed by labor and business groups alike, reported KiroTV last Thursday.
This new pay floor will phase in at different speeds for businesses of different sizes, but by the end of the decade, all employers will have to meet the $15 minimum wage. Those businesses with more than 500 employers nationwide will have a three year phase-in period, while smaller employers get five years to ratchet up their pay scales.
Once the $15 hour minimum is achieved, the city’s minimum wage will automatically climb to match the rate of inflation. Even among states with relatively strong minimum wage payout laws, automatic increases are uncommon. The deal made on Thursday will make Seattle the national leader on municipal minimum wage laws. At the present, Washington currently has the highest pay floor of any state, with a minimum of $9.32 an hour.
According to one source, this deal was a long time coming. Mayor Murray first indicated that he wanted to establish a $15 floor back in September during the mayoral campaign. He created the 24-member advisory group that crafted the compromise package back in December, and the local business owners, restaurateurs, and labor leaders have been grinding toward an agreement the past four months.
Given the deal’s provision for tipped workers, the approval from restaurant owners is especially noteworthy. 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 an hour or more.
Activist coalition 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. And another coalition, 15 for Seattle, issued a press release the same day 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.” The ballot created by Sawant 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 the two members of the working group who oppose the deal announced Thursday, according to a source close to the negotiations. The other opposing member 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. Hanauer 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.
At the present, there are 102,000 workers in Seattle currently earning less than $15 an hour. Raising their 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.”