Seattle Passes $15 Minimum Wage: The Resurgence of Minimum Wage Debates

06-09-14 Minimum_wage pic

On June 3rd, Seattle Mayor Ed Murray signed a new ordinance raising Seattle’s minimum wage to $15 per hour. The new minimum wage will be implemented in phases, and by 2021 will be in full effect. Large businesses that staff over 500 employees will begin paying the new minimum wage by the year 2017, while small businesses with fewer than 500 employees have until 2019 to implement the new ordinance. Employers with a healthcare policy have additional time to fulfill the minimum wage requirements.

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There were two main drivers that pushed the passing of the new $15 minimum wage. The first was the minimum wage increase of $15 per hour in the Seattle suburb of SeaTac. The ordinance was passed November 2013, although some employees are exempted from receiving the new minimum wage increase. Several groups spearheaded the passing of the ordinance including the Service Employees International Union (SEIU). The second driver was the formation of the Income Inequality Advisory Committee (IIAC) by Seattle Mayor Ed Murray. One of the first milestones of the IIAC was the announcement of the committee members on December 19, 2013 that included a mix of businesses, unions, and non-profit organizations. The IIAC also commissioned two studies, one from the University of Washington’s Evans School of Public Affairs, and the other from the University of California, Berkeley. The studies examined the potential impacts of a minimum wage increase. By April 2014, the IIAC delivered recommendations to the office of Mayor Murray regarding a minimum wage increase. On May 1, 2014, Mayor Murray announced that the IIAC had reached an agreement on recommendations for a minimum wage increase and was sent for review to city council. The result was Seattle City Council’s unanimous decision to pass the $15 minimum wage ordinance.  There are complex issues and various viewpoints that remain.

While some have noted how Mayor Murray’s tactic to form the IIAA removed much of the political fights that usually are part of such divisive issues, there is already a campaign being led by Socialist Seattle City Council member Kshama Sawant to speed up implementation of the $15 minimum wage increase. The International Franchise Association (IFA) is particularly critical of the new $15 minimum wage increase in Seattle. They think franchise owners, of brands such as Subway, are discriminated against as they are classified as a larger business due to their affiliation with a name brand.[1] However, some of those franchises employ very few employees and will need to implement the new minimum wage faster than local restaurant owners. Other small business owners are mixed on the issue. Some smaller business owners argue that the increased wages could lead to increased incomes for individuals to spend in their stores. This would lead to more revenue in their business. Other business owners see the increased payroll costs as a detriment, and that they might also need to increase wages for other employees to retain their existing wage structures. Regardless, small business owners are still split into how the minimum wage increase would affect their business practices.

Within Chicago, voters this past March approved by 87% a non-binding advisory referendum to increase the city’s minimum wage to $15 per hour. Mayor Rahm Emanuel has supported Obama’s push for a $10.10 federal minimum wage. However, local community groups, inspired by Seattle’s recent minimum wage increase and local protests in Oak Brook, IL against McDonalds, are using the momentum to push for a $15 minimum wage increase. The timing is right as Mayor Rahm Emanuel’s task force on a higher minimum wage announced the first of several public meetings regarding the issue on Monday June 9th from 7 p.m to 9 p.m at Kennedy-King College, with four more meetings taking place throughout June.

About the Author:
Alexander Linares, GCI Research Assistant: is a second-year MUPP, with a focus on Economic Development.

Sources:
The Associated Press and NBC News Staff. (2014). Seattle approves highest US minimum wage. NBC NEWS: Economy. Retrieved from http://www.cnbc.com/id/101714388 Date Accessed: 06/05/2014.

Byrne John; Dardick, Hal. (2014). Group calls for $15-an-hour minimum wage in Chicago. Chicago Tribune: Clout Street. Retrieved from http://www.chicagotribune.com/news/politics/clout/chi-group-calls-for-15anhour-minimum-wage-in-chicago-20140528,0,5951445.story/  Date Accessed: 06/05/2014.

City of Seattle. (2014). Income Inequality Advisory Committee. City of Seattle: Advisory Committee.

Retrieved from http://www.seattle.gov/Documents/Departments/IncomeInequalityAdvisoryCommittee/one-pager.pdfDate Accessed: 06/05/2014.

Coy, Peter. (2014). It’s On! Nobel Economists Go Head to Head Over $10.10 Minimum Wage. Bloomberg Business Week: Global Economics. Retrieved from http://www.businessweek.com/articles/2014-03-12/its-on-nobel-economists-go-head-to-head-over-10-dot-10-minimum-wage Date Accessed: 06/05/2014.

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Economic Policy Institute. (2014). Over 600 Economists Sign Letter in Support of $10.10 Minimum Wage: Economist Statement on the Federal Minimum Wage. Economic Policy Institute: Research and Ideas for Shared Prosperity. Retrieved from http://www.epi.org/minimum-wage-statement/ Date Accessed: 06/05/2014.

Martinez, Amy. (2014). Why $15? Wage plan based more on politics than on precise math. The Seattle Times: Business/Technology. Retrieved from http://seattletimes.com/html/businesstechnology/2023740540_minimumwage15explainerxml.html Date Accessed: 06/05/2014.

Lobosco, Katie. (2014). Coping with a $15 minimum wage in Seattle. CNN: Money. Retrieved from http://money.cnn.com/2014/06/03/smallbusiness/seattle-business-minimum-wage/ Date Accessed: 06/09/2014.

Mayor’s Press Office. (2014). Minimum Wage Working Group Announces Location of First Public Meeting and Launches Online Forum for Public Comment. City of Chicago: Press Releases.

Retrieved from http://www.cityofchicago.org/city/en/depts/mayor/press_room/press_releases/2014/may/minimum-wage-working-group-announces-location-of-first-public-he.html Date Accessed: 06/05/2014.

Office of the Mayor. (2014). Murray: ‘We Have a Deal: Seattle Workers Are Getting Raise.’ Seattle.gov Latest News from the Office of the Mayor Ed Murray. Retrieved from http://murray.seattle.gov/murray-we-have-a-deal-seattle-workers-are-getting-a-raise/#sthash.GKmVTtqL.dpbs Date Accessed: 06/05/2014.

Weise, Karen. (2014). How Seattle Agreed to a $15 Minimum Wage Without a Fight. Bloomberg Business Week: Politics and Policy. Retrieved from http://www.businessweek.com/articles/2014-05-08/how-seattle-agreed-to-a-15-minimum-wage-without-a-fight Date Accessed: 06/05/2014.

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