Rumblings Grow On Minimum Wage

How High Is Too High? Consumers, Workers Could Foot The Bill In The End

Sometimes there’s a price for feeling good about yourself, says Larry Stewart. He’s Executive Director of the Washington Association of Neighborhood Stores, which represents 360 convenience outlets in the state, plus related distributors and manufacturers. Stewart tells Lens he expects that a pending initiative to the people to raise the state’s minimum hourly wage to $13.50 by 2020 will qualify for the fall ballot; win approval because of its feel-good appeal; and then drive up prices at restaurants, grocery stores and convenience stores as wages rise and employers are left with no recourse.

Local Wage Laws Not Barred Yet; That’s A Concern

Seattle and SeaTac have already passed $15-an-hour minimum wage mandates of their own, and Tacoma settled on $12. Washington’s baseline is $9.47 per hour, seventh highest nationwide. A 1998 Washington ballot measure approved by voters requires minimum wage hikes based on increases in the Consumer Price Index; but it does not currently bar local regulations that go higher.

Stewart was one of a number of representatives of business organizations again out in force at recent state legislative hearings on two minimum wage bills. One, now effectively dead for the session, was SB 6087 which would have raised the minimum wage statewide to $12 by 2020 in steps and then higher as adjusted to inflation. Sponsors were Sen. Steve Hobbs (D-44th) and Sen. Mark Mullet (D-5th).

Another measure which has languished is SB 6578, which sought to strike down minimum wage laws already approved in Washington cities and allow only county, state or federal minimum wage laws. It cleared the Senate Commerce and Labor Committee but failed to clear the Senate Rules Committee and win approval in its chamber of origin by the February 17 deadline. State Sen. Michael Baumgartner (R-6), whose district includes Spokane, was the prime sponsor.

The Conversation Is Just Getting Started

The inaction on a hot-button issue in a short-session year was expected. But the recent debate telegraphs what will become a louder conversation as November approaches, and as the legislature in its long session next year takes up minimum wage again, perhaps in reaction to the $13.50 per hour initiative’s success.

Jan Gee, President and CEO of the Washington Food Industry Association, told lawmakers that her membership of independent grocery store owners supports keeping the statewide minimum wage from big leaps and supports a ban on related local laws.

Gee added “Eastern Washington grocers are not expanding there, they’re going to Idaho. Labor is the Number One cost to grocers and going to $12 an hour will have a significant impact on the grocery bills of families across the state. You can raise the minimum wage here but it’s got to come out of somewhere. Our industry has profit margins of one to one-and-a-half percent.”

In Eastern Washington, the regional chamber of commerce Greater Spokane Incorporated is opposed to minimum wage hikes. In its 2016 state legislative priority agenda, GSI states one aim is to “continue to advocate against the rising cost of Washington State minimum wage, as it is a difficult wage for small businesses to support.”

Bob Battles, Director of Government Affairs on workplace issues for the Association of Washington Business, told lawmakers that preemption of local minimum wage laws is necessary. AWB opposes new means of increasing the minimum wage statewide but, Battles added, the public differs and a phased approach makes sense. Statewide legislation would help, but should include a special wage to accommodate the hiring of teens, he said.

Representing the Washington Restaurant Association, Government Affairs Director Bruce Beckett said if more cities begin to pass their own minimum wages, compliance for some employers would become a “nightmare,” so a statewide approach is needed.

Unintended Consequences

Beckett added unintended consequences are already arising in Seattle, where to offset growing labor costs from city-mandated minimum wage increases, some restaurants have increased prices or instituted no-tipping policies, which hurt take-home pay of wait staff. WRA made headlines last fall after dropping its resistance to the idea of a legislated hike in the minimum wage, but has stressed the need for a statewide and gradual approach.

An Entry-Level Job Is A Beginning, Not An Avocation

Mark Johnson, Vice-President of Government Affairs of the Washington Retail Association said, “We believe the minimum wage was created as an entry-level starting wage” and workers have incentives to achieve higher wages without government mandates. Stewart, of the convenience stores association, agreed. “You can work your way up the ladder” based on performance and ambition, he told Lens.

Apparently, a lot of workers have been doing exactly that, or opting for careers which demand greater training and pay better. Overall, the percentage of hourly workers in the U.S. earning minimum or lower has dropped steadily since 1979 when such measurements began, according to the U.S. Bureau of Labor Statistics.

Using the lower federal minimum wage of $7.25 per hour as a yardstick, a 2015 BLS report found that the percentage of hourly workers in the nation earning that or less dropped from 13.4 percent in 1979 to 4.3 percent in 2013, and 3.9 percent in 2014. States with the lowest percentage of hourly workers earning at or below the federal minimum were Washington, Oregon, California, and Alaska – each between 1 and 2 percent, according to BLS.

Also testifying at the hearings were advocates favoring a higher minimum wage, including Sheley Secrest, head of of the Washington Chapter of the NAACP; and Sharon Kitchel, a home care provider and a member of Services Employees International Union (SEIU) who is also the filer of the ballot initiative. Both were opposed to SB 6087’s $12 hourly minimum. That’s “too little, too late” – the $13.50 of the initiative is better, said Secrest.

Supporters of the statewide minimum wage initiative will need to gather 246,372 registered voter signatures by July 8 to qualify for the November ballot. The email contact listed for the measure is that of Seattle attorney Knoll Lowney, a veteran drafter of liberal-leaning initiatives in Washington state.

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