Seattle’s new $15 minimum wage law went into effect today, just a year after the city was hailed by labor activists as the first major urban center to push employers into higher wages and compensation for workers.
However, the fast food workers who orchestrated walkouts to publicize the measure won’t be seeing anything near $15 an hour in paychecks this year, with the increase only gradually going into through 2017 and beyond.
The wage increases in Seattle highlight a growing trend toward higher pay in state legislatures and on ballot measures across the US. Last fall, voters in San Francisco adopted their own scaffolded minimum wage hike to $15/hour by July 2018.
HOW IT WORKS
Employees at major companies and national chains in Seattle will receive the minimum wage increase to $11 an hour this week, while small businesses will pay at least $10, with a $1 credit for tips or health insurance.
It won’t be until 2017 that Seattle workers at large companies and chains start bringing in $15 an hour. Those businesses that offer health insurance will have an extra 2 years to comply. Smaller companies will be granted seven years, with the new wage incorporating consideration of tips and health care costs during the initial five years.
After everyone has reached the $15 wage, subsequent annual increases will be linked to the consumer price index.
Those unlucky workers with jobs right outside the city limits won’t quite get the $15 of Seattle workers; but are still covered by the state minimum wage of $9.47 an hour, which is the highest in the U.S.
WHO IS HELPED?
A University of Washington study calculates that over 90,000 people earn under the $15 rate in Seattle.
Some business owners argue that the expenses of this new wage will have to be passed on to consumers in higher product and service costs.
Others maintain that higher wages will give workers greater buying power and bring them enough new business to compensate for those higher labor costs.
AHEAD OF THE CURVE
Several Seattle companies have leap-frogged right over the phase-in period and gone straight to paying workers a minimum of $15 an hour, including restaurant chains Ivar’s, some grocery co-ops and the small chain restaurant Skillet.
Ivar’s, a local seafood restaurant chain, announced they would experiment with a $15 wage with a no tips policy to see how customers reacted.
Washington is one of a dozen states where a minimum wage increase is being debated or put into effect. A proposal would move Washington state’s wage to $12 in a sequence of 50-cent raises on the first of every year, although it currently appears unlikely to pass.
Lawmakers in 10 states raised their minimums in 2014, and four other states increased wages based on voter-driven ballot measures.
President Barack Obama has put the onus on Congress to raise the national minimum wage, currently at $7.25, to $10.10. Twenty-nine states plus the District of Columbia already observe minimum wages over and above the federal rate.