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Minimum wages: Lower to fuel opportunity?

Proposals in the state Senate would block cities from enacting higher minimum wages and allow teens to be paid at a lower rate.
Janea Holmquist Newbry

Janea Holmquist Newbry

Should some minimum-wage workers earn more? Should some minimum-wage employees earn less than now required?

Those questions got batted back and forth at a Senate Commerce and Labor Committee hearing Wednesday on three bills. One would outlaw SeaTac, Seattle or any other cities' efforts to increase the minimum wages within their borders, and two would install teenager-oriented minimum wages that would be below Washington's current $9.32 an hour.

Those bills are:

  • A proposal by Sen. John Braun, R-Centralia, to forbid any city or county to increase its minimum wage above the state's minimum wage. House Democrats, in contrast, want to increase the state minimum wage to $12 an hour by 2017 — a proposal likely to die in the Republican-oriented House.
  • A proposal by Sen. Janéa Holmquist Newbry, R-Moses Lake and the commerce committee's chairwoman, to create a teen training wage teens from 16 to 19 at either 85 percent of the state minimum wage or at the federal minimum wage, whichever is higher. Today, that would translate to $7.92 an hour rippling from the state wage. Only 10 percent of a company's work force could be teens eligible for a teen training wage.
  • A proposal by Sen. Mike Baumgartner, R-Spokane, that would enable an employer to pay 14- through 19-year-olds the federal minimum wage, rather than the state minimum wage, from June 1 to Aug. 31 each year. "We've got to get more kids in the labor force," he said.

The two teen wage bills were part of a larger group of job-growth bills that the House and Senate Republicans unveiled Wednesday. Besides the teen wage bills, the most significant legislation appears to be a bill by Rep. Matt Manweller, R-Ellensburg, that would restore tax breaks — which expired in 2010 — for manufacturers in Washington's 31 most rural counties. The reinstated tax break is supposed to mirror the $9.7 billion tax break that Boeing Co. obtained from Washington in November by threatening to send its 777X airliner production elsewhere.

"If we made such an effort to save the Goliath of the state, we should make the same effort for the little Davids in the state," Manweller said.

All these bills have a good chance of passing the Senate, which is controlled by the 24-Republican-two-Democrat Majority Coalition Caucus. But most, if not all, those bills will face a hostile reception in the Democrat-dominated House.

Reflecting the differences between the two chambers, the House on Wednesday passed, mostly along party lines, a bill that would require mandatory sick leave — similar to Seattle's 2011 law — for workers across the state. That bill will likely receive a chilly reception in the Senate. 

In the Senate, Wednesday's testimony on the three minimum wage bills split almost evenly.

The arguments on Braun's uniform minimum-wage bill were between a single spread-out firm's difficulties in dealing with multiple different minimum wages in adjacent towns versus the loss of a city's ability to abide by the wishes of its people. Linda Wilson, owner of a Vancouver cabinet making company that delivers around the state, said she can't see how a company like hers could keep track of what it has to pay if cities are enacting different minimum wages. Kathryn Campbell of SeaTac City Council said, "If people want to have local control over their work conditions, they should have that."

The pros and cons on the two teen wage bills were the same. Supporters pointed to high teen unemployment and businesses struggling to meet payrolls. Opponents argued that no link has been proven between lower teen minimum wages and economic health, plus the bills would penalize people for being young.

The bills "are discrimination toward teenagers and young people. They work for the same reasons that all workers do," said Nicole Grant of the International Brotherhood of Electrical Workers.

Baumgartner argued that lower teen wages would encourage more businesses to hire them, saying, "We've got to get more kids in the labor force," he said.

For exclusive coverage of the state government, check out Crosscut's Under the Dome page.

John Stang is a longtime Inland Northwest newspaper reporter who earned a Masters of Communications in Digital Media degree at the University of Washington. He can be reached by writing editor@crosscut.com.


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Comments:

Posted Thu, Jan 30, 6:37 a.m. Inappropriate

Why isn't anyone talking about helping to shrink the labor pool and incent wages to grow organically? If the State of Washington required proof of legal citizenship/residency to get a drivers license, receive benefits or work, a number of illegal aliens would drop out of the workforce and leave. Do your jobs, protect those that have followed the rules and paid the bills. Stop supporting sanctuary and the impacts that they have on suppressing wages and costs they impose on social services.

Cameron

Posted Thu, Jan 30, 8:06 a.m. Inappropriate

"Linda Wilson, owner of a Vancouver cabinet making company that delivers around the state, said she can't see how a company like hers could keep track of what it has to pay if cities are enacting different minimum wages."

I would imagine Ms. Wilson, like any other business owner, already pays different workers at different rates. Arguing that the varying minimum wages would add to a task she is already doing makes no sense.

Overall, both sides need to bring more data to the discussion. We've all heard the same emotional arguments over and over. Let's move beyond that silliness.

platypus

Posted Fri, Jan 31, 11:50 a.m. Inappropriate

If her company delivers cabinets and installs cabinets it is not hard to imagine that some of the workers would be paid minimum wage, thus the complexity she is complaining about.

kieth

Posted Thu, Jan 30, 8:41 a.m. Inappropriate

I live in Braun's district and agree with him on some things, but not this. Should voters in an incorporated city (or even county) wish to approve raising the minimum wage where they live, that choice should belong to them and not a cadre of legislators in Olympia beholden to business interests.

I believe there is some inherent risk of fewer jobs being made available when you significantly raise your minimum wage (as Sea-Tac did), but if voters are willing to assume responsibility for helping create that outcome, good luck and Godspeed to them.

Posted Thu, Jan 30, 10:58 a.m. Inappropriate

"forbid any city or county to increase its minimum wage above the state's minimum wage."

That's the party of "small government" talking right there. Screw local control. Our way or the highway. Unless we lose control of the state legislature. Then we go back to screaming about local control.

"create a teen training wage teens from 16 to 19 at either 85 percent of the state minimum wage or at the federal minimum wage."

The path to opportunity goes through a LOWER WAGE for people who are looking to transition to college, RIGHT when they're trying to do that transition. Super smart. In 1981, a minimum wage job during summer, assuming you saved all you could, paid for a year of college tuition and fees. That is unthinkable today. For many reasons, not least of which is the fact that the minimum wage hasn't even kept pace with BASE inflation, let alone tuition inflation.

"'We've got to get more kids in the labor force,' he said."

Ignoring the 19th century philosophy that underpins this statement - So you do that by paying them LESS during the few months a year they're not in school, and potentially saving for college. Genius. That'll get them banging down the door for jobs. Oh, and feel free to ignore the statistics about who actually holds these jobs down (hint - it's not all teenagers and seasonal employees).

For a party that espouses the free market, and the application of incentives to spur economic growth, it's odd that when we talk about the labor force (rather than corporations) they switch from incentive-based policy to DISINCENTIVE-based policy. Or, it's not odd at all. Rich people are rich because they deserve it. Poor people are poor because they deserve it. If they deserved better, they would just have it. That's what the world looks like from a 2014 Conservative's perspective. Pure, flawless meritocracy.

"The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness." John Kenneth Galbraith

"But," says the modern conservative, "I'm not selfish. I just work harder, and deserve it more."

Exactly.

nullbull

Posted Thu, Jan 30, 4:50 p.m. Inappropriate

nullbull,

If I owned a fast food restaurant and I had to pay $15 per hour for minimum wage, I'd end up hiring only mature people who are already somewhat life/work experienced (and that wage would allow me to do that).

If I could pay a lower minimum wage for people between age 14 - 17, then I would be willing to hire and train them.

But at $15 per hour, I'm not willing to train young people who can only work a few months a year for me, that investment makes no sense.

We need a way to put more young people to work - there are fewer work opportunities for teens today than when I was a teen, and in large part, I think that even $9.50 per hour is too much for an untrained teen.

Even in expensive Seattle.

Posted Sun, Feb 2, 2:50 p.m. Inappropriate

Common1sense,
Considering that the real purchasing power of minimum wage has decreased since 1968 I would argue that $9.50 simply isn’t enough for a federal minimum wage let alone enough for Seattle and the associated cost of living in the Pacific Northwest. Keep in mind age discrimination is just as prejudice as race or religious discrimination, and that merely because someone has life/work experience does not guarantee a better work ethics or performance. Furthermore, minimum wage employers are subsidized by tax payers through government assistance programs such as food stamps and low income housing. Though to be certain it does not surprise me that employees feel entitled to cheap labor; slave owners and child labor employers had similar augments and a sense of right to dictate wages and worth of workers. If you feel that $9.50 is too much I urge you to try and live off of such poverty wages yourself.
With that said I feel that the real problem is that, in general wages have not kept up with real inflation. Meanwhile the top one percent has seen unprecedented increases to their salaries making income disparity the greatest in American history. The answer to solve the income inequality is to increase wages, not to decrease them.
~Colin S

ColinS

Posted Thu, Jan 30, 2:05 p.m. Inappropriate

Thank you John and Crosscut for clueing us in to all the varieties of sausage Olympia is considering!

Pot and guns, in hogging the spotlight, reduce the public's foresight on the rest of the spectacle.

afreeman

Posted Sun, Feb 2, 11:01 p.m. Inappropriate

Colin, you cite information that says that the purchasing power of minimum wage has decreased since 1968. That actually isn't quite correct, especially in Washington State. You have neglected to account for the fact that the Washington State minimum wage is higher than the federal minimum wage, except for Obama's brand new $10.10 minimum wage for federal contract workers, and for the fact that the State Labor & Industries uses the Consumer Price Index annually to calculate the state's minimum wage each year, as required by Initiative 688, approved by Washington voters in 1998.

So, in 1998, the voters of this state made sure that minimum wage was indeed tied to the Consumer Price Index, ANNUALLY. And now Washington State has the highest minimum wage, except for the brand new Obama federal contract minimum wage at $10.10.

As of January 1, 2014, the State of Washington minimum wage is $9.32, 14-15 year olds can be paid 85% of the minimum wage @ $7.92.

The State L & I says that the minimum wage in Washington is higher than any other state, and Oregon is the second highest.

Based on this information from L & I, I'd suggest you consider rethinking your ideas that minimum wage doesn't take into consideration the actual cost of living in Washington State, including King County.

http://www.lni.wa.gov/News/2013/pr131231a.asp

The CPI-W measures average price changes for goods and services purchased by urban wage earners and clerical workers. The goods and services it monitors include basic living costs such as food, clothing, shelter, fuels and services such as doctor visits.

Washington is one of 10 states that adjust the minimum wage based on inflation and the CPI. The others are Arizona, Colorado, Florida, Missouri, Montana, Nevada, Ohio, Oregon and Vermont.

Washington has the highest minimum wage, followed by Oregon, where the minimum wage will rise on Jan. 1 by 15 cents, to $9.10 per hour for Oregonian workers.

$15 per hour would put Washington at nearly 30% higher than Obama's new federal contract minimum wage, and nearly 38% higher than the current Washington State minimum wage.

While case-by-case employers may choose to pay more than $9.32 per hour, suggesting that all employers who pay minimum wage should pay $15 per hour is financial suicide for most of those employers, and will cost a great many people the jobs that they depend upon.

Do the math.

Posted Mon, Feb 3, 5:52 p.m. Inappropriate

Common1sense,

In 1968 the federal minimum wage was $1.60 per hour http://www.dol.gov/whd/minwage/chart.htm . Using the governments CPI calculations that $1.60 would equate to $10.71 in 2013 dollars http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1.6&year1;=1968&year2;=2013 . This of course is assuming that the method the government uses to measure inflation is accurate, which I do not and truly feel that it underrepresents the actual rate of inflation. If minimum wage was to keep pace with the CPI federal minimum wage ought to be $10.71. This $10.71 neglects to account for Washington States higher cost of living and reasonably ought to be considerably higher than the $10.71.

Certainly you are correct in that Washington State increases minimum wage each year to match CPI measured inflation, but as you said Washington only began doing so in 1998 and failed to do so from 1968 to 1998. To reiterate I don’t feel that the current CPI method measures actual inflation and therefore actual costs of living.

In regards to a $15 minimum wage being financial suicide I disagree. Keep in mind the increase in minimum wage would affect all business in Seattle, yet demand for goods and services would remain the same. That is that people in Seattle still need groceries, haircuts, clothing, and what have you. If for one reason or another a business is unable to stay in business as you mentioned because of an increase in the minimum wage, it is because the business is inefficient and indicates that that business only previously survived by paying its employees poverty wages. Despite this, if a business closes its doors the goods and or services that that business provided will still be needed/wanted (assuming there was a need and want in the first place) and I have no doubt that a more efficient one will eventually fill that void. So in the long term jobs aren’t really lost by simply increasing the minimum wage nor are jobs increased by lowering the minimum wage.

I did do the math!

ColinS

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