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Council tackles Murray's $15 minimum wage proposal

As Sawant criticizes the mayor's proposal, backers from business and labor agree that the plan is imperfect.

While some see Mayor Ed Murray's proposal to raise Seattle's minimum wage to $15 as a compromise, others see it as a bit of a cop out. Both of those views were on display as a City Council committee began digging into the details of the plan during a meeting on Monday.

Councilmember Nick Licata, who served on an advisory committee Murray appointed to help craft the proposal, framed the mayor's plan as a step toward progressive legislation, which has broad support among business and labor groups. Most other advisory group members described it along similar lines. But Councilmember Kshama Sawant, who was also on the panel, took jabs at the mayor's plan, saying that it had been diluted to appease business interests and that it does not increase the pay floor quickly enough.

If implemented in its current form, the plan would raise Seattle's minimum wage to the highest of any major city in the nation and would be Murray's first major policy accomplishment as mayor. Despite her misgivings, even Sawant acknowledged that the mayor's proposal would usher in the strongest minimum wage law in the United States, and said the advisory committee’s work was “incredible” and “historic.” But the Council has no easy task.

The plan is rife with technical details, and representatives from business groups told the Council on Monday that their members will likely step forward with concerns.

“If you leave the negotiating table with both sides being a little unhappy it’s a pretty good deal,” David Freiboth told the City Council's Select Committee on on Minimum Wage and Income Inequality. Freiboth is executive secretary of the M.L. King County Labor Council and was a member of the mayor's 24-person advisory committee, which included representatives from business, labor and nonprofit groups, as well as Councilmembers Licata, Sawant and Bruce Harrell.

The mayor's plan phases in the wage differently for smaller and larger-sized businesses and would go into effect in 2015. Businesses with 500 or more employees would be required to pay their workers $11 per hour at that time. For larger businesses that provide their employees with health care the phase-in period would last four years. By 2018 they would be required to pay their workers $15 per hour. The phase-in period would last three years for large businesses that do not provide health care, hitting $15 in 2017.

For smaller businesses, the minimum wage would reach $15 after seven years, in 2021. Smaller businesses would also be required to guarantee workers "minimum compensation," which includes tips and health insurance. Minimum compensation, including tips and healthcare, would rise to $15 per hour in 2019.


Under Mayor Murray's proposed plan, wages would rise at different rates for larger and smaller businesses. The "total compensation" figures in Schedule C show the amount that employers with fewer than 500 employees must pay their workers including tips and health care benefits. To be counted toward total compensation, tips and health care benefits need to appear on an employee's paycheck. Source: Seattle Mayor's Office

“The words ‘minimum compensation’ is a new notion that’s been introduced by business lobbyists,” Sawant said on Monday as she critiqued the plan. The $15 minimum wage was the Socialist councilmember's signature issue during her run for office last year.

During Monday's meeting Sawant presented parts of her own plan for raising the city's minimum wage. It would increase the wage to $15 in 2015 for businesses with 250 or more employees and ramp the wage up to that level for workers at smaller businesses by 2018. The plan mirrors a charter amendment backed by activists from the organization 15 Now. The group is collecting signatures to get the measure on November's ballot.

Under the mayor’s plan, after each wage category reaches $15, hourly pay would increase annually based on the consumer price index. The Mayor's Office estimated the CPI at 2.4 percent. A chart included with the proposal shows that by 2025, the minimum wage for all businesses in Seattle, along with total compensation for workers at small businesses, would be $18.13.


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Comments:

Posted Tue, May 6, 8:29 a.m. Inappropriate

Minimum wage is an important but complex economic and business issue. Hope the Council is considering the impacts on all stakeholders and not just reacting to sloganeering.

Posted Tue, May 6, 8:40 a.m. Inappropriate

I think this is an excellent compromise. Still a compromise but it takes a lot of considerations into account. I'm ready to vote "yes" if the council refers it to the public.

Using "minimum compensation" as a basis is a good idea. It is more fair to everyone - under a wage-only model, why should an employee at one business who offers benefits get, effectively, $20/hr when another business has no benefits and pays $15 for equivalent work? Clearly that kind of model encourages businesses to cut all benefits.

In the end, inflation considered, Sawant points out that the wage level only reaches $14.31. I don't see why the schedules couldn't be adjusted a small amount to bump that up to $15. On the other hand, that's really pretty close - where did $15 come from in the first place?

pragmatic

Posted Tue, May 6, 5:46 p.m. Inappropriate

@ Pragmatic - I was wondering the same thing. Aim high and see if it sticks. I don't like Sawant pushing her socialism on everyone without thinking of ramifications for all Seattle area residents. Must be easy for her since she doesn't make $15. I'm all for economic justice, but it has to be done intelligently.

Rebecca

Posted Tue, May 6, 6:30 p.m. Inappropriate

Socialists don't want the working middle classes to be able to afford to eat in a restaurant.

NotFan

Posted Tue, May 6, 8:58 p.m. Inappropriate

Well, I don't agree with Sawant's position, either. However I think she's right to push for what she believes. The trick is accepting a compromise in the end.

pragmatic

Posted Tue, May 6, 9:24 p.m. Inappropriate

Sawant is a member of the 1% who only pretends to care about the working middle class. Like the rest of Seattle's "progressives," the woman is a complete phony from the word go.

NotFan

Posted Tue, May 6, 8:49 p.m. Inappropriate

The problem with $15/hour? Are the targeted group of employees worth the extra money to the business. If they don't bring value to the table then I predict things will go south in a hurry and feelings will get hurt. This should be very interesting.

I expect that Sawant's next crusade will be to set limits on profits, before taxes of course.

Djinn

Posted Wed, May 7, 5:41 a.m. Inappropriate

I think voters should be given the opportunity to vote on a maximum wage for government employees. Sound good?

Cameron

Posted Thu, May 22, 8:09 a.m. Inappropriate

In doing so you will lose the best and brightest employees to the private sector and will be left with the dreggs of the work force.

Posted Wed, May 7, 4:02 p.m. Inappropriate

There is a good likelihood that the minimum wage increase will reduce the number of jobs offered in Seattle. I think that's the biggest risk and it is not mentioned in this article. The Congressional Budget Office estimated that 500,000 jobs would be lost nationwide if the current national minimum wage were raised to $10.10 and hour (roughly a 25% increase). $15 an hour is a 60% increase.

kieth

Posted Wed, May 7, 6:43 p.m. Inappropriate

This is one way to drive fast food eateries out of Seattle. There won't be enough folks willing to pay $10 or more for flavored cardboard with sauce and mush fries. None of them will stick around.

A 60% raise of any leg of a business plan spells trouble.

Djinn

Posted Fri, May 9, 11:35 p.m. Inappropriate

I habit a McDonalds where the coffee is $1 and breakfast is $2. A lot of homeless and poor stand in line with me. The freedom of that choice will vanish if the politicians have their way. It won't be recorded in any economic studies. A decade from now the pundits will say there was no negative effect. They would be wrong. They are wrong.

PhDs, News anchors, and politicians are out of touch with the poor. Especially when they rely on people with no experience with the poor.

pdx

Posted Thu, May 15, 8:35 a.m. Inappropriate

I am concerned about one unintended consequences of the way head count is measures. Many laws impose requirements based on business size. This ranges from the Seattle living wage proposals to State commuter trip reduction requirements (http://www.wsdot.wa.gov/Transit/CTR/law.htm). I am concerned that:

1) This is one more reason for employers to move employees to work for outside job shops and away from full time permanent employment?

2) Moving workers to job shops is effective in evading regulations. For example, on the high end, Microsoft does not allow contractors on their Connector buses. Is this because contractors are not included in the commuter trip count against Microsoft?

3) Many low wage folks who spend their days working in a large business, food service in company cafeterias, janitorial, security, etc. Why are they not included in the living wage head count?

4) What other moral hazard are there for keeping our current practice of not including all on site workers in regulation?

5) How much are we at risk of every McD's having no employees on site, just perma temps working for a throwaway job shops with 499 employees each?

6) How can we fix our laws and regulations to capture the full worker count in a business?

GreenerEE

Posted Thu, May 22, 8:01 a.m. Inappropriate

1. How pleased will an existing employee be who earned his way up to $15 to see the new hire start at his compensation level?

2. Does the business owner need to compensate the existing employees more? If so, would they do it by equal percentage to match the pre-$15 pay step pay scale? Or would they do it by actual dollar increment value (which would be an actual decrease in percentage earned and a flattening of the pay scale)?

3. Is the mayor and city council considering the cost-effect of raising the wages of the rest of the work force to re-stratify the compensation levels due to value the employee brings? Are they going to adjust the pay scales of all City workers too?

4. Is the mayor and city council considering what this does to cost of goods and services?

5. And finally, are we really trying to follow the progressives into a situation where our society does not offer a place to work for non-living wages? I mean my high schooler has a need to experience the work environment, and what it means to be hard working, and responsible in a work environment, and to earn some money, but he has abolutely no need to earn a living wage. He is unskilled and certainly does not deserve $15/hr.

Think Seattle! One size does not fit all. $15/hr is a really bad idea.

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