Increasing Seattle’s minimum wage to $15 per hour would create about $690,000 in additional annual labor costs for the city itself, according to a City Budget Office estimate.
Mayor Ed Murray’s transition team requested a “fiscal analysis” in December to determine how much the wage hike would cost the city. The Budget Office evaluated the cost of increasing wages for 617 full- and part-time city employees who work for the Department of Parks and Recreation, Seattle Center and the Office of Arts and Culture. A total of 663 city employees currently make less than $15 dollars per hour, according to the Personnel Department. Seattle will have the equivalent of about 11,300 full-time employees in 2014.
Murray has said he supports increasing the city’s minimum wage to $15 per hour by the end of his first four-year term. In mid-December, he asked a 23-member committee of City Council members, business leaders and labor representatives to come up with a plan in the next four months for raising Seattle’s pay-floor.
Based on the Budget Office estimate, if the $15 minimum wage went into effect, annual labor costs would rise by $492,000 for Parks and Recreation, $194,000 for Seattle Center and $4,000 for the Office of Arts and Culture. In addition to the effects of increasing workers' wages, the estimate included the cost of paying additional retirement and Social Security benefits.
The jobs included in the estimate fell under the city’s “Step Progression Compensation Program.” Hourly wages for these jobs increase in “steps” based on the amount of time an employee has worked for the city. In the estimate, the Budget Office included positions with steps under $15 dollars. Wages were increased proportionally for each step. If a job’s lowest step were $10 per hour, then that step would bump up to $15, the $11 per hour step to $16, and the $12 per hour step to $17.
Hall Walker, whose final day as the Budget Office’s Deputy Director was on Monday, said the study didn't look at raising wages for workers in jobs that do not currently pay less than $15. “If you were in a class that has no steps below fifteen, then you didn’t get a change,” he said.
In 2013 there were 43 types of jobs with steps under $15 per hour, according to the city's salary schedule.
The estimate, Walker said, did not include any analysis about how to pay for the additional labor costs.
“We did not venture into that yet, although clearly that will be part of the discussion moving ahead,” he said.
Seattle Center, according to a spokesperson and Walker, would probably be able to pass along the bulk of any new labor expenses to its clients. The center’s facilities, which include Key Arena, are used for events including concerts and basketball games. The center’s 2014 budget is $36.3 million. Only about $13 million of the budget comes from the city’s general fund. The rest comes from revenue sources like from parking fees and facility rentals. Approximately 55 percent, or $19.9 million, of Seattle Center's 2014 expenditures are expected to be for personnel costs.
“We have a lot of intermittent employees here,” said Seattle Center spokesperson Deborah Daoust. She said these employees include ushers and admissions staff. The hourly wage for an usher, according to the salary schedule, is $11.07 and the hourly wage for a ticket seller is $13.20. For events at Key Arena with 12,000 or more attendees, Daoust said that Seattle Center will typically hire between 120 and 150 admissions staff.
Murray’s communication director, Jeff Reading, said that no one on the transition team had discussed specific options for covering the added expenses Parks and Recreation would incur if the minimum wage goes up to $15 per hour.
“This will certainly be a piece of the overall conversation that [the mayor] recently initiated when he launched his Income Inequality Advisory Committee,” he said.
The Seattle Department of Parks and Recreation’s 2014 budget is roughly $135.4 million. About 43 percent, or $58.2 million, will cover 2014 personnel costs. Including part-time positions, Parks and Recreation will have the equivalent of about 854 full-time employees in 2014, according to the City Budget. Crosscut has requested, but not yet received, a count of the number of Parks and Recreation employees who earn less than $15 per hour. Among the jobs in the 2013 city pay schedule with wages under $15 per hour are parks maintenance aides, which have two pay steps, $13.89 and $14.48, and golf course groundskeepers, which have an hourly wage of $13.75.
The costs of a minimum wage increase would come against the backdrop of the other financial challenges Parks and Recreation is already facing. A $146 million parks levy, which voters approved in 2008, is set to expire in 2014. And there is a $270 million backlog of park maintenance projects, according to a 2012 Seattle Parks Foundation report. Murray has said he’d like the city to create a Metropolitan Parks District that would provide parks funding by levying its own property taxes.
In an emailed statement, a Parks and Recreation spokesperson said that in the event of a minimum wage increase the department would work with the Mayor’s Office and the Budget Office “to understand how this affects our employees and our overall budget, and make the necessary adjustments to comply with any new laws.”