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.
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.

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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.

Sawant pushed back against those numbers on Monday, displaying a chart at the meeting that factored-in inflation. The inflation-adjusted pay scale showed minimum wage and minimum compensation under Murray's plan never getting higher than $14.31.

"Even in 10 years time, workers are still not going to be at 15," she said.

Councilmember Licata asked Bob Donegan, president of Ivar's Inc., and a member of Seattle Restaurant Alliance, and David Watkins, president of the Seattle Hotel Association, whether the two trade groups were committed to supporting the mayor's proposal. Both Donegan and Watkins were members of Murray's advisory committee and backed the plan.

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A large crowd turned out for a meeting on Monday of the City Council's Select Committee on on Minimum Wage and Income Inequality. Photo: Bill Lucia

Watkins said that hotel association members had only recently seen the details of the proposal. "It's not an equal deal for everybody," he said, adding that members of the group would likely meet with councilmembers to share their concerns.

Similarly, Donegan said that restaurant alliance members would approach the Council with questions as they learned more about the plan.

Watkins also said that while the hotel association's board had put trust in him to make the best deal for implementing the wage increase "some of them are okay with it and some of them are not."

Going forward, Licata said, it would be helpful to know that the leaders of the trade groups were supportive of the proposal, even if there are concerns among individual members.

Earlier in the meeting, Donegan was blunt in his assessment of the plan. "It is not the best solution," he said. "But it is the least offensive of the imperfect solutions.”

The M.L. King County Labor Council's Freiboth was more measured in his remarks. “Actually finding compromise that moves the ball forward," he said, "it’s really hard.”

Licata pointed to the fact that Council staffers could not find any examples of stronger minimum wage ordinances in any other cities. "This is clearly the most progressive legislation," he said, "assuming that we adopt what has been presented.” 

The Council committee will meet again on Wednesday.


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