Mayor Ed Murray on Thursday morning proposed a plan to raise Seattle's minimum wage to $15 per hour.
Under the proposal, the $15 wage would be phased in for both large and small businesses. If the mayor's plan is enacted, Seattle's minimum wage would become the highest of any city in the nation. The proposal is based on recommendations from a committee Murray appointed to advise him on the issue. Consensus over the recommendations had eluded the committee in recent weeks as representatives from labor, business and nonprofit groups struggled to line up support among their constituencies.
The proposal will next go to the Seattle City Council, where it will receive quick attention. Councilmember Sally Clark, chair of a committee on income inequality, said a review of the proposal will begin at a meeting Monday. Murray announced his plan at a press conference at City Hall.
City Councilmember Nick Licata, who was a member of Murray's Income Inequality Advisory Committee, praised the proposal as an "awesome victory" and a step toward a real living wage.
"I will work with the council to pass this proposal with the minimum amount of tinkering," he said.
The mayor said that 21 of the committee's 24 members have agreed to the proposal. Among the dissenters was Socialist Councilmember Kshama Sawant, a $15 minimum wage stalwart, who said the proposal has been watered down by big businesses.
About 100,000 workers in Seattle currently earn less than $15 per hour, according to a report professors at the University of Washington's Evans School of Public Affairs prepared for the advisory committee. The current state-mandated minimum wage in Washington is $9.32.
The phase-in period for the pay floor increase would begin in 2015 for all businesses. Larger 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, meaning that by 2018 they would be required to pay their workers $15 per hour. For large businesses that do not provide health coverage the phase-in period would last three years; they would hit the $15 mark by 2017.
The arrangement for businesses with fewer than 500 employees is different. The minimum wage for those employers would reach $15 after seven years, in 2021, increasing at a rate of $0.50 annually along the way.
Small 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 for smaller businesses by 2019.
After each wage category reaches $15, hourly pay will increase annually based on the consumer price index, which is estimated at 2.4 percent in the mayor's proposal. By 2025, minimum wage for all businesses in Seattle and total compensation for small businesses would be $18.13.
Mayor Ed Murray announces his $15 minimum wage proposal, along with members of his income inequality advisory committee. From left to right, CEO of the Seattle Hospitality Group, Howard Wright, president of the SEIU Healthcare 775NW union, David Rolf, City Councilmember Nick Licata and Solid Ground's Gordon McHenry. Photo: Bill Lucia
Calling the proposal historic, Murray cited statements by Pope Francis about the evils of growing inequality. SEIU Healthcare 775NW president, David Rolf, praised his co-chair on the Income Inequality Advisory Committee, Howard Wright, and the business community for their work on the proposal.
Wright, who is the CEO of Seattle Hospitality Group, said that most businesses would back the proposal. He added that "fear and exhaustion" had helped push the committee's belabored negotiations over the wage plan toward a conclusion. The mayor had said he wanted a plan that had "supermajority" support within the group.
Murray formed the committee last December, shortly after he was elected. In recent weeks, members sparred over issues like the phase-in period, how the wage should be applied to small businesses and whether tips should be counted toward hourly pay.
The mayor has emphasized that he wants to avoid the prospect of multiple minimum wage initiatives popping up on this November's ballot.
But that possibility lingers. A group called 15 Now decided last weekend to begin collecting signatures for a charter amendment that would raise the minimum wage for businesses with more than 250 employees to $15 on Jan. 1, 2015. It would also phase-in the wage hike for smaller businesses over a three year span of time.
And immediately after Thursday's press conference Kathrina Tugadi, a member of Forward Seattle, said that within the next 10 days, the group will file a ballot initiative that would raise the city's minimum wage to $12.50 over a five-year period. The measure would include no exemptions for businesses and would not give credits for tips or health care.
Tugadi, the owner of a Mexican restaurant and a lounge, said of the Murray proposal: "Big business is winning with this."
A number of labor and progressive groups issued a statement praising the mayor's plan and saying that it is a "big win for 100,0000 people working for low wages in Seattle." Among those groups was the nonprofit El Centro de la Raza, Puget Sound Sage, Teamsters Local 117 and SEIU, which represents service workers.
Councilmember Sawant was not the only committee member who was not on board with the proposal. Murray said Maud Daudon, head of the Greater Seattle Chamber of Commerce, had "abstained" from endorsing the recommendations, and one business leader, Craig Dawson of Retail Lockbox, had rejected the plan.
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
Sawant said the public should press the council to adopt a stronger proposal, with no phase-in for big businesses and a three-year phasing for smaller companies. "Let's keep the pressure high over the next days and weeks. ... March in the May Day demonstrations with me," she said during her own press conference, which followed Murray's announcement.
Volunteers, she said, should continue to gather signatures for the ballot measure backed by 15 Now. She said this was a way to pressure the City Council and that the measure could provide an alternative path toward the wage hike if the final council plan is not "a strong 15."
Sawant spoke positively of the organizing here and nationally around the $15 minimum wage, crediting it with bringing about the city proposal. "All of this is putting pressure on the establishment. This is truly a historic moment. … But we haven't got an ordinance yet."