Four lessons from Seattle’s 60 percent minimum wage hike
Today, fast-food workers in 150 cities across America and 30 countries across the world are striking over what they say are low wages and unfair working conditions in order to achieve what Seattle is very close to implementing: a $15 per hour minimum wage.
The Seattle proposal is a giant experiment. Developed by a committee of business, labor and community representatives convened by Seattle Mayor Ed Murray, the proposal could be implemented as early as October. The wage hike would be the largest of any city in the country: a $5.68 per hour increase over 2.5 years for Seattle’s largest businesses. An estimated 100,000 workers would be affected; by one estimate the proposal would put $2.9 billion into the wallets of low-wage workers over the next 10 years. Other cities have raised their minimum wage without lasting negative impacts on the economy, but no other increase was as big as this one.
As a member of the advisory committee that developed the final proposal, here are four lessons from Seattle that would help other wage-hike proponents replicate our model.
1. Small is beautiful
If Seattle is any indication, voters don’t necessarily care about the largest businesses, but we do love our small businesses. Getting small businesses on board was key to building a proposal that could make it through the city council without too much tinkering. It was also necessary to fend off a big business-backed initiative that would have attempted to introduce a “tip credit” into state law, allowing companies to pay less than minimum wage if employees receive tips.
The committee recognized that small businesses have little profit margin to play with and could fold if they had to implement a 60 percent increase in minimum wage too quickly. So the proposal gives small business time: five to seven years to reach $15.
2. Support from big corporations is critical
There’s not a lot of love lost in Seattle for the fast food chains or Wal-Marts of the world. However, big business has enormous amounts of money and time to spend running ballot initiatives that oppose a higher minimum wage. That’s why the final proposal allows a 2.5-year ramp-up to $15, even for the largest businesses. It defines a small business as having fewer than 500 employees anywhere in the country, which prevents national chains from claiming a franchise with fewer employees as a “small” business. These were political, not policy, trade-offs. One hundred thousand workers still get a raise, 50 percent of them within the first 2.5 years.
3. Enforcement is key
Wage and tip theft is rampant in businesses of all size. Nationwide, Subway franchises committed 17,000 wage violations from 2000 to 2013. Strong enforcement means preventing violations before they occur, with education and monitoring to ensure all workers benefit from our city’s labor standards.
4. Doing the right thing is not the same as doing the easy thing
Some businesses will close, even if others open. Some workers will get laid off, while others will finally have the opportunity to live in the city they service every day.
Seattle is investing in the belief — prevalent until trickle-down economics turned things topsy-turvy — that we’re all better off when we’re all better off. Lifting the floor on wages for the most vulnerable workers grows the economy. It reduces income inequality by giving some of the fruits of labor back to the very laborers who buy the daily necessities that continue to fuel the economy.
This is the same message that hundreds of thousands of fast food workers are yelling across the globe, even as they walk off their jobs. The question now is: Who’s listening? And who is ready to follow Seattle?
PHOTOS: Demonstrators take part in a protest to demand higher wages for fast-food workers outside McDonald’s in Los Angeles, California May 15, 2014. REUTERS/Lucy Nicholson
Seattle City Council member-elect Kshama Sawant addresses a crowd during a rally in support of a $15 per hour minimum wage at City Hall in Seattle, Washington December 5, 2013. REUTERS/David Ryder