Washington state workers earning minimum wage got a raise to $11 an hour Jan. 1 after voters passed Initiative 1433 in November. That amount will increase by 50 cents each year until January 2020, when it reaches $13.50. After that, the minimum wage will increase in accordance with the Cost of Living Index compiled by the Council for Community and Economic Research.
Tacoma employers now pay $11.15 an hour, while in Seattle, minimum-wage earners receive up to $15 per hour based on the size of the business and whether health insurance is offered.
The Puget Sound Business Journal estimated that more than 730,000 people in Washington earn the minimum wage. That translates into a significant effect on businesses beyond payroll expenses.
Assistant Manager Andrew Gerold at Key Center’s Subway said they already raised prices 50 cents in anticipation of Initiative 1433. He said the store is running specials and promotions to balance the price hike. Their sandwich artists earn minimum wage. Shift lead personnel and management earn incrementally more.
Lora Kelly, director of recruiting at WestSound Work Source, said, “We all want to see people have a livable wage, of course. But there are some small businesses we work with who were already struggling to be competitive while paying the old minimum wage of $9.47 an hour.
Sometimes competitors are not local in the state. When the competition is in a state that has federal minimum wage, it means their overhead is a lot lower.”
The federal minimum wage is $7.25 an hour.
Claudia Loy, owner of Sunnycrest Nursery, said, “We voted in the $11. We pay that to the kids we train. It is not a living wage. Maybe if people have more money, they will spend more.”
Her business is seasonal and employs six workers in the spring.
The clerk next door at Two Knight Vapors, Niko Serrano, had already seen the increase on his paycheck in December. “It was awesome,” he said. “It was a Christmas bonus. I have four kids.
It lets me live and stay local.”
Linda Merriwood, manager of Key Peninsula Liquor, said she did not foresee any impact on her business from the wage increase. “It depends on the economy and competition,” she said.
Manufacturing companies are having a harder time now, according to Kelly. “Those jobs can be more labor intensive, which means harder work. They may have been paying a bit more than the minimum at $11 per hour. If those wages stay the same, a worker can choose an easier job, such as retail, and make the same money for less work. We’ve also found that some workers who were making $11 an hour before now want a raise. Companies may not be able to afford to raise everyone’s wages at the same time. Employees don’t feel it is fair that they’ve worked to earn that amount and someone new, with no experience, comes in at the same wage.”
WestSound Work Source’s President and CEO Julie Tappero said, “As this plays out, we’ll see how businesses really make changes. Companies will find ways to streamline and work with fewer employees in order to compensate for higher employee costs, whether that will be by using automation or using more of the on-demand workforce, who knows. I don’t want to say that a higher minimum wage is all bad. It will just drive innovation and change in our businesses. If we’re not profitable, we won’t be in business and there will be fewer jobs.”