The statewide minimum wage for 2020 will increase to $13.50 January 1, up from the current $12. The Department of Labor and Industries points out some local jurisdictions have a higher minimum
Some local jurisdictions have higher minimum wage rates and different labor rules than Washington state. The more generous minimum wage may apply in these localities:
Will Campbell, assistant metro editor for The Columbian, writes that the wage boost increases business challenges in the state. His article presents a number of specific examples; we recommend it. Some business get hit harder than others, he reports.
Although the law applies to all businesses, the food-service industry and retail stores are likely going to be hit harder, according to Scott Bailey, regional economist for the state Employment Security Department….
He looks at a brewpub in Vancouver.
… not only will direct labor costs increase, so will overhead costs as suppliers pass on their increased labor costs.
For example, Mt. Tabor makes its own sausages. Not only will Surface have to pay more to the employees who make the sausage, he’s also anticipating he will pay more for the spices, the ground meat and the casings.
In addition to farmers passing along higher labor costs, so do wholesalers and distributors.
“By the time we get it to you, we’ve had four price increases on the item,” he said.
In higher cost Seattle, the hospitality industry faces even greater challenges. KING5 reports,
“I think just more and more people are in our pockets, taking more from us,” [restaurant owner Shawn] Padilla said.
“You have the sugary beverage tax that added $75 per box that we front, leases have gone up, property taxes have been a big thing especially with upzoning,” [restaurant owner Dan] Austin added.
The KING5 report gives the pros and cons, largely anecdotal, of compensation regulation in the Seattle market. Employment Policy Institute managing director Michael Saltsman also reviews the Seattle wage experiment in an op-ed in the Tri-City Herald. He similarly identifies the challenges on the hospitality industry and others.
Matt Dillon, award-winning chef and owner of Sitka & Spruce, announced this fall that his restaurant will close at the end of the year due to the rising costs of doing business in Seattle. Dillon cited the city’s rising minimum wage among other factors that make it difficult to survive in Seattle. He warned: “There’s gonna be a reckoning, big-time.”
That reckoning has already arrived, and not just for restaurants. The Yakima Bindery, Kid’s World Childcare in Pasco, O’Doherty’s Pub in Spokane, and Walker’s Healthy Pet in Mount Vernon are just a few of the businesses forced to close because of Washington’s rising minimum wage. My organization has collected their stories and others at FacesOf15.com.
As Congress considers whether to embrace a national minimum wage policy that matches Washington State’s, they’d be wise to consult with the small business owners who’ve become collateral damage from its minimum wage experiment.
Much of the above is anecdotal. And, as has been said, the plural of anecdote is not data. (Some history and dispute.) But the evidence argues that the steep increase in the Seattle minimum wage has had adverse consequences for some employers even as it has given some employees a raise. Some data-based analysis here and here.