With Washington’s minimum wage set to climb to $14.49 per hour in 2022, an increase of 5.8 percent, the Walla Walla Union-Bulletin editorial board offers a proposal that would address the challenges the wage presents for rural economies.
We believe the best way to determine wages should be through market forces — supply and demand — and especially allowing it to be set regionally, not at the state level.
Washington’s higher-than-average minimum wage has been mostly positive for employees, resulting in a starting wage being a fair wage.
Yet, the concern is that Washington state’s annual increase in the minimum wage — as mandated by voters with the passage of Initiative 1433 in 2016 — is putting a squeeze on employees and employers, particularly in rural areas and especially during the pandemic.
In Washington state, we have already seen how mandating a higher minimum wage is negatively affecting our economy. With a statewide minimum wage of $12 per hour, Washington mandates one of the highest rates in the country, and it will increase by another $1.50 in January 2020. In an attempt to address wage disparity in large cities like Seattle, which already institutes a $15 minimum wage, this sharp, mandatory increase has led to businesses filing bankruptcy, and it is already having a harmful effect on small businesses and nonprofits in Central Washington.
This year, the editorial says,
Regionalizing minimum wage is not a new concept. We need only look to Oregon to see it in practice.
Exactly what the difference in the minimum wage should be for the various regions of Washington state is not clear, but the basic concept is sound.
The overall wages for those living in urban areas are higher — often much higher — than they are in Walla Walla, Dayton, Richland, Pasco and Kennewick for work that is similar. Employers must pay that much more to attract qualified people because of the cost of living.
The minimum wage should work the same way. It should be based on the cost of living for the area.
It’s an idea worth investigating. The Washington Research Council also looks at the minimum wage, pointing out,
Washington’s current minimum wage is the highest state minimum wage in the country. It will likely keep that title next year. Some cities have higher minimum wages, including Seattle and SeaTac. Neither has yet announced their minimum wages for 2022. In 2021, SeaTac’s minimum wage for hospitality and transportation industry employees is $16.57 per hour (it will increase by inflation next year). In 2021, Seattle’s minimum wage is $15.00 or $16.69 per hour, depending on the size of the employer and whether employees receive medical benefits or tips. Under Seattle’s ordinance, the minimum for small employers who pay towards medical benefits or whose employees earn tips will increase to $15.75 per hour in 2022. The minimum for other employers will be $16.69 increased by inflation.
Clearly, there’s already regional variation, but only, it appears, on an upward ratchet. The argument for an adjustment for lower living costs in rural communities is compelling.