The debate is on in Washington’s governor’s race over how much money low-wage workers should be paid.
In one corner, Democratic Gov. Jay Inslee is backing Initiative 1433 to boost the state’s current $9.47-per-hour minimum wage to $13.50 an hour by 2020. The measure, which requires employers to provide up to seven days of paid sick leave a year, is up for a vote on November’s general election ballot.
In the other corner, Bill Bryant, the Republican candidate for governor, says Washington should think more like Oregon and adopt a minimum wage that varies based on regional economies.
Washington, where the minimum wage is tied to inflation under a 1998 ballot measure, had the highest base wage in the nation as recently as 2015.
But other states are leapfrogging it. Connecticut, Alaska, Massachusetts, Rhode Island, California and Vermont have minimum wages that exceed Washington’s, according to the National Conference of State Legislatures.
Inslee has called the state’s minimum wage “untenable.”
“You cannot live on $9.47 an hour anywhere in the state of Washington,” he said.
Inslee calls I-1433 a “reasonable, common-sense approach,” that would improve the living conditions of families and help reduce homelessness without hurting the state’s economy, he said.
A $13.50-per-hour minimum wage still would be lower than Seattle’s soon-to-be $15-an-hour minimum wage, he said.
(Bill Bryant’s plan) is all hat, no cattle.
Democratic Gov. Jay Inslee
Bryant said he’s worried the policy would reduce the number of jobs available to low-wage workers in nonurban areas.
“I think if you take a one-size-fits-all approach based on King County’s cost of living, it could cost some people to lose their jobs,” he said.
Allowing for regional differences
Bryant, who has yet to reveal a detailed minimum wage proposal, is looking for inspiration from Washington’s southern neighbor.
Oregon approved a three-tiered minimum wage hike this year based on the state’s differing economies. The system was brokered by lawmakers worried too high of a statewide minimum wage could hurt people living in more rural areas and legislators concerned a salary floor too low would hurt low-wage workers in cities.
Portland’s metro area will get a $14.75-per-hour minimum wage phased in by 2022, while counties designated as nonurban will reach $12.50 an hour. The rest of the state will see a $13.50 minimum wage in the same time frame.
Specifics of how Bryant would implement an “Oregon model” in Washington is “an issue that we need to figure out” with help from the Legislature, he said.
But Bryant said he wants to keep a statewide minimum wage that increases with inflation, adding, “the question is then do we need to have additional increases where the cost of living is exceeding inflation rate?” King County is one area Bryant said might need a pay hike.
His solution is to work with county government leaders and calculate minimum wages on a countywide basis to create “regional uniformity.”
The few cities in Washington with higher minimum wages complicate Bryant’s vision of regional consistency. Tacoma’s minimum wage will soon be $12 per hour and Seattle plans to ratchet up its salary floor for large businesses to $15 an hour by 2017.
I think if you take a one-size-fits-all approach based on King County’s cost of living it could cost some people to lose their jobs
Bill Bryant, Republican candidate for governor
Bryant is against the idea of cities raising their own wages, which he said creates a confusing patchwork of rules for businesses that operate in more than one city. But he isn’t proposing the state bar cities from raising their own minimum wages as Oregon does.
He also wouldn’t roll back existing minimum wages of local governments, whether they’re using the current state standard of $9.47 an hour or their own.
“I don’t think you’re ever going to go backwards,” he said.
Inslee argues that I-1433 is more like Oregon’s plan, given that it raises the statewide minimum wage but preserves the ability of cities to set higher wages that reflect regional differences.
Bryant “has not proposed a nickel increase in the minimum wage anywhere,” Inslee said, later describing Bryant’s plan as “all hat, no cattle.”
Researchers see advantages
Some economists and academics like the idea of a regional minimum wage as a way to help workers across differing regional economies.
Christopher Thornberg, a California economist with a specialty in regional economics, said any increase in the minimum wage has the positive effect of increasing pay for some workers and the negative of businesses hiring fewer people and raising their prices.
But the balance of those depends on how much the minimum wage is increased, and what the local cost of living is.
He cited California’s plan to raise the minimum wage to $15 an hour across the state by 2022 as creating “more of the negative and less of the positive” in areas like Fresno and Bakersfield, while having a mostly positive effect in big cities, such as San Francisco.
The same could be true about a uniform minimum-wage hike in Washington, said Thornberg, a founding partner of the independent consulting firm Beacon Economics.
“Clearly the argument that having different prices in different places makes more sense,” he said.
Arindrajit Dube, an economics professor at the University of Massachusetts Amherst and Boston University, said he hasn’t found clear evidence of job losses because of statewide minimum wage raises. But he likes Oregon’s strategy because “having major cities and metro areas with higher minimum wages than the rest of the state is often advantageous.”
To Inslee’s point, Dube said having a uniform minimum wage across the state while allowing Seattle and other cities to set their own minimum wages “is not very different” than Oregon’s setup.
Then there’s the question of how high the minimum wage should be. About half of the median full-time wage can be a reasonable benchmark, said Thornberg and Dube.
Washington’s current minimum wage falls short of that rule of thumb in some areas and exceeds it in others. According to 2014 data from the state’s Department of Employment Security, the most recent available online, that would be around $11.31 per hour statewide, $13.91 an hour in King County and just $7.37 an hour in Yakima County.
No consensus in Olympia
Compromise on raising the minimum wage has escaped Washington lawmakers, who have relied largely on the 1998 ballot measure to keep it ticking upward.
One 2015 effort pushed mainly by Democrats to raise the minimum wage to $12 an hour in a four-year period was blocked by Senate Republicans over concerns the hike would kill jobs and hurt businesses.
Republicans also have tried to alter the state’s minimum wage, with proposals for lower, or “training,” wages for teenage workers in the summertime.
Rep. Jessyn Farrell, a Seattle Democrat heavily involved in the minimum wage debate, said a regionally tiered minimum wage is a fine policy, as long as the floor is high enough. She’s a supporter of I-1433, but said “even at $13.50, in communities across the state, you’re barely making it.”
“If (Bryant) were proposing a $14-an-hour minimum wage for Yakima, I’d say ‘Yeah that’s a great place to be,’ ” she said.
Rep. Matt Manweller, a Republican from Ellensburg, said he would be interested in Oregon’s approach if it was used to mitigate a high state minimum wage in areas where it “could be devastating to the labor market.”
“If the default or the status quo is some insane minimum wage that is far beyond the market wage everywhere in the state but Seattle, then it’s a good idea,” he said of a regional minimum wage. One statewide minimum wage closer to $10 an hour is preferable, however, over regional minimum wages that rise to $13.50 per hour in nonurban regions, Manweller said.
While Bryant has yet to commit to any numbers, Inslee is sure $13.50 is the right approach.
“There’s nowhere in the state of Washington where you’ll be overpaid at $13.50 an hour,” Inslee said.
Washington’s minimum wage:
$9.47 an hour
The proposed minimum wage under Initiative 1433:
It would be raised incrementally across the state to $13.50 an hour by 2020.
California’s minimum wage:
$10-per-hour, but set to boost to $15 an hour by 2022 for employers with 26 or more employees.