Seattle’s new $15 minimum wage law began going into effect Wednesday, nearly a year after this pricey West Coast city was celebrated by activists as the first metropolis to push employers into providing higher wages.
The fast food workers who staged walkouts to advance the idea, however, won’t be seeing anything close to $15 an hour in their paychecks this week, as the increase is being phased in gradually through 2017 and beyond.
The change in Seattle is part of a larger trend toward higher wages playing out in statehouses and on ballots across the nation. In November, San Francisco voters approved their own phased-in minimum wage hike to $15 an hour by July 2018.
How it works
Workers at large businesses and national chains in Seattle will see the minimum wage increase to $11 an hour this week, while small businesses are required to pay at least $10, with a $1 credit for tips or health insurance.
It will take until 2017 for Seattle workers at large companies and chains to earn $15 an hour. Those providing health insurance will have four years to comply. Smaller organizations will be given seven years, with the new wage including a consideration for tips and health care costs over the first five years.
Once the $15 wage is reached, future annual increases will be tied to the consumer price index.
Those who work in the suburbs still labor under the state minimum wage, the nation’s highest at $9.47 an hour.
Whom does it help?
A University of Washington study estimated at least 90,000 people earn less than $15 an hour in Seattle.
Some business owners, including those who already pay their employees $15 an hour or more, have said the new wage will be paid by consumers in higher restaurant and retail costs.
Others have said they expect the new wage will give workers more buying power and bring enough new business into their doors to make up for the increase in labor costs.
In the courts
The International Franchise Association and five Seattle franchises have vowed to fight the new law, saying it discriminates against franchises and doesn’t treat them like small businesses as they feel it should.
Ahead of the curve
Several Seattle companies have jumped ahead of the phase-in and are already paying their employees a minimum of $15 an hour, including local restaurant chains Ivar’s, a grocery co-op and small chain Skillet.
Ivar’s, a local seafood restaurant chain, announced they would experiment with a $15 wage with a no tips policy to see what their customers thought.
Across the country
Washington is one of nine states where an increase in the statewide minimum wage is being debated. A Washington state proposal would take the state to $12 in a series of 50-cent hikes every Jan. 1, but that looks unlikely to pass.
Lawmakers in 10 states and the District of Columbia raised their minimums last year, and voters in four other states increased their wages through ballot measures.
President Barack Obama has called on Congress to raise the national minimum wage to $10.10 from the current $7.25 national minimum. Twenty-nine states and the District of Columbia already have a minimum wages above the federal rate.
Seeking more
Seattle venture capitalist Nick Hanauer has been pushing the Washington state Legislature to pass a statewide $12 minimum wage and doesn’t believe Seattle’s $15 law goes far enough.
He has threatened to pay for a ballot initiative to raise the state minimum to $16 an hour if the Legislature doesn’t take action this year.
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