The Seattle City Council has approved a new minimum wage that will be phased in over several years.
President Obama and many congressional Democrats want to raise the federal minimum wage to $10.10 an hour. Seattle has one-upped that effort, enacting a $15-an-hour minimum wage for all Seattle employers.
The increase, approved unanimously by the City Council, will be phased in over the next several years, depending on the size of the company and the benefits the employer provides, according to CNN Money. Large businesses need to comply by 2017. All Seattle businesses must enact the new minimum wage by 2021.
“While this is a bold proposal, it is a moderate proposal: There’s a seven-year phase-in,” Mayor Ed Murray said. The process of compromise brought “huge wins” for business, particularly small business, during implementation, the mayor added.
At $9.32 per hour, Washington state already has the highest state-level minimum wage in the U.S., CNN Money said. The federal minimum wage is $7.25 an hour. But a quarter of Seattle residents earn $15 or less per hour. And nearly 14 percent live below the federal poverty level. It’s estimated that more than 100,000 Seattle workers will benefit from the higher wages.
Labor activists have lauded the decision to hike the minimum wage, while others, like Forbes’ contributor Tim Worstall, have predicted dire consequences. Worstall wrote:
So that’s what we would expect from this rise in the Seattle minimum wage to $15 an hour. Some rise in unemployment. A much larger rise in high school graduate unemployment relative to the general unemployment rate. And a significant reduction in the job-related benefits that workers receive.
Proponents of the hike in wages argue that it will give greater buying power to workers who earn the least.
Of course, it remains to be seen how this hike in wages – which will bring the city’s minimum up to about 59 percent of the current local median wage – will impact Seattle. I think one thing is certain: When people debate the potential implications of raising the minimum wage, all eyes will be on Seattle in the coming years.
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