Spokane7
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October 8, 2011 in Opinion
Editorial: Minimum wage in Washington needs fixing
The state’s minimum wage will inflate to $9.04 per hour on Jan. 1, making Washington the first state where the greenest of workers will earn more than $9.
The minimum has climbed almost annually every year since 1998, when Washington voters approved a measure that pegged increases to inflation, but not just any inflation. The hikes track a federal index tied to urban wage earnings nationally, the benchmark that has risen fastest over the years.
And the wages can never fall. Even though the index fell two years ago, a court ruled the law did not allow wage reductions – a deal many other workers further up the pay scale would take in a heartbeat right now.
So, those minimum wage employees who work full time – and many, many do not – will get an additional $770 in cash compensation in 2012 compared with 2011.
Is the additional 37 cents per hour enough cause for struggling small business owners to lay off anyone? Unlikely, at least according to past studies that looked at minimum wage hikes and shifting employment levels, and found no correlation.
Will any business move? Again, unlikely. The types of businesses that pay the minimum – food service, retail, agriculture and some health care – are not very portable. Restaurants and stores have to stay close to their customers, hospitals close to their patients. Farm and farm-processing jobs are more or less fixed to the land.
The escape valve for Spokane-area employers is North Idaho. But how many Spokane consumers will follow a restaurant or retailer over the border, where employers need pay only $7.25 an hour, the national minimum wage? A more likely scenario is Idaho workers competing for jobs in Spokane. Four years ago, when unemployment was below 3 percent in North Idaho, businesses had to match Washington’s minimum just to hold on to their workers. With three times as many looking for a job now, that’s no longer an imperative.
The Washington Restaurant Association notes the industry has cut 10,000 jobs in the last year. The typical Washington restaurant employs three fewer employees than comparable establishments in other states. Try to find help in some big-box stores, and there’s almost a sense of abandonment.
Although no one may lose a job when wages go up, it’s a sure bet no one gets hired.
Attempts have been made in the Legislature, and will be made again, to introduce a lower “training wage” for workers with less than four months experience. The $7.25 per hour rate would be the training minimum.
Some alternative might be worth trying, but $7.25 seems like too little to get anyone other than teenagers interested. They are the workers most likely to be exploited by unscrupulous employers, and the least likely to complain. Enforcement could become a nightmare.
Better, perhaps, to adopt a wage inflation index more indicative of a broader labor market, and at least hold Washington’s increases to those made by the nine other states – soon to be joined by others – that allow annual adjustments to their minimums.
There has to be a balance between worker earning power and employer staying power.
Trudy Rubin: Egyptians say no to Islamists 
drywitt99 on October 08 at 6:55 a.m.
So this HUGE increase will not result in anyone being laid off……no businesses will move out of state because of it…
and it WILL put cash into the hands of people CERTAIN to spend it.
So….it makes life a little easier for our lowest paid workers…..and it is an economic stimulus for the economy.
Can anyone at the S-R say win/win??
Orphan on October 08 at 7:46 a.m.
37 cents per hour will not cause any business to move, I have to mostly agree with that.
How ever it may cause someone looking to start a new business to go else where like N Idaho. I personally will not start a new business in the state of Washington again.
It will cause a price increase to cover the additonal cost of labor. That price increase will be passed on the the consumers in the form of more expensive goods and services. In the end the lower wage folks end up paying the brunt of the increase.
The 37 cent increase costs more than just 37 cents to the employer in higher unemploymnet insurance, social security costs, B&O taxes, labor & industries tax, income taxes etc.
Increasing the minimum wage drives up the wages of the people earning slightly more than minimum wage that costs the employer even more than the increase for minimum wage. See the above for results.
A high minimum wage prevents younger kids from getting jobs by taking away the incentive to hire someone without much experiance.
All in all raising the minimum wage simply increases the state’s income by increasing the cost of goods sold thus increasing the amount of sales tax generated. So for sure the state likes it. OH and by the way consumers pay that higher sales tax.
JBlim on October 08 at 7:54 a.m.
No drywiit, the SR is into suffering (unless you’re wealthy). They want everyone to be miserable. That’s the only solution. Because even though the facts don’t support conservative economic dogma, they must adhere to it religiously.
Orphan on October 08 at 8:09 a.m.
Jblim Yes everyone at the Spokesman stays up late looking for ways to make people suffer, man you really nailed it there, all this time they thought they had you fooled.
What facts are those?
JBlim on October 08 at 8:42 a.m.
Orphan, I was referring to the editor and owners of SR, not “everyone who works there.” As to your question, the SR cited them: “according to past studies that looked at minimum wage hikes and shifting employment levels, and found no correlation.”
So what’s their problem?
Orphan on October 08 at 9:04 a.m.
Blim their problem and mine is there is much more to it than just looking at if raising the minimum wage shifts employment levels. That is about as effective as only looking at your daughters dates shoes and deciding of he should be dating her or not.
kristjandye on October 08 at 9:32 a.m.
Orphan, if you dont want to start a business in washington, thats great. We certainly have enough folks that think like you and i am sure you could find even more people to talk to in Idaho. But your list of facts you cite is questionable. We have no income tax here, and those other awful taxes you list are things that help workers, like social security. And what part of people making more than minimum wage getting a raise is bad? Sounds like an actual tide that raises all boats, unlike the eyewash ronnie tried to sell.
richard on October 08 at 10:01 a.m.
Mind telling us what those FACTS (that don’t support conservative dogma) are?
Almost all serious studies; many economic principles dexcribe exactly how raising the minimum wage above certain levels result in fewer jobs for the same people the minimum wage laws were designed to help.
I guess that makes you anti-science, JB. You spout myth over facts.
Show us one serious study that demonstrates that most minimum wage raises result in more jobs and better lifestyles for those workers.
Please.
Orphan on October 08 at 10:46 a.m.
Kristjandye Of course we dont have a Washington state income tax, I was refering to Federal Income tax. Here is how it works when the cost of doing business raises the employer is doing more dollar volume and thus making more profit, when he charges more for his product he makes more money so he pays more in income tax it is that simple. Assume a 5% profit when the employer raises his price and maintains his 5% profit margin he will pay more in income tax.The employer will/has to raise the cost of his goods to cover the extra expence of paying income tax.
Now as to those other awful taxes you mention when the minimum wage goes up the employer pays more into SS, Unemployment, L&I etc it is exactly proportional to the amount of wages paid. The higher the amount of wages paid the more the business owner has to pay. The business owner raises his price on the goods he is selling to pay for the increased costs. Every business has to do this or they would soon be not making any money. For example using SS only that 37 cent increase costs the employer 39.57 cents not 37 cents add it all together and that 37 cent raise costs about 50 cents per hour. I am using round numbers here so the real number is slightly different. BTW the employee also pays more into SS so on his 37 cent raise he pays about 2.5 cents into SS so his raise is cut down to 34.5 cents. Its really less than that after higher costs for goods and services he now has to pay more for.
There is a lot more to it than just a 37 cent per hour raise look at the big picture please.
gmorton on October 08 at 11:09 a.m.
Editorial:
“The escape valve for Spokane-area employers is North Idaho. But how many Spokane consumers will follow a restaurant or retailer over the border, where employers need pay only $7.25 an hour, the national minimum wage?”
Orphan pretty well nailed it, but I’ll add my 2 cents.
The quote above is the wrong measure. Few merchants will actually move because of an increase in minimum wage. They will simply reduce employment and/or raise their prices to cover the increase, which will result in lower levels of service and fewer sales. When sales fall far enough, the business will close. In the meantime the increased costs reduce the appeal of expanding existing businesses or launching new ones, so economic growth slows.
Minimum wages are not the only factor affecting these decisions, of course. So do workman’s comp rates, unemployment insurance rates, health care mandates, permitting delays and costs, environmental, labor, and other rules, and taxes. I.e., what matters is the total government burden on the economy.
How much does that matter? Well, one indication is the relative job growth rates is Spokane and Kootenai Counties over the last decade:
Kootenai County: 32.4%
Spokane County: 14.1%
http://www.zoomprospector.com/CommunityDetail.aspx?id=91&f=1
JBlim on October 08 at 11:26 a.m.
richard, if you want to get up to speed, go here for a review of the literature:
http://www.epi.org/publication/bp178/
“Since the last federal minimum wage increase in 1997, state minimum wage increases have provided an important boost to the incomes of low-wage workers and their families. These states have provided a testing ground for the exaggerated claims of harm made by minimum wage opponents. If the minimum wage had substantial negative effects on the economy or the well-being of low-wage workers, then it would have been observed in these states. The reality is that the states with higher minimum wages have not seen ill effects. This has been shown both in rigorous econometric studies and in assessments of broad economic indicators. These findings confirm what has been seen in a variety of other economic analyses of the minimum wage.”
Benaround on October 08 at 11:28 a.m.
Many of the 18yr. to 34 yr old ultra-lefties pretend they care about employment when in many cases they enjoy and support this
states Democrat platform of many years which urges:
Legalizing Marijuana
Staying on parents health care until 26…
A high minimum wage to make hiring scarce when combined
with nose and eyebrow piercings and tattoos…
“Gee mom…nobody will hire me”
This is the”Slackers Hat-Trick”
Quit lecturing me on simple math and go back to the basement.
Dazzeetrader11 on October 08 at 1:17 p.m.
I worry about the workforce being skilled and WILLING to work.
Something about the culture these days fuels my doubts.
An increase in minimum wage doesn’t seem like much…..until one looks at the complete expense to open and run a business in Spokane. Other expenses include much igher expenses in ALL areas without much support from the State.
GM is correct. Just look at the disparity. I’ve had calls from Idaho just begging to locate in Idaho. The packages are much more attractive for growth of both small and large business.
There’s a reason why Wa St has the highest minimum wage in the country. It’s the culture of expectation that somebody will pay more. It’s that same culture that makes Idaho look better.
JBlim on October 08 at 3:13 p.m.
Dazee says “Other expenses include much igher expenses in ALL areas without much support from the State… ”
What!?!?? Big business woman Dazee wants support from the state?? I suppose you want all us taxpayers to help support your business? Good grief, the hypocrisy.
Dazzeetrader11 on October 08 at 6:55 p.m.
Blimster…the State does have a relocation fee for businesses who want to move there. Then comes the B and O and a whole host of other fees. It’s not a welcoming place. We tried. Just better elsewhere. Not asking for help but there are penalites…..
As far as YOU go Tobias.. you’re irrelevant. It’s very difficult to find motivated 20 somethings. I do think it’s the culture of spoiled children. Very few are hungry and will prepare themselves. Entitlements do spoil things. You do know the unemployment rate for college grads is about 4.5 to 5% don’t you?
Worried about the rest. They want things but will they work hard for them? I think a job these days must be fun for that group…kinda like a hobby. Well, most jobs are fun all the time. Responsibilities seems to cramp the style of the younger or even older people who love selected entitlements. Just the way it is Mr Filthy mouth. Go carry some signs near the Spokane Club..you’ld likely fit with that crew.
JBlim on October 08 at 7:36 p.m.
Dazee, kids aren’t much different now than they ever were. You’re just slurring them now because they don’t agree with you. Teabagger rallies are fed up patriot citizens, but the occupy Wall Street types are lazy, dirty hippies or whatever. You’re just like Fox “News.”
tobiasg on October 08 at 9:16 p.m.
Well dazzee, its hard to find old people like you that value hard work. Everything handed to you, silver spoon, etc. As I’ve said before, try working for once in your pathetic life.
Dazzee despises anyone who gets their hands dirty for a living.
DDC on October 08 at 9:17 p.m.
The person who takes the risk, invests the capital, provides the opportunity and creates the market is the person who has earned the right to define the reward. Minimum wage diminishes that right and it’s the potential employees and The State that suffers because of it.
tobiasg on October 08 at 9:33 p.m.
DDC says “those with silver spoons embedded in their rears and those built a fortune get to drive the economy into the sewer so they can earn more while paying people less than they deserve”
DDC on October 08 at 10:18 p.m.
Given the fact that you have 7 pages of comments in the last 4 weeks on this site, I can tell it’s pointless to engage a discussion with someone who has more time on their hands to distort others comments than formulate their own….but I’m comforted by the fact that, while you infer that you know what others “deserve”, you probably have very little authority to do so in the real world…which explains your multitude of frustrations.
tobiasg on October 08 at 10:45 p.m.
DDC, so because I care and post a lot means I have no valid opinion?
Just because I do not despise the working class like you and dazzee, doesn’t mean I cannot say what appears to be truth.
What do you have against normal people? Obviously both you and dazzee prove that class warfare exists…rich vs. poor (or what was once the middle class). Working hard for a decent wage is what used to make us great…welcome to China kids.
Traveler on October 08 at 10:48 p.m.
Ahh, statistics.
Kootenai County*: 32.4% (of 72,189 jobs = 23,389 new jobs in 10 years)
Spokane County**: 14.1% (of 243,525 jobs = 34,580 new jobs in 10 years)
So while one county has created more than 34,500 new jobs in 10 years, the one right next door — with fewer people and a higher unemployment rate — has created 33 percent fewer jobs in the same period.
* (current unemployment rate 9.9%)
** (current unemployment rate 9.0%)
Dazzeetrader11 on October 08 at 11:12 p.m.
I wish they would ALL be hard workers Blim. I wish they all were motivated too. The OCCUPY people are not wrong in many ways. The banks and wall st folks skinned the public…no doubt.
I’d put many of them in jail.
I don’t know what dirty hippie means. I value the work and the worker… not what the worker looks like.
Tobias you need to think for yourself. I think you listen and watch the liberal left too much It does seem to influence you quite a bit.
People don’t “deserve” a certain wage because the government says so or sets a minimum. When the economy talkes a nosedive( like NOW) how is it that their wages doesn’t fall too? Mine does.
Minimum wages are kinda like bribes. It’s entitlements that are costly to everyone. Is anyone really entitled to something because someone else (not them) takes big risks? Not sure why? Yet somehow, the public believes they will work for “no lower” than what the governments says. Nonsense. Get an education, take some risks, invest your nestegg and see what happens.
There is NO class warfare in reality. Some do well and some don’t. Politicians and the media decide there’s warfare. Flashy term but it’s irrelevant. Good to bias the weakminded non thinkers…but it’s not real..unless someone wants it to be….for other reasons…Obama likes it because it helps him get votes. He like to isolate smal groups and define them. Just like Saul Alinsky did. It’s the lifeblood logic of community organizers.they find a bunch of suckers and fire them up against a target. Silly stuff. Divisive too. Causes fear in some, disgust in others.
Politicians….sheeeeeesh…..I will be happy to see these frauds go. They are an insult to the American worker.
DDC on October 08 at 11:16 p.m.
TB, I believe your opinion is valid, I believe your immediate assumptions about me are not.
It’s the complexity of our community that prompts hostile exchanges, yet it all boils down to refusal to understand the others perspective.
I have employed people and I have been employed. Not all people want to be entrepreneurs and not all people want to be employees. There’s nothing intrinsically wrong with either.
Wealth normally occurs after someone engages in a somewhat pathological pursuit of passion…the examples are numerous…one passed away this week. To paint them with the broad brush of corporate greed is inaccurate and counter productive…on the other hand, to paint “normal people” as unmotivated slugs is also highly inaccurate and counter productive. Class warfare is a condition of media exposure and a convenience of politicians. If you want more of the pie and control over your destiny, take the risk and pursue your passion. Money sometimes follows in greater reward than “having a job”, which also is not a sin, and it fits some people just fine…..and they deserve to be compensated for it.
We disagree, but we can discuss without acrimony.
tobiasg on October 09 at 2:23 a.m.
Dazzee, I think for myself…it is you that thinks only with your greedy checkbook. It must be so nice to have EVERYTHING handed to you on a silver platter.
I’ve read your posts, I’ve read your disdain for the working class. Now shut up.
Rand on October 09 at 8:28 p.m.
Toobias,
I am sure your employer would pay you what you are worth. The only problem is their is a minimum wage.
tobiasg on October 09 at 11:31 p.m.
Haha Rand, I’m so glad I’m not like you guys. I work for a living and I have empathy for those who work hard to pay the bills. I have no empathy for those who cry about hard working people that are lazy…whatever that means.