Initiative 1433: Con: Heed warnings on Seattle wage hike before changing law

This fall, voters will decide whether the state’s minimum wage should be increased to $13.50, and if employers should provide paid sick leave for every worker.

Before casting their ballot on Initiative 1433, voters should heed the warning of the University of Washington researchers who have studied the impact of Seattle’s new $15 minimum-wage law.

The UW study, which examines the first-year implementation of Seattle’s minimum wage law to $11, reveals while Seattle’s lowest-wage workers are earning slightly more, they have suffered reduced hours and lower rates of employment.

Even worse, as a result of what the study calls the “negative unintended consequence” of fewer hours and reduced employment, Seattle’s lowest-wage workers are actually doing worse compared to low-wage workers in other parts of the state. Despite the city’s hot economy, Seattle workers are “lagging behind” their counterparts from other cities with less robust economies.

The UW study also reveals prices in the restaurant industry, heavily reliant on minimum-wage workers, increased an average of 9 percent after Seattle’s wage jumped to $11. Even more concerning, many Seattle employers reported they will no longer hire unskilled and inexperienced workers for entry-level jobs.

In their conclusion, the UW researchers include a warning cautioning against assuming a higher statewide minimum wage would have the same modest effects as Seattle’s. They point out a high minimum wage could have significant negative impacts on local economies that are not as strong as Seattle’s.

Of course, even with their strong economy, Seattle’s low-wage workers are not doing as well as other low-wage workers in the state. And that is just with the city’s first phase-in of the minimum wage at $11.

What will the impacts be of this year’s $13 wage on low-wage workers in the city, or the final wage of $15? And what happens when Seattle’s economic boom sputters out?

Only time will tell.

Unfortunately, we don’t have that time before voters cast their ballots on I-1433. We don’t know what the “unintended, negative side effects” might be of a $13.50 minimum wage in cities whose economies are not nearly as strong as Seattle’s, and whose cost of living is much lower.

For example, the cost of living is so low in Kennewick, workers earning the state minimum wage of $9.47 enjoy the nation’s highest “real” minimum wage. Spokane ranks third and Yakima ranks seventh, thanks to those cities’ below-average cost of living.

The flip side to those below-average costs of living is higher-than-average unemployment rates. Yakima’s unemployment rate is a high 7.2 percent, compared to the state’s overall rate of 5.8 percent. Spokane’s unemployment rate is slightly better at 6.8 percent with Kennewick’s at 6.6 percent.

What we do know is those unemployed workers will not benefit from a $13.50 wage and paid sick leave mandate.

Considering Washington is already struggling with the nation’s seventh-highest unemployment rate, perhaps we should focus on policies that would create more jobs instead of imposing even more limitations on the state’s labor market.

Erin Shannon is the director of Washington Policy Center’s Center for Small Business and Labor Reform. WPC is not affiliated with the No on I-1433 campaign.