Higher minimum wage in Washington could siphon off Kootenai County workers

George Peichev says it’s difficult to find and keep dishwashers at his Post Falls restaurant, GW Hunters. Workers can earn more across the state line, where Washington’s minimum wage is $2.22 an hour higher than Idaho’s.

If Washington voters approve Initiative 1433 next month, the starting wage gap between the two states will grow to $3.75 next year and could be as much as $6.25 by 2020, if Idaho’s minimum wage remains locked at $7.25 an hour.

Idaho businesses near the border will have to raise prices sharply to remain competitive in the job market, or they’ll have to close, Peichev said.

“I don’t understand why they’re going that way, but that’s what is going to happen,” he said. “And believe me, nobody’s going to make more money.”

The disparity in wages between Spokane and Kootenai counties also would be felt north of Coeur d’Alene at Silverwood Theme Park, one of the region’s largest employers of summer workers, many of them high school and college students.

“I think it will have a somewhat dramatic effect, if the jobs are available in Washington,” said John Jachim, human resources director at Silverwood.

“If the initiative passed, I don’t feel that we would be able to keep our wages the same and be competitive,” Jachim said. “Our wages would have to go up as well.”

And that could lead to higher park prices. “The money would have to come from somewhere,” he said.

I-1433 would raise the minimum wage to $13.50 an hour over the next four years, placing Washington with California and New York as the states with the highest minimum wage.

Such a steep increase in beginning wages in the Spokane market would put pressure on Kootenai County employers, said Samuel Wolkenhauer, regional economist with the Idaho Department of Labor.

“I would definitely expect our entry-level wages to creep up somewhat,” Wolkenhauer said.

“Given how easy it is for people to move between the two labor markets, I don’t think it’s possible for us to not have upward wage pressure,” he said.

The Gem State’s minimum wage remains tied to the federal minimum of $7.25 an hour, which hasn’t changed since 2009. Idaho lawmakers have batted down attempts to raise the state wage and passed a law this year prohibiting cities and counties from adopting a higher minimum wage.

In the past two years, Idaho has ranked ninth in the nation for the percentage of its workers earning minimum wage or less, according to the U.S. Bureau of Labor Statistics. State law provides for a lower wage of just $4.20 an hour for people under age 20 in their first three months on the job.

In Kootenai County, few jobs actually pay the minimum wage. Out of 803 occupation categories, only four – hand laborer, warehouse laborer and a couple of food service prep positions – have entry-level wages within 25 cents of the legal minimum wage, according to the state Labor Department. All but 11 jobs pay entry-level workers above $8 an hour.

“So the functional minimum wage here is definitely higher than the legal minimum wage,” Wolkenhauer said. “But it is not as high as the legal minimum wage in Washington. So it kind of settles there in between.”

If I-1433 passes, far more Idaho workers will be making less than they could across the state line. Of the 803 job categories, 72 in Kootenai County would have a median wage below the new Washington state minimum wage of $13.50 an hour, Wolkenhauer said. That would represent somewhere between 24,000 and 30,000 employees in Kootenai County.

“It is a large number either way,” he said, and covers a lot more than retail clerks, food servers and hotel cleaning crews. It also includes personal service positions, such as home health aides and cosmetologists, and health care support occupations, such as reception, clerical and bookkeeping workers.

“And that’s something people don’t intuitively think of when they think of low-wage jobs or of vulnerable positions,” Wolkenhauer said. “People always worry about manufacturing, for example, and what our factory employment is like. There’s another sector of the workforce that’s very vulnerable like that.”

At Kootenai Health, workers in the lowest-paying positions, such as those in housekeeping and nutrition services, still earn above Washington’s minimum wage. They can earn even more at hospitals in the Spokane market, but “even in that environment, we’ve been able to recruit and retain,” said Kim Anderson, a spokeswoman at the Coeur d’Alene hospital.

That will continue if Washington voters go for the incremental wage increases. “We’ll assess what other organizations are paying so we do remain competitive, even if we’re not the highest paying for a position,” Anderson said.

Silverwood, which hires seasonal workers as young as 14, pays a starting wage of at least $8.50 an hour for jobs like cashier and ticket-taker. Cooks start at $9 an hour, and wages for supervisors are “right in line with what they’re paying in Washington,” said Jachim, the HR director.

The park brought on almost 1,500 seasonal workers this year, about half of them under 18. Many of those younger employees aren’t likely to find similar summer jobs in Spokane County, Jachim said.

But a significantly higher wage in Washington might entice older workers to look for work across the border, he said.

“I mean, it’s a 15-, 20-minute drive to get over to Washington. So I think that is something we would have to take a hard look at,” he said.

The larger job market and higher wages in Spokane County already draw thousands of commuters from the Coeur d’Alene area. Twice as many people commute from Kootenai County to jobs in Spokane County than the other way around, according to Census Bureau tracking.

Almost 15 percent of Silverwood employees commute from Washington, and that number has been growing in recent years, Jachim said.

“Even if they raise this minimum wage, I don’t know that there will be jobs available for people to cross the border to get,” he said.

Back at GW Hunters, Peichev is skeptical that a higher minimum wage will do much to help workers, who might see lower tips or their hours cut. It will, however, lead to higher prices, he said.

“So a $10 hamburger is going to be a $17 hamburger,” he said. “The money has to come from somewhere.”