Could you afford to pay your employees $15 an hour? If not, don’t move to Seattle.
The Seattle City Council unanimously approved a $15 minimum wage — the highest big-city minimum wage in the U.S. — for workers in the Emerald City. Yes, you saw that correctly. That is more than double the federal minimum wage.
The reason for the major jump? Council members want to make Seattle an example of the urban movement to address income inequality. Even though Washington — at $9.32 — already has the highest minimum wage in the U.S., 13.6 percent of Seattle residents live below the federal poverty level, according to the city’s website.
The short-term benefits are obvious — and attractive — but the long-term implications of such a drastic rate increase are unclear.
A New York Times article says some local business owners are concerned that a fat wage increase is temporary at best and an illusion at worst. They argue it gives workers — and the general public — false hope about the city’s economic stability.
However, council members stand behind their decision. “Even before the Great Recession a lot of us have started to have doubt and concern about the basic economic promise that underpins economic life in the United States,” said Sally J. Clark, one of the council members who voted in favor of the increase, in the article. “Seattle answers that challenge. We go into uncharted, unevaluated territory.”
Small business owners won’t feel the effects of the change immediately — low-wage workers will receive the increase in incremental stages, with different tracks for different sizes of business.
According to the article, the phase-in will affect employers with more than 500 workers first. The hourly wage will increase to $15 by 2017 for those employers with more than 500 workers who do not provide health insurance. By 2018, large employers who provide health insurance must implement the new wage.
The new minimum wage will be phased in through 2021 for smaller employers.
So those of you who own small businesses in the Seattle area can breathe a sigh of relief because you won’t have to fork over more money just yet.
And for business owners in other parts of the country, this might be worth keeping on your radar in case this is just the beginning of a larger — more expensive — war on wages.
How would a $15 minimum wage affect your business? Post a comment below.