Jobs

A Seattle Compromise Brings America's First $15 Minimum Wage


A restaurant worker in Seattle

Photograph by AP Photo

A restaurant worker in Seattle

Update 6:40 p.m.: Seattle’s City Council unanimously approved the $15 wage.

A rally is already under way outside Seattle’s City Hall on Monday afternoon as lawmakers gather to vote on a measure to raise the minimum wage to $15 an hour. The bill is expected to pass—even unanimously—after surprisingly civil negotiations took place under deadline pressure that seems poised to create the highest citywide wage in the U.S.

Seattle Mayor Ed Murray generally managed to avoid the toxic battles that have plagued minimum wage efforts in other cities, deftly creating an Income Inequality Advisory Committee of business executives, union leaders, and community advocates and setting a four-month clock for hashing out a deal. The goal was to avoid a costly and nasty battle of ballot initiatives come November. The mayor had vowed to put forward a plan of his own if the group failed.

The advisory committee reached a delicate compromise that was announced on May 1 and that would introduce the $15 wage level over time, depending on an employer’s size and whether workers receive tips and other benefits such as health care. By 2025, the bill would have all Seattle employers paying the same minimum. It’s an agreement that no one loves but almost everyone says they can live with.

The mayor submitted the proposal to the city council, which over the past month considered the compromise and looked at potential tweaks. David Rolf, president of a local SEIU health-care union and co-chair of the mayor’s committee, says there was a lot of “angst and drama” about potential amendments that each side wanted but that threatened to unravel the deal. Socialist City Council member Kshama Sawant argued that large employers should need to pay $15 an hour starting in January 2015, rather than two years later, as the agreement calls for. And business interests wanted to change how large employers would be defined. The initial proposal set the cut-off at 500 employees, based on the number of individual workers, but some businesses wanted it to be based on a “full time equivalent” headcount, whereby part-time employees would count as fractional workers.

Neither amendment passed. The council’s minimum wage committee considered 16 amendments (PDF) last week. The committee expanded the statute of limitations for workers to sue for back pay from 180 days to three years and reduced the pay level for teenagers—a move that triggered hissing from activists during the vote. At the end of the session, however, the committee unanimously passed the bill and the packed room erupted in cheers.

“Ninety-eight percent of what was recommended was part of the final deal,” Rolf says. ”The details were the details for a reason.” Howard Wright, founder of Seattle Hospitality Group and the other co-chair of the mayor’s committee, says that while he wishes some changes had been successful, the agreement is palatable. “I have to look at the forest and not at the trees,” he says.

Wright acknowledges that it’s almost humorous that he—as a businessman with about 400 employees—is looking forward to approval of the bill raising the wage. “I am afraid that this agreement is so tenuous and had so many loose ends that it would become unraveled if we kept in the public forum any longer,” he says. “I’m saying hurry up and pass it.”

Weise_190
Weise is a reporter for Bloomberg Businessweek in New York. Follow her on Twitter @kyweise.

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