City Hall

With Labor and Business Support, Murray Announces Minimum Wage Plan

Murray announces a minimum-wage proposal that would phase in a $15 minimum over three, four, five, or seven years, depending on the size of a business and what benefits they provide.

By Erica C. Barnett May 1, 2014

Mayor Ed Murray proposed a complicated plan this morning to raise the minimum wage to $15 an hour in stages, based on business size and whether a business offers health care or has a business model that relies on tips. The proposal includes a temporary tip credit and "total compensation" for some businesses, to be phased out over time. (More details below).

"Once again, Seattle has chosen to collaborate, and Seattle workers are going to get a raise," Murray said. "We will avoid a costly initiative battle. [And] hopefully here in this city, on this day, we will start taking those first steps, those next steps, toward a living wage."

"This proposal will put dollars in the pockets of a huge number of Seattle workers that will recirculate into the local economy," SEIU 775 leader, and committee co-chair, David Rolf said. "What will be remembered is that one community in the upper left corner of this nation had the courage to step up and fight for the middle class when it was at risk."

The announcement came just a few hours before this year's annual May Day protests, at which supporters of 15Now, the no-compromise, no-exemption $15 movement, will be marching, speaking, and gathering signatures for their initiative. Murray said he didn't choose today for his announcement on purpose; the group just happened to come to a deal last night, and he knew it would leak in the media.

"It's easier to keep secrets in Olympia than it is in Seattle," the longtime former state legislator joked.

Murray's time in Olympia as a legislator where he mastered the art of compromise, clearly came into play during the last four months of negotiations—or more accurately, the last week. The announcement represents a major victory for Murray, who managed to achieve a super-majority of 21 "yes" votes among the 24 members of his Income Inequality Advisory Committee.

The agreement brings together both business and labor representatives, including small-business leaders like restaurant owner and band manager Dave Meinert, big business like Nucor Steel, non-profits like Solid Ground, and most importantly, hard left unions like UFCW Local 21, the lefty grocery workers' union and SEIU Local 775, the home health-care workers' union that ran the Sea-Tac $15 minimum wage campaign. 

Chamber of Commerce leader Maud Daudon abstained, while Retail Lockbox owner Craig Dawson and city council member Kshama Sawant voted "no."

The broad support from business and progressives takes some steam out of two potential competing ballot initiatives, one from business and particularly one from the left. 

The broad support from business and progressives—including from a coalition of  lefties called 15 for Seattle who we mistook for protesters outside the press conference, but were there in support representing groups such as El Centro de la Raza, OneAmerica, the Community Action Network, Puget Sound Sage, and small businesses like Cupcake Royale— takes some steam out of two potential competing ballot initiatives, one from business and particularly one from the left. 

The business-backed group OneSeattle, which objected to some aspects of the compromise proposal (for example, they wanted all businesses to be allowed to count "total compensation," including benefits like health care, bonuses, and commission, against the $15 minimum, and supported a sub-minimum "training wage"), has said it would consider an initiative if the mayor's committee didn't come up with a plan acceptable to the group. After Murray's announcement, the group issued a statement saying that they would be reviewing the proposal and deciding what to do next.

And 15Now, backed by City Council member Kshama Sawant, is gathering signatures for its own initiative, which includes only a three-year phase-in for small businesses and no "total compensation" or exemptions. "This is not a complicated discussion. It's very simple. Ask anyone who lives in poverty," Sawant said in a press conference after Murray's announcement. Sawant—a  'no' vote on the committee—said she would continue supporting the signature-collection effort. "This proposal does not live up to the wishes of Seattle workers. That is why I vote 'No' on this recommendation," Sawant said.

"If we win a strong $15 in Seattle it will be a shot in the arm for labor movements everywhere," Sawant said. "Whether we get it through an ordinance or [initiative] is simply a matter of mechanism."

She also said she would work to amend the proposal on the council, where it's headed next. 

Kshama Sawant

The council seems inclined to approve Murray's proposal. Council member Nick Licata, a longtime lefty advocate for low-income people, was a 'yes' vote on Murray's committee and was a prominent presence at Murray's announcement today, where he quoted a passage from Saul Alinsky's Rules for Radicals about how compromise "defines a free and open society. And he called the deal "awesome." "It is awesome that Seattle is leading the effort to close the income gap"—and vowed to "work with my colleagues to pass this proposal with the minimum amount of tinkering possible." City Council member Bruce Harrell was also on Murray's committee with Licata.

Nick Licata

 Here's how Murray's proposal would work. 

"Big" businesses—defined, based on the Small Business Association definition, as those with 500 workers or more—would have to reach a base minimum wage of $15 an hour in three years for employees who don't receive health care, and in four years for employees who do.

(Asked whether 500 employees or less was a meaningful definition of "small" businesses, given that the overwhelming majority of businesses in Seattle have fewer than 500 employees, 15 For Seattle spokeswoman Heather Weiner said most low-income workers in Seattle work for big businesses like McDonald's and Starbucks.)

"Small" businesses, those with fewer than 500 employees, would also have a two-tiered phase-in period, albeit a more complicated one. Employers would be required to pay a minimum base wage of $10 an hour starting next year, which is higher than the 2015 state minimum wage of $9.54.

However, they would also have to guarantee a higher total minimum compensation that would rise every year—starting at a total compensation of $11 an hour in 2015—until it reached $15 in seven years. The difference between the base wage and total compensation could be made up by tips or health care benefits.

Employers that don't provide health care or whose businesses aren't tip-based would have to make up the difference with higher wages. So, for example, if you make a base wage of $10 an hour, plus a dollar an hour in tips or health care benefits in 2015, that's fine; conversely, if you make that same $10 but don't have health care or tips, your employer has to pay you an additional $1 an hour.

As with large businesses, the base minimum wage would eventually rise to $15 an hour—starting in 2021, giving small businesses seven years to adjust to the new higher-wage reality. By 2025, all businesses would be required to pay a base wage of $18.13 an hour; after that, the wage would increase based on CPI every year, just like the state minimum wage.

 I'll be on KUOW at 1:30 today to talk about the deal. Tune in. 


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