WITH talk of a jump to a $15 minimum wage, Seattle is barreling headlong into a serious gamble with its local economy.
No other American city has conducted such a big experiment with the minimum wage. A $15 wage floor would leap 61 percent above what is already the highest state minimum wage. With no neighboring cities considering such a jump, Seattle would be a high-wage island. And doing this $5.68-an-hour jump quickly, as is proposed by advocates, offers little margin for error.
The seeds of this idea are rooted in an undeniable truth. The U.S. economy has become radically tipped toward Wall Street wealth. The top .01 percent of Americans — the top 1 percent of the 1 percent — hold assets equal to the wealth of the bottom two-thirds, and their share is skyrocketing.
With the rise of a new Gilded Age, no wonder local, state and national public-opinion polls on the minimum wage — the leading proxy battle for income inequality — are indicating a strong desire for an economic leveling. There are compelling reasons — for the local economy, and for social justice — to raise the wage floor.
But to what? The $15 figure is an unproven number, no more or less defendable than $13.48, which respected local economist Dick Conway has suggested. Venture capitalist Nick Hanauer, an early champion of the $15 wage, admits he picked that number as a midpoint between two economic indicators. It is a guess.
It is also a distraction from the surest boost up the income ladder: education. The minimum-wage debate has sucked the oxygen out of Seattle’s civic room at a time when the city should be debating how to expand and fund universal, high-quality prekindergarten instruction.
Nonetheless, Mayor Ed Murray set a deadline of April 24 for his income inequality advisory group to emerge with a recommendation. That should be a starting point, not the end.
A higher minimum wage must be gradually phased in. The counties adjoining Washington, D.C., recently decided to ease in a $4.25 wage increase over four years. A bigger jump should include a longer runway.
Any increase should count employer-provided health benefits, and other taxable tip income. A “total compensation” calculation would ensure a boost to less-well-paid employees in restaurant kitchens, while preserving healthy tips for servers. It also provides incentive for employers to offer health care and other benefits, such as the $22,000 in scholarships that Dick’s Drive-in offers employees over four years.
A higher wage should be particularly attuned to concerns in the manufacturing and industrial sector. Their customers are mostly outside the city; their products are very price-sensitive; and their blue-collar jobs are coveted by neighboring municipalities.
Likewise, concerns from nonprofit organizations must be taken seriously. Human services are heavily dependent on state and federal funding. Assuming the state Legislature or U.S. Congress will increase grants because Seattle wishes to engage in this experiment is simply unrealistic.
Advocates for a $15 wage also assume a higher minimum wage would reduce demand for human services. That’s a guess, and it gambles with the short-term financial viability of the nonprofit-led safety net.
Significantly, no other local city is proposing such a broad wage hike. They’re waiting to see how far Seattle jumps in this risky experiment, and if it can stick the landing.
Editorial board members are editorial page editor Kate Riley, Frank A. Blethen, Ryan Blethen, Sharon Pian Chan, Lance Dickie, Jonathan Martin, Erik Smith, Thanh Tan, William K. Blethen (emeritus) and Robert C. Blethen (emeritus).