Let’s sever the minimum wage from inflation in WA

Talk to anyone in our state about topics they are concerned with during this election year, and you will hear a lot about homelessness, crime and inflation. Another major concern is the cost of living. As much as homelessness is attributed to addiction, mental health and incarceration, it can be argued that its root cause is the cost-of-living crisis.

As the costs of goods, services and housing continue to rise, more people are pushed toward the margins. What if the increases, including inflation, are not economic phenomena as much as bureaucrat-mandated subscription services?

The Metropolitan King County Council recently voted to increase the minimum wage in unincorporated King County to over $20, citing cost of living. This new ordinance tethers future minimum wage increases to the rate of inflation. Washington’s state minimum wage law also includes this provision. 

In 2018, Seattle Times columnist Gene Balk, aka The FYI Guy, wrote an article using data collected from the Consumer Price Index showing Seattle’s cost of living outpaced every major municipal region in the country. This was significant because four years earlier, Seattle had begun to raise its minimum wage by 60%. This data was captured before most other cities and states adopted Seattle’s wage experiment, revealing the wage hike’s implications in real time. In 2013, then-Seattle City Council member Kshama Sawant started pitching a citywide $15 minimum wage, promising the wage hike would lift 100,000 workers out of poverty. Last year, Sawant claimed on “The Chris Hedges Report” that $25 an hour is needed. 

As the saying goes, “When your only tool is a hammer, every problem looks like a nail.”

Since Initiative 1433 was enacted in 2016, the state has seen eight consecutive annual minimum wage hikes and is certainly getting a ninth in January. Even though Washington’s minimum wage has gone above $15 per hour to the current $16.28, the state’s Department of Labor and Industries is mandated to increase the wage each year based on inflation. As a result of this vicious cycle, we will never be able to combat the cost of living with minimum wage. 

As minimum wage goes up, so does the cost of living via higher prices. The increased cost of living pushes more people toward homelessness. The government then increases spending on services and shelter. This government spending creates inflation. Labor and Industries has to work this inflation into a function that increases the state’s minimum wage. This creates a mobius loop of out-of-control cost-of-living increases that exacerbate homelessness, crime and inflation. In other words, the government is telling the private sector to fix the problems the government caused. By tethering the minimum wage increases to inflation, the solution actually contributes to the problem. 

I propose we sever the state’s minimum wage from the rate of inflation and put these increases back into the hands of the people and their elected officials. Let’s give our small businesses time to heal. Let’s stop pricing our least-skilled citizens out of the job market. We can restore competition for businesses and give tax dollars back to the cities and counties and drive down the cost of living. 

King County’s increased minimum wage decision has demonstrated how individual municipalities and counties can make their own decisions. Other counties may find an advantage in attracting businesses and tax dollars by keeping their minimum wage at a more competitive level. Washington’s one-size-fits-all policy essentially removes the ability of cities and counties to utilize this advantage. When it comes to bringing back affordability to our state, we have many tools at our disposal, not just a hammer.