Business Climate

WPC's Center for Small Business focuses on improving Washington's small business climate by working closely with business owners and policymakers. The Center provides accurate information and analysis on the state's regulatory climate, tax structure, health insurance systems, and more.

What's New

More on minimum wage

October 24, 2008 in Blog

A Seattle Times article today addresses the gubernatorial candidates' stances on minimum wage -- particularly the merits of a "stair-step training wage." One candidate favors the idea, another one opposes any cuts to the minimum wage no matter the experience level of the employee. (WPC Vice President for Research Paul Guppy blogged on the minimum wage yesterday)

At a recent gubernatorial debate, a small business owner asked the candidates about the stair-step training wage. She spoke with the Times reporter after the debate.

In a phone interview this week, Mercy said her theaters employ 100
people, mostly teenagers earning minimum wage. She said she was
interested in a training wage for the first 30 days or so for new teen
workers, who often arrive for their first job with few skills.

"These kids come here and they don't know diddly squat," Mercy said,
yet they get paid the same as other teens who have already been trained.

But still, some proponents of the minimum wage (or "living wage") continue to assert that the minimum wage should not be tinkered with -- unless it's raising the wage. In other words, raising the cost to the employer. So, what happens when the cost to the employer becomes more than the benefit of the good or service being provided by the employee?

Mercy said the profit margins of theaters are already thin, and because
of the increases in the minimum wage, she is now considering whether
she can raise ticket or concession prices without losing customers.
Mercy said she may have to consider layoffs or hiring fewer teens in
the next year.

Either we all pay more in the end or the employee now has no income.

Defining Voluntary Quits

October 23, 2008 in Blog

The State Supreme Court today issued a ruling on Unemployment Insurance benefits and helped to further define the notion of "voluntary quits."

A little background: The state's Employment Security Department is in charge of the unemployment insurance program -- a state-run insurance program designed to aid workers who lose their jobs through no fault of their own -- a social safety net if you will. It is designed to help laid off workers to transition into another job without losing all forms of remuneration during that difficult time. But there are parameters one must meet in order to benefit from the program -- namely, you must have been laid off or let go through no fault of your own. If you are caught stealing office supplies and your employer terminates your services, you are out of luck. Don't steal. If your employer has hit hard times and must trim expenses and therefore your job, well, you just got the short end of the stick, so here's a little something to help hold you over until you find a new job.

But many times an employer takes the proactive step of asking for volunteers. This is always in exchange for some sort of recompense. In this case, Verizon was experiencing tough times and sent a memo to employees asking for volunteers to be let go in exchange for severance payments, one year of health benefits, immediate stock option vesting and even pension enhancements for some employees.

Hundreds of the employees stepped forward voluntarily and accepted those terms and were let go. However, some employees, even though they accepted the terms of the termination, also filed for unemployment benefits. But, for every action there is an equal and opposite reaction. Verizon would have been hit twice, because any business that lays workers off takes a hit in their unemployment premiums (suffice to say it can get very complicated). So they asked the state to rescind the UI benefits.

Long story short, every court sided with the employees until the State Supreme Court, which made the correct decision. When a person steps forward voluntarily to accept a termination with benefits, they should not also be allowed taxpayer-funded unemployment benefits. Verizon gave their employees an incentive to retire or switch jobs. The employees did not have to accept. It was voluntary.

Legislators to Discuss Health Care Reform in Tri-Cities

in Press releases

Tri-Cities – Washington Policy Center, in conjunction with Tri-Cities Area Chamber of Commerce, TRIDEC, Tri-Cities Homebuilders Association, and the Tri-Cities Area Journal of Business, will be holding a regional Small Business Forum in Richland on Thursday, October 30.  A bipartisan panel of legislators will discuss health care reform ideas for the upcoming 2009 legislative session.  In addition, business owners and employees will join policymakers and analysts to discuss several other important issues impacting small businesses.

Spokane Small Business Forum Next Week

in Press releases

Spokane – Washington Policy Center, in conjunction with Greater Spokane, Inc., and the Spokane Journal of Business, will be holding a regional Small Business Forum in Spokane on Wednesday, October 29.  Business owners and employees will join policymakers and analysts to discuss several important issues impacting small businesses.

What:  2008 Regional Small Business Forum and breakfast

When:  Wednesday, October 29, 7:30-9am

Where:  Spokane Red Lion Hotel at the Park (303 W North River Dr)

An Evening with Economist Stephen Moore

October 22, 2008 in Events
Wednesday, October 22nd, 2008
6:00 pm - 8:00 pm
Mercer Island Country Club
Medina, WA

Washington Policy Center is co-sponsored the event with Women of Washington.
Stephen Moore, a member of the The Wall Street Journal editorial board and senior economics writer, spoke about the current economic situation and what the future may hold.

Unemployment Insurance to Striking Workers?

October 17, 2008 in Blog

It's been a busy month at Washington Policy Center and sometimes news stories that are worth pointing out slip through the cracks -- as this story did:

From KOMO on September 21st:

SEATTLE (AP) - Union leaders say striking Boeing workers should apply
for unemployment compensation but concede they have little chance of
collecting....The Machinists union strike has shut down Boeing's aircraft assembly plants since Sept. 6.

As the story says, union leaders concede there is little chance of collecting the benefits. Under current state law, striking or locked out workers are not eligible for UI benefits.

But make no mistake that efforts have been underway for awhile to make it so that workers involved in a labor dispute could, in fact, collect taxpayer-funded unemployment insurance benefits.

SB 6327, introduced earlier this year, would have taken steps to make this a reality. It died in committee, as did its companion bill in the House, but expect it to rise from the ashes in 2009, particularly if the Boeing SPEEA dispute is still going.

Business and Occupation Tax Reform: Recommendations

October 10, 2008 in Blog

A new report out by Washington Policy Center continues the examination of Washington's Business and Occupation tax system. The third of four parts, Part III - B&O Tax Recommendations, highlights New Mexico and Texas' attempts at reforming their gross receipts tax levied upon businesses.

Part III also analyzes several pieces of legislation from the past few years that attempt to alleviate some of the taxation pressure on small or medium-sized businesses. Some of the ideas include a sliding scale B&O threshold for new businesses, raising the B&O tax threshold for all businesses, and more.

This latest report joins Part I - "Characteristics of a Responsible Business Taxation System," and Part II - "B&O Tax: The Problem of the Pyramid," in raising the question of whether the B&O gross receipts tax is really the best tax system for the struggling business community.

Part IV, updating the 2002 Tax Commission's pyramiding tables, will be published in mid-October.

Business & Occupation Tax Reform, Part IV

October 2, 2008 in Publications

In 2001, the state legislature created the Washington State Tax Structure Committee, also known as the Gates Commission, headed by William H. Gates, Sr. The mandate given to the Commission by the state legislature was to conduct “a systematic analysis of Washington’s existing tax structure and provide recommendations for alternatives to improve the tax system.”

Business & Occupation Tax Reform, Part III

October 2, 2008 in Publications

Taxes play an integral part in commerce—businesses and consumers take into account the cost of taxation along with the other costs of any business or commercial transaction when determining their action. But taxes, and the way they are collected, also play a huge role when business owners decide where and how to set up a business.

Minimum wage to increase almost 6% in 2009

October 1, 2008 in Blog

The nation's highest minimum wage will get a little higher in 2009. The increase, from $8.07 to $8.55 represents an almost 6% raise for those workers receiving minimum wage. That's a sizeable jump compared to the 2008 increase which was a little over 1% at only $0.14.

If you have a problem with this increase, don't blame the Department of Labor and Industries. The voter-passed initiative 688, approved in 1998, links the state's minimum wage to the CPI-W. Although various proposals have been around that would decouple this CPI/minimum wage formula if the state's unemployment rate got too high during economic recessions, the proposal has fallen on deaf ears in Olympia.

Some people -- particularly during election season -- are apt to fly off the handle over any proposal that would reduce the minimum wage, or at least slow the increase in the minimum wage because they believe that there are thousands upon thousands of workers that are trying to provide for their families on $8.07 per hour.  That is simply not true.

While I do not doubt that these economic times are tough on everyone, and that I'm sure there are at least a few household providers only making minimum wage (without tips), the data from the Bureau of Labor Statistics proves otherwise. Take a look for yourself.

I'll sum it up by saying if you are young, live at home and never married, the chances of you making minimum wage is much higher than not. And, let's not forget that other data out there shows that 63% of minimum wage workers are employed at higher-than-minimum wage jobs 1 year later. Again, the chances of someone who is older, married and not living at home while making minimum wage is minute. And smaller still is the chance that the same full-time worker would be earning minimum wage after 1 year of gainful employment.