On the heels of voters approving Initiative 1433, increasing the state minimum wage to $13.50 by 2020 and mandating paid sick leave for every worker, employers around the state are assessing what the changes mean to their business.  For many, the news is not good.

The Yakima Herald Republic this weekend published an editorial by a child -are center owner who says he doubts his business will survive past 2017.  Larry Fournier says that with 23 employees, his annual payroll costs will increase enough to eliminate any profit, and may actually put his business in the red.

“We have no way to cover the subsequent years wage level increases starting in 2018, and probably face laying off all of our workers and closing up for good. There will be no way to pay the monthly mortgages on our two buildings, and we would probably lose them to foreclosure. We are not the only child care center in the state with this problem.”

He certainly is not. 

Prior to passage of I-1433 last month, the owner of Rainbow Connection Daycare in Spokane said it was already struggling to keep its tuition rates low while still covering rising expenses.  A $100 per month rate increase last year covered current expenses, but that was before I-1433 goes into effect.

“If minimum wage goes up [to $13.50 by 2020], I don’t think I could do it.  I’d easily have to raise expenses by $500 for the infants, which are currently $1,000, just to break even.  There’s no way my families could pay that.”

The non-profit Advent Lutheran Child Center in Spokane has already figured out how it will address the problem of the increasing labor costs due to I-1433.  The center has informed parents tuition rates will increase by $140 per month per child.  The center says the hike is the direct result of the higher minimum wage they must now pay.

Demonstrating perfectly the law of unintended consequences, one parent upset by the hike in day-care costs admitted voting in favor of I-1433, never considering the fact it would affect the cost of child care. 

Another child-care provider interviewed by KXLY in Spokane agreed an increase in tuition rates is inevitable.

A double-digit increase in monthly child-care rates is not a great option for working parents.  But the alternative is no better.  Child-care providers that don’t increase rates face the grim future described by Larry Fournier.  Since 2011, Washington state has already lost more than 1,500 child care providers, leaving parents with fewer options for finding care for their children and longer wait-list times (sometimes eight to nine months) for those who do.