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The state's Department of Labor and Industries announced yesterday that there will be no minimum wage increase for 2010. The minimum wage for workers in this state will remain at $8.55 per hour. This is the first time since Initiative 688, the initiative that coupled the minimum wage to the Consumer Price Index passed in 1998, that the wage has remained static. For several years, Washington had the highest minimum wage in the nation, this move may knock us down a spot or two.
The reason behind the move isn't a policy decision or politics, it's economic. The Consumer Price Index actually fell 1.9 percent during the 12-month period that ended in August. The Department said that the previous wage hike, $0.48 for 2009 wages, was because of a 5.9 percent increase in the CPI during the 12-month period that ended in August 2008. That! is a very substantial change, due to many factors, but the price of oil probably being the largest ($147 a barrel in the summer of 2008 vs. $70 this summer).
Colorado experienced a similar fate when voters linked their state's minimum wage to the cost of living (CPI) but with the stipulation that the wage could actually decrease if the cost of living did as well. No one really thought it would, so Colorado policymakers where caught a little off-guard (even if their wage rate will only decrease $0.04 per hour). Washington's Initiative makes no provision for a reduction in rates, so the 2009 wage will remain unchanged for 2010, as opposed to decreasing, even though the CPI dropped.
Undoubtedly, there will be outcry from organizations that advocate for the working poor -- that no increase in the worki! ng poor's hourly wages will keep more workers struggling t! o pay their bills. But I would ask them to reevaluate their stance that the CPI should maintain control over how much a worker makes. What incentive is there for someone to do more or less in their job if their wage is determined by economic conditions, and not merit?
If someone supported Initiative 688 in 1998 because they thought it was only fair to couple cost-of-living increases to determine the minimum wage, then that same person cannot turn around 11 years later and say it is not fair when that same economic indicator does not produce statistics they don't like.