The Department of Labor and Industries is set to announce an increase to our state’s minimum wage sometime today, which is already the highest in the nation at $8.67 per hour. Washington also has one of the highest unemployment rates in the nation.
The increase in the minimum wage is bad news for the unemployed, young and inexperienced workers in Washington. Today the unemployment rate for our state remains at more than 9.3%, well above the national average. Increases in the costs to operate a business will limit the number of jobs available in the already tight job market, and will likely lead to even more workers forced into unemployment.
It is also bad news for small business owners struggling to rebound from the down economy.
We have written about how raising the minimum wage hurts workers: L&I Hurts Small Businesses, Young Workers, with Decision to Raise Minimum Wage
The Washington Policy Center has several recommendations that would improve the working environment and business climate for our state. Leaders in Olympia could help workers by:
- Decouple automatic minimum wage increases from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to reflect the true cost of living across the state,
- Delay automatic increases in years when state unemployment is higher than the national average,
- Allow restaurants to count tip income as part of normal minimum wage earnings, so employment costs in one industry are not artificially inflated, and
- Refrain from imposing mandatory “living wage” controls, whether or not directed at a particular industry.
To find out more see our Policy Guide (Chapter 8, page 5 – “Minimum Wage and Living Wage”).
As small business owners and workers continue to feel pinched, policymakers should consider alternative approaches to stimulating job growth and wage increases.
UPDATE: L&I just published the new minimum wage rate, increasing the rate from $8.67 to $9.04. This represents and increase of more than 4%. Their press release can be viewed here: Washington's minimum wage to increase to $9.04 next year
Correction: This post was updated to reference the correct measure of the Consumer Price Index.
