Seattle Employers Worry Over Effects of $15 Minimum Wage

Businesses already factoring higher wage costs into their planning, but answers aren’t easy.

June 26, 2014

SEATTLE – All eyes are on Seattle as it moves toward a $15 minimum wage, the highest of any major city nationwide.

On June 2, the City Council unanimously passed an ordinance requiring employers to pay employees at least $15 an hour in the next three to seven years depending on the size and benefits offered by a company, a move that represents a 61% increase over the state’s current minimum of $9.32.

According to an article in the Seattle Times, Mayor Ed Murray, who subsequently signed it into law, said it was a bold — but not dangerous — experiment. Labor activists hailed it as a landmark victory for low-wage workers, while franchisees immediately planned to challenge the new law.

Whether Seattle’s $15-an-hour mandate proves successful largely depends on how employers react.

While it’s early, many businesses are already are factoring in the higher wage costs as they plan for the future. Will they lay off workers or raise prices? Cut benefits and workers’ hours? Or maybe they’re confident that workers with more money to spend on local goods and services will boost their bottom lines?

In a recent report, the Seattle Times reached out to four local business owners and found all of that in the mix, though layoffs generally are seen as a last resort, and price hikes carry some risk in a competitive landscape. Here’s how these four are preparing for a $15 minimum wage. Ron Oh, who owns a Holiday Inn Express, spoke to the Seattle City Council on behalf of small, local franchise owners, who are being treated  as large, national employers and puts them on a fast track toward the $15-an-hour hike . He has joined the lawsuit filed in U.S. District Court in Seattle by the International Franchise Association and other franchisees to try to strike down the ordinance, calling it discriminatory and unconstitutional. Oh plans to raise room rates and reduce workers’ hours to pay for the wage increase, among other strategies.

For more stories from Seattle employers, read the Seattle Times article here.

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