by Mike Andrew -
SGN Staff Writer
Seattle's minimum wage ordinance - which will ultimately raise wages for the city's lowest-paid workers to $15 per hour - kicks in April 1.
The law raises wages in stages. Businesses with 500 or more employees will be required to pay $11 per hour starting April 1, and get to the $15 per hour goal by 2017, or 2018 if the company pays employee medical benefits. Smaller businesses have until 2021 to meet the goal.
The law survived an initial legal challenge by the International Franchise Association (IFA), but is still being contested in federal court.
Meanwhile, the city's largest employer, the University of Washington, says it is exempt from the law. Other public institutions - community colleges, Seattle public schools, King County, and the Port of Seattle, for example - may be as well.
The ordinance was passed last year, and reflects a compromise between business and labor interests hammered out by a task force appointed by Seattle Mayor Ed Murray.
Law survives legal challenge
One of its provisions stating that franchise operations like McDonald's, Subway, and Burger King are classified as 'big businesses' that must meet the $15 per hour wage goal by 2017, was immediately challenged by the IFA.
Franchise owners are actually small businessmen, the IFA's lawsuit claimed, because each franchisee owns only one, or at most a few locations, and employs far fewer than 500 workers. The City's attorneys replied that franchise owners get the benefit of corporate advertising campaigns, pre-set business and marketing plans, and discounts on supplies and other merchandise, and should be treated as parts of a large corporation.
U.S. District Judge Richard Jones turned down IFA's request to exempt franchises from the April 1 rollout of the new ordinance. In a March 18 ruling, Jones said the business organization had failed to prove that the law would harm them.
'Although the court is sympathetic to the concerns of franchisees, the individual plaintiffs' declarations in this matter consist only of speculation,' he wrote in a 43-page decision. 'There is no actual evidence of the alleged negative impacts that plaintiffs fear will occur as a result of the faster phase-in schedule.'
Even if the IFA did show harm, Jones continued, that 'does not outweigh the concrete harm that will be suffered by employees who are entitled to a schedule 1 increase in their wages under the ordinance.'
The IFA and the City will be back in court to argue the issues later this year.
No pay raise for UW workers
The UW, however, is not planning to increase wages for its workers on April 1, and says it may never do so. At issue is whether the City of Seattle has jurisdiction to set wages for other public entities.
While the UW has not gone to court over the Seattle ordinance, the Port of Seattle is suing the City of SeaTac over its $15 per hour minimum wage law, claiming that SeaTac has no authority to set wages for airport workers. SeaTac Airport is owned by the Port of Seattle.
That case is now pending before the Washington State Supreme Court. The high court heard oral arguments in June 2014, but no date has been set for a decision. In the meantime, UW's obligations under the Seattle ordinance are not clear, the school claims.
'I don't want to say we're in limbo, but we're in limbo,' UW spokesman Norm Arkans told the Seattle Times. 'We're waiting for some direction from Olympia. ... At some point, someone's going to say: 'We don't think you're subject.' Or: 'We think you're subject.'
The UW employs some 30,000 workers including its medical facilities and campuses in Tacoma and Bothell, but only about 70 workers now make less than $11 per hour. If the state legislature approves the UW's already negotiated contracts with its unions, the minimum wage for full-time UW employees will rise to $12 per hour in July.
If student workers are included, as well as salary adjustments to make supervisors' pay rise in proportion to their minimum-wage workers' pay, the UW estimates some 16,600 workers would be affected, at a cost of some $22.5 million.
Bright lights, big city, low pay
Like many big cities, Seattle has seen a huge jump in incomes at the high end but stagnation for most working class residents.
According to the labor group Working Washington, one in four Seattle workers earn less than $15 per hour. While the top 5% of earners have a yearly income of more than $423,000, the bottom 20% average only $13,000.
While some Seattle residents struggle to get by on $13,000 per year, the Economic Policy Institute estimates that a single-parent, single-child household needs $52,611 per year to live comfortably in the city. A Seattle household with two parents and two children need an average annual income of $70,025 to live securely, their study showed.
Seattle's cost of living is substantially higher than the national average. Utility costs are somewhat lower in Seattle, but housing prices are 57% above the national average. In addition, transportation costs are 18% higher, healthcare is 17% higher, and groceries are 11% higher than the national average.
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