The Seattle City Council unanimously passed an ordinance Monday gradually raising the minimum wage to $15, the highest in the country, the Associated Press reported. But a neighboring suburb with the wage hike already implemented is seeing businesses shutter and companies struggling to offset the increase in costs as they feel the effects of a $15 minimum wage.
The measure, which was pushed by socialist City Council member Kshama Sawant, will take effect April 1, 2015. The new wage hike will be phased-in, with small businesses given more time to adjust to the increase. Companies with more than 500 employees nationwide will be expected to abide by the $15 an hour minimum wage in three years, while those providing health insurance — businesses with more than 50 employees, according to the new healthcare law — have four years to adjust. Small businesses will have seven years to phase in the wage hike.
A $15 minimum wage was a key part of now-Mayor Ed Murray’s campaign agenda and was praised by council members.
“We did it. Workers did it,” Sawant said, according to the AP. “We need to continue to build an even more powerful movement.”
Though the City Council and some local businesses celebrated the increase, a group of immigrant restaurant owners were vocal in opposing it, as they feared the increased costs would force them to lay off workers, raise prices, or shutter.
“The reality is that the larger companies are going to ratchet up their wages and we’re going to have to play at that level,” Nick Musser, general manager of downtown Seattle’s Icon Grill, told the AP.
And a suburb of Seattle is grappling with the consequences of such an increase after raising its hourly wage to $15 an hour for service industry employees, which went into effect in January.
SeaTac, a small city located in between Seattle and Tacoma, has seen businesses close in the wake of the wage hike, as small businesses were unable to keep up with the increase in costs. According to the Seattle Times, a restaurant located at a Clarion Hotel closed its doors, while parking lots are increasing their fees in an attempt to offset the costs of the $15 minimum wage.
And Washington’s Northwest Asian Weekly reported that a woman working in SeaTac lost her retirement plan, health insurance, and paid holiday and vacation days as a result of the minimum wage increase. Others told the newspaper they now to have to pay for parking and food — amenities their employers used to provide.
“It sounds good, but it’s not good,” one woman said.
Many cities and states across the country are boosting their minimum wages. San Francisco currently has the highest hourly rate at $10.74 an hour, and Maryland, Connecticut and California passed state laws raising their minimum wages to $10 an hour.
President Barack Obama has called on Congress to raise the federal minimum wage to $10.10 an hour, and Democrats on Capitol Hill have worked to pass legislation doing so. Republicans, though, fear that a wage hike would hurt small businesses, cause layoffs and increase prices for consumers.
Neither the House nor the Senate are likely to tackle raising the minimum wage this year.
