What Seattle’s $15 Minimum Wage Means for Residents

Business, Money, News

The Seattle City Council made history on Monday, with a unanimous 9-0 vote raising Seattle’s minimum wage to $15-per-hour, now the highest in the nation. While thousands of minimum wage employees are thrilled, other low-wage workers and small-business owners are worried about what the wage hike means for their jobs and businesses. To answer some of the uncertainty, we look at what the $15-per-hour minimum wage ordinance really means, who is directly affected, possible drawbacks, who may be exempt and how the increase will be enforced.

What the $15-per-hour wage ordinance means

The impact of Monday’s historic vote will not be immediate since the legislation phases in over three to seven years, depending upon business size, until the much-touted $15 minimum is reached. Beginning when the law takes effect April 1, 2015, wages will gradually increase until every minimum wage job pays $15 per hour.

To fully understand that rate of increase, it is important to note that wages will not rise at equal rates. Businesses will be divided into two categories: small businesses with fewer than 500 employees nationwide and big businesses with more than 500 employees nationwide.

Big businesses will be required to increase their hourly wage until it reaches $15 by 2017. Given that the current minimum wage in Seattle is $9.32, many minimum wage workers should expect an approximate $6 increase over three years. Large businesses that provide employees with good health benefits, such as Starbucks, will have four years to reach the $15 minimum.

Small businesses and non-profits will have a longer period of time — until 2021 — in which to gradually lift the wage. This means that the wages of a Walgreens employee, for example, will increase faster than the wages of an employee working at a small, local drugstore.

Who is affected?

Minimum wage employees, such as fast food workers, waiters and waitresses, home healthcare workers and others, hope the wage hike will improve their quality of life. Many believe that market competition will force other companies to raise wages to keep employees. This new Seattle ordinance is expected to raise the minimum wage throughout Washington State by 2021. However, higher expenses may force some businesses to close, causing a huge backlash and forcing former minimum wage workers out of the workforce altogether.

Small business owners fear large businesses will implement higher wages more quickly and take away employees and customers. The International Franchise Association, which represents owners of franchises, plans to sue the city of Seattle on grounds that the ordinance is discriminatory and unfair. A group of Seattle restaurant owners is especially disgruntled with the law, which they say will force them to raise prices and cut employee hours.


While these are some of the more obvious potential drawbacks to the increase, more subtle disadvantages may also come into play. Some small businesses might leave Seattle for relocation in surrounding communities. Higher wages could substantially inflate consumer prices in certain industries. Another drawback is that higher wages may attract more highly skilled workers, displacing less qualified ones. Skilled workers living in the suburbs of Seattle may come into the city for higher wages, and Seattle’s public transit system is currently unequipped to handle an influx of commuters.

Exempt Wages

While it may seem like this increase will help all minimum wage workers, some workers and positions will be exempt from the increase and not directly benefit. As part of compromises struck to pass the law, training wages, youth wages and special certificate wages may be lower than the mandated $15-per-hour minimum. The city allows a short-term subminimum wage to be paid to trainees at the beginning of their employment. In terms of youth workers, Washington State currently allows workers under the age of 16 to receive less than minimum wage. The bill proposes that Seattle appoint a city director to determine wages for youth workers in the city.

Perhaps the most confusing exempt wage is the special certificate. Washington State has a little-known program in which businesses can apply for a special certificate allowing them to pay a subminimum wage. This certificate has only been issued five times in the last five years. The state certificates can only be used for “student workers,” “student learners,” “adult learners” and “handicapped workers.” Because the categories are currently vaguely defined, some fear that the number of special certificate holders could rise drastically as businesses search for cost-saving loopholes.


As with any law, this ordinance is only as powerful as measures taken to enforce it. Seattle City Councilmember Nick Licata believes the best way to ensure its success is to create an Office of Labor Standards Enforcement, modeled after a similar office in San Francisco. An employee paid below the legal standard could submit a complaint to the office, which would in turn send an inspector to audit the workplace. The office would implement the new wage law with the help of paid inspectors and auditors, as well as coordinate outreach and education efforts. Licata believes that by educating workers about their rights, this city office could help prevent wage theft and misconduct, in addition to punishing violators.

What makes the minimum wage hike so widely debated is that, while studies can be conducted and guesses made, no one can precisely predict every long-term effect. Will it reduce poverty, as many liberal advocates proclaim? Will it mean less work and small business closures, as many conservatives fear? Right now, it is impossible to know the exact outcome of this decision, but Seattle is going to be the first United States city to find out.