No recommendation from Seattle mayor on how to get to $15 minimum wage. Yet.

Yesterday’s press conference (video) had Seattle Mayor Ed Murray explaining why he was not announcing his proposal for a $15 minimum wage. Here’s how Publicola characterized it.

At a press briefing this afternoon—the official press release read, “Mayor Murray to announce his proposal for raising the minimum wage in Seattle”—Mayor Ed Murray did not announce his proposal for raising the minimum wage in Seattle.

He thinks his Income Inequality Advisory Committee, the group he named in December to come up with a plan, is close to meeting that goal. Though there may be a slim majority for a recommendation, he’s hoping for a supermajority – 60 percent – to build civic momentum and possibly avoid several competing ballot issues.

Murray said Thursday there still might be a ballot initiative, but he hoped that with a strong proposal from his committee, “I believe we can avoid two, three or more versions of what to do on the ballot.”

If labor had to spend millions on an initiative and business had to spend that much when they should be creating jobs, the atmosphere would be poisoned, Murray said, calling that result a “version of class warfare.”

Councilmember Kshama Sawant had an answer to that, one that suggests the ballot game is on.

“Our goal now is to stop focusing on the committee. The committee is done. It is over,” Sawant said.  In response to Murray’s fear of a class war, she said: “We live in a capitalist system. It is class warfare.”

Murray was specific about the principles the committee has agreed to. Here’s the Puget Sound Business Journal’s summary.

  • The minimum wage should be raised to $15 an hour.
  • It would be difficult for small businesses and non-profits to start paying $15 now. “Given that, getting to $15 should be phased in,” Murray said.
  • Once $15 an hour is attained, future increases to the minimum wage should be based on the consumer price index.
  • No employer would be exempt from paying $15 an hour.
  • Strong enforcement by the city of new wage rules should be part of the program.
  • “There would be some benefits that would be phased out as the minimum wage is phased in,” Murray said.

What’s in the $15, a clearly arbitrary number in the first place, is a matter of dispute. Business groups want tip income to count; labor disagrees.

Washington is one of seven states that does not allow a lower minimum wage for tipped workers. Waiters, hairdressers, valets and other service workers must be paid a base hourly rate of at least $9.32, regardless of how much they make in tips. By comparison, the federal sub-minimum wage for tipped workers is $2.13 an hour, versus $7.25 for non-tipped employees.

David Rolf, a vice president of the Service Employees International Union and co-chair of the mayor’s task force, said labor activists worry that a carve-out for tipped workers in Seattle would set a dangerous precedent for the rest of the state.

“Organized labor is strongly concerned that if Seattle acts to redefine wages, it will open the door to lowering the state minimum wage,” Rolf said.

And, as Don Brunell writes, there are other considerations.

as any employer knows, there is much more to employee compensation than wages. According to a March, 2014 report from the U.S. Bureau of Labor Statistics, private-sector employers pay an additional 30 percent on top of wages for employee benefits such as Social Security, Medicare, workers’ compensation insurance, unemployment insurance, paid leave, health care, retirement, etc.

Seattle Times editorial writer Jonathan Martin takes a look at the impact of a $15 minimum on nonprofits. The phase-in won’t be much help.

Most nonprofits lean heavily on federal and state funds; 97 percent of Hobson’s budget is government contracts. What’s the likelihood that Congress, or the state Legislature, is going to bump up those contracts to account for a minimum wage in Seattle that would be higher than every other city in the country?

The other main income source for nonprofits is from donations. Smart nonprofits already tap this source as hard as they can. Are they expected to find a magical new philanthropic fountain to pay $15?

As Martin discovered, a prominent backer of the $15 wage is not immune to magical thinking.

A $15 wage, [proponent Nick] Hanauer suggested, will eventually reduce demand – for addiction treatment, for mental-health counseling, for domestic-violence intervention, for homeless outreach. “Eventually social services will recalibrate to a smaller human services problem,” he said.

That is, at best, utopian thinking. At worst, it’s a fantastical theory that will put a vise on already struggling human services.

Sawant wants a $15 wage, no exemptions, no tip credit, no consideration of other compensation, and only a 3-year phase-in.

Murray says he wants more time “to get it right.” When you’re mandating a 60 percent jump in the minimum wage, I doubt there’s ever going to be that much time.

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