More details on Seattle’s proposed $15 minimum wage

The Puget Sound Business Journal has a good overview. As the PSBJ reports, it’s complicated.

Under the mayor’s proposal, which the City Council has to approve, businesses with fewer than 500 employees would have up to seven years to reach $15 an hour. But counting what is called “temporary compensation responsibility,” these small businesses would have to meet the $15-an-hour wage in five years. That could be achieved by counting tips and other benefits, such as health insurance, toward the $15 level.

Businesses with 500 or more workers, either locally or nationally, would have to reach $15 an hour in three years. The wages of employees who get health benefits and tips would have to reach $15 an hour in four years.

There’s more in the story. But there’s also this: the measure goes to the city council, which will doubtless consider amendments. And as the PSBJ reports in a separate story, Councilmember Kshama Sawant was a no vote and is urging her supporters in 15 Now to step up signature gathering for an initiative in November.

Sawant said the Thursday announcement by Murray “is a call to action.” She asked people to March with her Thursday afternoon in the May Day rally and to “join the movement of 15 Now to gather signatures to let the City Council know we are watching.”

Regardless of how you feel about the $15, the compromise represents a significant political achievement. Publicola makes the point.

The agreement brings together both business and labor representatives, including small-business leaders like restaurant owner and band manager Dave Meinert, big business like Nucor Steel, non-profits like Solid Ground, and most importantly, hard left unions like UFCW Local 21, the lefty grocery workers’ union and SEIU Local 775, the home health-care workers’ union that ran the Sea-Tac $15 minimum wage campaign.

Chamber of Commerce leader Maud Daudon abstained, while Retail Lockbox owner Craig Dawson and city council member Kshama Sawant voted “no.”

The Publicola story also notes some complications ahead.

The business-backed group OneSeattle, which objected to some aspects of the compromise proposal (for example, they wanted all businesses to be allowed to count “total compensation,” including benefits like health care, bonuses, and commission, against the $15 minimum, and supported a sub-minimum “training wage”), has said it would consider an initiative if the mayor’s committee didn’t come up with a plan acceptable to the group. After Murray’s announcement, the group issued a statement saying that they would be reviewing the proposal and deciding what to do next.

And 15Now, backed by City Council member Kshama Sawant, is gathering signatures for its own initiative, which includes only a three-year phase-in for small businesses and no “total compensation” or exemptions. In a press conference after Murray’s announcement, Sawant—a ‘no’ vote on the committee—said she would continue supporting the signature-collection effort. “This proposal does not live up to the wishes of Seattle workers. That is why I vote ‘No’ on this recommendation,” Sawant said.

There’ll be more later. For now, let’s close with some thoughts from two economists on the best way to fight poverty.

…as evidence proves time and again, policies that either raise the cost of hiring or reduce the incentive for work are counterproductive to fostering employment. Going forward, our economic policies must focus on avoiding and correcting such counterproductive policies and reengaging the millions of Americans who have left the workforce.