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Seattle finalizes plan for $15 minimum wage — eventually

Sawant addresses a rally before Monday's vote (Image: CHS)

Sawant addresses a rally before Monday’s vote (Image: CHS)

A First Hill McDonald's worker who walked out for a one-day strike against fast food chains earlier this spring (Image: CHS)

A First Hill McDonald’s worker who walked out for a one-day strike against fast food chains earlier this spring (Image: CHS)

The Seattle City Council voted Monday afternoon to require a minimum wage in the city that will — eventually — be the highest in the nation.

“Today’s first victory for fifteen will inspire people all over the nation,” said Council member Kshama Sawant, largely credited with being the the architect of Seattle’s move to address wage inequality.

“Today, workers in Seattle have made history.”

Mayor Ed Murray will sign the legislation Tuesday afternoon in a ceremony slated for 1:15 PM in Cal Anderson Park.

Approval of Council Bill 118098 and Resolution 31524 sets the wheels in motion to move Seattle’s minimum wage to $15 per hour for every worker in the city by 2021. Murray’s May Day compromise plan created tiers of phase-in schedules intended to help protect Seattle businesses with fewer than 500 employees and nonprofits from unintended consequences of a higher minimum wage. Last week, the City Council’s minimum wage committee added a roster of amendments and additions to the plan including a sub-minimum training wage and specifics about how impacts of the plan will be monitored and analyzed.

During Monday’s full council session, Council member Nick Licata introduced an amendment to nix the training wage element of the plan. Sawant argued in favor of Licata’s amendment and was joined by three members in voting for the change. Tom Rasmussen, Sally Clark, Jean Godden, Bruce Harrell, and President of the Council Tim Burgess voted to retain the training wage component and the amendment was defeated.

A Sawant amendment to roll back the start date for the plan to January 1st was also defeated with no votes from Rasmussen, Bagshaw, Clark, Godden, and Burgess. Sawant also found no support from her fellow delegates for an amendment to eliminate the plan’s phase-in schedule. Her proposal to eliminate tip credit language from the legislation also found no additional support from the other members of the council.

The approval marks the end of a City Council process that began in March with a meeting at First Hill’s Town Hall to begin public testimony on raising the wage.

There are still potential barriers. A franchise group was the among the first to say it plans to sue the city over the new wage plan.

Organizers have not yet said if the approval will end fall ballot plans for a charter amendment to move the city to $15 per hour on a more aggressive schedule.

It seems clear that for Sawant’s Socialist Alternative party, the approved legislation is victory enough.

“$15 in Seattle is just the beginning,” Sawant said. “We have an entire world to win. Solidarity.”

(Image: City of Seattle)

(Image: City of Seattle)

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davmar
davmar
6 years ago

This is going to be an interesting experiment.

Zac
Zac
6 years ago

I hope it doesn’t…but I feel like this is going to end badly.

15min
15min
6 years ago

Just glad I no longer have to do math at the dinner table. Pay people living wages and eliminate tipping. Good job Seattle.

zim
zim
6 years ago
Reply to  15min

As someone who relies on tips for a living, I would just like to point out that a “tip credit” is part of the deal which means tipped employees will be making the same minimum wage as the rest of Washington State ($9.32/hour not $15/hr)

15min
15min
6 years ago
Reply to  zim

Your employer is certainly going to raise prices after this, you should ask him/her for a raise to compensate your tips being included in the bill.

Bobb
Bobb
6 years ago
Reply to  zim

You might want to email Sawant and let her know that she is officially damaging your prospects of a paycheck via tips in her crazy uneducated economics battle here… The general public is not going to take a ‘Tip Credit’ into account when paying for increased costs of goods sold.

Max
Max
6 years ago
Reply to  Bobb

Why are you singling out blame on Sawant? She didn’t want there to be a tip credit. She’s not the entire Seattle City Council. There are kinda some other people. It’s a long, slow step in the right direction. Plus I don’t get the math here. If restaurants do raise prices (and claim to have to do so because of an increase in wages (itself a debatable connection since why can’t it also be seen as a cut in the bosses pay?)), then it would mean a bigger bill and bigger tip as a percent of that? Would people really say, oh you are earning 9.32 an hour so I’m going to tip you less. That would be a jerk move. If you can’t afford to go out to eat, cook at home, no tipping needed. If you go out to eat, tip, and be glad the worker can pay their bills better. Maybe when they smile at you, it will be sincere.

calhoun
6 years ago
Reply to  Max

I agree and thank you for your comment. It’s a jerk move to not tip because of this legislation. If that was done by many, servers would get a big cut in their income.

Phil Mocek
6 years ago
Reply to  Max

I somewhat agree with Calhoun on this one. However, I’m less likely to tip if I think my tip is just going to reduce the employer’s obligation to pay his employee rather than increase the money the employee takes home. With a tip penalty, until average tips over a shift pass a certain threshold, all they do is reduce the amount of wages an employer is required to pay.

Sawant offered an amendment yesterday to remove the tip penalty from the bill. The amendment was defeated 8-1.

Jim98122x
Jim98122x
6 years ago
Reply to  15min

Maybe I am missing the point but there is nothing here that says restaurants need to include the tip in the bill. The “tip credit” means for taking into acct whether someone makes $15/hr, their tips will be counted in their earnings. That means they’ll have to declare them all. Probably will lead to a lot of pooled tips situations, might very well mean being taxed on tips that went unreported before. It doesn’t mandate “tips will be included in the bill”.

Phil Mocek
6 years ago
Reply to  Jim98122x

More specifically, it means the first several dollars per hour that customers pay workers as gratuity will be taken by those servers’ employers for use as wages so that the employers meet their minimum wage obligation under the law. So, until that worker receives a certain amount of tips per hour, your tips will go toward reducing the employer’s expenses, not to the employee. The employee will see tips only after the employer takes his or her cut.

calhoun
6 years ago
Reply to  Phil Mocek

Phil, is it really legal for an employer to take some of the employee’s tips? It’s certainly unethical, and that employer should be ashamed.

If it is in fact legal to do this, why aren’t the employee unions doing something about it?

Phil Mocek
6 years ago
Reply to  calhoun

It’s legal in jurisdictions where employers are allowed to count tips toward their obligations under minimum wage-and-nonwage-benefits laws. This is commonly known as a “tip penalty” or “tip credit.”

Let’s say the minimum wage is $15/hr and a worker receives from customers $5 during an hour that she works. It might seem that her employer is required under the law to pay her at least $15 for that hour of labor. But if there’s a tip penalty in the law, he would pay her only $10 for that hour. She earned $15 total ($10 from employer + $5 from customers), but she would have earned $15 even if nobody tipped. Thus, in that case, the tips went solely to subsidizing the employer’s obligation under the law.

Max
Max
6 years ago

I think I saw this play out on Oprah: “You get a car! And you get a car! And you get a car! In 5 years.”

steve treadway
steve treadway
6 years ago

What a bunch of clowns and buffoons running this city, and the loud crowd thinks they won something? Prices will start going up tomorrow and every 3 months or so till april 2015. Some of the people in the crowd shots at the meeting make me laugh they are so naive!!

Max
Max
6 years ago
Reply to  steve treadway

I wasn’t aware businesses had been keeping prices completely stable until this law passed. Clearly this law passing is the only economic factor affecting prices. Supply and demand has nothing to do with prices, nor energy costs, trends, inflation, competition, monopoly, etc. I’m sure the “Dollar Menu” at fast food joints will immediately go up to “The Dolllar 19 Menu” etc.

Franklin
Franklin
6 years ago

This is actually good. More people will move here for higher wages, promote more growth and lift all boats in Seattle. There will be a good supply of applicants to choose from. It’s an advantage for businesses to raise the bar and hire only the most skilled and productive. Or they can automate. This sounds counter intuitive but we will adapt, innovate, lower costs (with high quality staff) transform HR and do very well at the end, the rest of the country will envy us.

calhoun
6 years ago
Reply to  Franklin

Oh, really? What about those small businesses which will go belly-up because of the increased labor costs? And what about those businesses which might have located in Seattle, but will decide not to because of the high minimum wage?

Phil Mocek
6 years ago
Reply to  calhoun

I’m optimistic that we will find business models that pencil out without relying on poverty wages.

frank n stein
frank n stein
6 years ago
Reply to  calhoun

this is an opportunity for bigger cost savings if businesses rethink labor and adapt. how about doing more with less. the supply of minimum wage workers will swell and is good for businesses. for example, upgrade job requirements and qualifications, hire 2 smart healthy people instead of 4 mediocre ones to do the same work smarter, leverage efficiency opportunities, and invest in automation technology.

CC-Haus
CC-Haus
6 years ago

$15/hr minimum wage for the cost of living in Seattle is too high. San Fransisco? Yes, $15/hr makes much more sense there, not here. 15 is a round number and good for banners and chants and imaginary realities, that’s why it’s being used. $11/hr for a STATEWIDE minimum wage is much more appropriate and progressive. Dumb government.

Max
Max
6 years ago
Reply to  CC-Haus

How much do you make per hour? Exactly.

Jim98122x
Jim98122x
6 years ago
Reply to  Max

Not sure why that matters what he/she makes. People are not “entitled” to make as much as everyone else does.

CapitolHillNeighbor
CapitolHillNeighbor
6 years ago
Reply to  Jim98122x

Neither should they have to get by on poverty wages.

Phil Mocek
6 years ago

This isn’t about what people deserve or about what they should have to get by on. It’s about what we think should be required of those who wish to operate a business involving employees in our city. After five to seven years, we simply won’t allow someone to operate a business in Seattle that involves paying people less than $15 for each our of labor.

Jim98122x
Jim98122x
6 years ago
Reply to  CC-Haus

I don’t disagree with that, but what CC-Haus makes is totally irrelevant to the question.

trackback

[…] Ed Murray will be in the park named for his political mentor to sign the legislation passed Monday that puts Seattle on track for $15/hour minimum wage. The ceremony is slated to begin at 1:15 PM in front of the park’s […]

calhoun
6 years ago

I am really glad that Sawant’s three amendments got voted down. The plan as passed was carefully put together by the Mayor’s committee, and is a reasonable compromise between the opposing sides. There will be some negative consequences, but hopefully not anything too significant.

The 15Now! folks are maybe going to put up an initiative on the ballot this fall to overturn this legislation and try and get their rigid requirements in place instead. I hope they decide not to do this….the plan as passed is radical enough.

Phil Mocek
6 years ago
Reply to  calhoun

Oh, so you favor a tip penalty? You think that an employer should be able to count tips paid by customers to employees as wages? This means that when you tip someone, you’ll likely just be subsidizing the employer’s payroll expense, not providing anything extra to the employee.

15min
15min
6 years ago
Reply to  Phil Mocek

Tip penalty should go away. Pay servers a living wage and remove the idea that we all must tip an additional 20% to subsidize these lazy business owners. Tips for extraordinary service, not for just doing your job.

calhoun
6 years ago
Reply to  15min

A Seattle Times article recently reported that the average pay for a server in Seattle is $28/hour (including tips). I can’t vouch for the accuracy of this figure, but if it’s true most servers are doing quite well for the work they do.

Shaking His Head
Shaking His Head
6 years ago

We could/should have looked to SeaTac to understand the implications of this type of change.

Ask the workers there how this type of wage increase really impacts their take home pay. Be sure to ask about their employer 401K contributions. And their free parking. And their free meals.

At the end of the day the employers (who already operate on tight margins) will find a way to maintain a manageable cost structure for paying employees and their overall COGS.

trackback

[…] signed the minimum wage bill passed by City Council on Monday that very closely resembled the mayor’s May Day compromise plan. The council added several […]

Drew
Drew
6 years ago

Business owners will have no choice but to pass along increased labor cost to consumers. Also, the buying power of anyone that already makes over $15/hour will be diminished unless everyone gets a 50% raise.