Seattle will raise its minimum wage to $15 an hour over the coming years under a deal brokered by Mayor Ed Murray and blessed by labor and business groups alike, city leaders announced Thursday afternoon.
The new pay floor will phase in at different speeds for businesses of different sizes, but all employers will have to meet the $15 minimum wage by the end of the decade. Businesses with more than 500 employees nationwide will have a three-year phase-in period, while smaller employers get five years to ratchet up their payscales.
After reaching $15 an hour, the city’s minimum wage will automatically climb to match the rate of inflation. Even among states with relatively strong minimum wage laws, automatic increases are uncommon. Thursday’s deal will make Seattle the national leader on municipal minimum wage laws. Washington currently has the highest pay floor of any state at $9.32 per hour.
The deal was a long time coming, with Murray first indicating he wanted to establish a $15 floor back in September during the mayoral campaign. Murray created the 24-member advisory group that crafted the compromise package back in December, and the group of local business owners, restaurateurs, and labor leaders has been grinding toward an agreement for the past four months.
Approval from restaurant owners is especially noteworthy given the deal’s provisions for tipped workers. Tips can only be counted toward worker minimum pay for the next five years. After that, the separate minimum hourly pay rates for tipped and non-tipped workers will disappear, and all employees citywide will have to be paid $15 hourly or more.
An activist coalition called 15 Now led by the lone socialist member of the City Council, Kshama Sawant, has pledged to put an immediate wage hike before city voters in November if the deal falls short of the group’s goals. Another coalition, 15 For Seattle, issued a press release Thursday saying that “many of the coalitions 100+ progressive members have already endorsed” the deal but that others “are taking the Mayor’s proposal back to their organizations for review and approval.” Sawant’s ballot initiative would let employers with fewer than 250 workers phase in higher wages over three years but impose the $15 rate immediately for larger businesses.
Sawant is one of two members of the working group who is opposing the deal announced Thursday, according to a source close to the negotiations. The other is Craig Dawson, the owner of a payments processing company called Retail Lockbox. The head of the city’s Chamber of Commerce is abstaining. But the 21 votes in favor include representatives from two separate chapters of the Service Employees International Union (SEIU), the United Food and Commercial Workers (UFCW) chapter, and the MLK Labor Council, as well as local hotel owners, restaurant owners, a pair of Councilmen, and the venture capitalist Nick Hanauer, who has made a name for himself in recent years as a wealthy champion of economic policies that focus on the middle class rather than on business owners and the wealthy.
There are 102,000 workers in Seattle currently earning less than $15 an hour. Raising those people’s wages will put about half a billion extra dollars of spending money into Seattle workers’ pockets. As SEIU 775 president and coalition co-chair David Rolf said in a statement Thursday, the deal “will pump nearly $500 million into Washington’s economy, proving that a higher minimum wage fuels business and job growth.”
An earlier version of this story said Seattle’s wage floor would rise by 2.4 percent annually regardless of inflation. It will actually be pegged to a measure of inflation which officials project to be about 2.4 percent per year.