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Wednesday, March 5, 2014

State With Highest Minimum Wage Has Best Job Growth in Nation

Posted by on Wed, Mar 5, 2014 at 10:59 AM

Bloomberg News:

When Washington residents voted in 1998 to raise the state’s minimum wage and link it to the cost of living, opponents warned the measure would be a job-killer. The prediction hasn’t been borne out. In the 15 years that followed, the state’s minimum wage climbed to $9.32—the highest in the country. Meanwhile job growth continued at an average 0.8 percent annual pace, 0.3 percentage point above the national rate. Payrolls at Washington’s restaurants and bars, portrayed as particularly vulnerable to higher wage costs, expanded by 21 percent. Poverty has trailed the U.S. level for at least seven years.

We can and should have a debate about phasing it in, and how quickly, but we don't need to debate whether raising the minimum wage is a job killer. It isn't.


Comments (22) RSS

Oldest First Unregistered On Registered On Add a comment
If businesses (including small, local businesses) would have just chosen to keep their wages up in small increments over the years, the pot wouldn't be exploding as it is now. Now, it's come to a head and this is the result: businesses are having to deal with a potential giant hike in wages because they refused to pay their workers a living wage--whether that business is small or large, they have to pay the price of playing a part in this system.
Posted by PistolAnnie on March 5, 2014 at 11:07 AM · Report this
The report doesn't say that Washington has the best job growth in the nation, just better than the national average.
Posted by doctortaco on March 5, 2014 at 11:16 AM · Report this
Kinison 3
When you gradually raise it, sure it works, owners can juggle things and prepare . When you jump straight to $15 an hour, its probably going to sting small businesses hard and owners will probably cut hours immediately.

Most people calling for a $15 minimum wage, arnt talking about having it phased in. Its their money and they want it now.
Posted by Kinison on March 5, 2014 at 11:20 AM · Report this
@2 - right, we're outpaced by states with other horrendous burdens like income taxes.
Posted by SuperSteve on March 5, 2014 at 11:29 AM · Report this
Sargon Bighorn 5
And now you know in part why rents in Seattle are so high. And I support it 100%. Earning more is a good thing, but one must understand that other events will follow. It's about the money.
Posted by Sargon Bighorn on March 5, 2014 at 11:48 AM · Report this
keshmeshi 9

They can't really do that though. Consider all the bellyaching on Slog about how a higher minimum wage would kill small businesses while large businesses can allegedly absorb the cost. Anyone who voluntarily raises wages above the minimum is putting themselves at a disadvantage. This is why I suspect the big retailers are remaining silent about a national minimum wage hike. They're secretly hoping for it.
Posted by keshmeshi on March 5, 2014 at 12:47 PM · Report this
What Dan also neglects to mention is that our high minimum wage has contributed to us having one of the highest unemployment rates in the country for teens and people of color. So while white adults may celebrate higher pay, I guess everyone else can just suck it.
Posted by Stuart MC on March 5, 2014 at 12:51 PM · Report this
@9 I see what you're saying, but look at the disadvantage they're facing now!
Posted by PistolAnnie on March 5, 2014 at 12:57 PM · Report this
But aren't there far more studies saying that minimum wage hurts poor people than helps them? I agree that what actually happens trumps all theory, but could other factors have been in play in Washington?

My own take is there's a threshold. Employers would (and do) have people work for no money at all if they can get away with it, but require them to pay too much and yes they will hire fewer people (look at the way they react to benefits). For any given economic situation, there's a range within which a minimum wage does the worker good.
Posted by DRF on March 5, 2014 at 1:12 PM · Report this
One state does not end an economic debate. There are other factors at work in Washington which may be more important than the minimum wage.
Posted by Hal_10000 on March 5, 2014 at 2:02 PM · Report this
@1 - businesses have kept up with small increments. The minimum wage has been raised here and quite honestly the market is the biggest player here. Most small independent businesses pay above minimum wage. Your going wage for someone who is reliable and a decent worker is more in the $11-$13 range.
Posted by ahumanbeing on March 5, 2014 at 2:15 PM · Report this
I don't think most folks think that increasing the minimum wage in increments is unreasonable. But it is a far cry from 60%. People joke about why not $30, why not $100, but to those of us who are actually doing the books for these businesses a $15 jump is just as ridiculous.

Maybe that is there plan, but I really think this committee (those who are pro) want it all. Hey, nice to be a hero with someone else's money.

There is some reality to the fact that the higher the wage goes the less likely people at the bottom, the most unqualified will struggle to find work.
Posted by ahumanbeing on March 5, 2014 at 2:22 PM · Report this
@15 If that's true then bumping it up a little more to $15/hour isn't really as big of a leap that is being proposed, and small business should manage fairly well! I'd love to see your source that "most small businesses pay above the min. wage"

The bottom line is that when people have more discretionary income, they spend more, creating the need for more jobs at the places they spend their money. It's possible there may be a short term effect of some degree of job loss, but in the long run more jobs will be created. I don't understand what is so hard about this for opponents of the $15 wage to understand.

Posted by PistolAnnie on March 5, 2014 at 2:24 PM · Report this
@17 - of course, it is that simple. Why didn't we think of this before? Boy the business community must feel like complete idiots to have missed this boat.

Bottom line - I don't understand where you folks think ALL this money is? I don't understand why you think small business owners are hiding their cash in their mattresses? We aren't minting money here. This is the same money taken from one pocket and put in another.

I don't understand why basic economics are so difficult for people who are for this. I don't understand why people don't have the ability to do basic math in this city. Oh, yeah wait, I do, our schools don't seem to think math is important.
Posted by ahumanbeing on March 5, 2014 at 3:44 PM · Report this
@18 If your business is so flimsy that it can't afford to pay your employees a few more dollars an hour, maybe you shouldn't be in business.
Posted by PistolAnnie on March 5, 2014 at 4:03 PM · Report this
@20 Have you tried to live on below-the-cost-of-living wages?
Posted by PistolAnnie on March 5, 2014 at 4:10 PM · Report this
It seems like people have the choice of being on the side of small businesses or working people, with the way this issue is being presented. Being on the side of the worker will ultimately help the growth of small businesses. Why am I the asshole here?
Posted by PistolAnnie on March 5, 2014 at 4:14 PM · Report this
Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn 23
But Washington has the worst non-profit climate in the country, right? A non-profit can't offer services to needy people and still pay a high minimum wage. Right? Right? There's data on that right?

And bookstores. There's no decent bookstores where the minimum wage is high. Right?

A lot of people think Auntie's Bookstore is in Spokane, but that's impossible, at $9.32 and hour. Auntie's is really across s the state line in Coeur d'Alene.

The minimum wage in Idaho is only $7.25 and you can tell because their non-profits are way healthier than in Washington, and all the good bookstores are there in Pocatello and Boise and so on. Am I right?

Or take Portland. My god, can you imagine what Portland would look like if that town had even one decent bookstore? But at $9.10 an hour -- almost as bad as Washington -- bookstores are impossible. Right?
Posted by Ph'nglui mglw'nafh Cthulhu R'lyeh wgah'nagl fhtagn on March 5, 2014 at 4:26 PM · Report this
wtf ever happened to the phrase, "the cost of doing business"? Your small business isn't any more entitled to a free flow of cash than you apparently believe your underpaid employees are. I'm tired of hearing "small business owners" bitch about how hard they have it while simultaneously making sure everyone else has it even worse.
Posted by hurrdahurr on March 5, 2014 at 7:21 PM · Report this
I actually tend to agree that smaller businesses are more likely to pay more than minimum wage...well, at least the good ones. I was shocked to find out that my local *union* grocery store starts people at the local minimum wage, because I felt guilty shopping at the much nicer (and smaller-chain) non-union store down the street. But the non-union store starts their staff well above minimum wage (and it, again, shows for the most part). When I agreed to help out a local business owner friend (I didn't need the extra money, but he did need the time off), he paid me more than minimum wage to man the store for a few hours a week, and it didn't break him. And I know my favorite local hardware store pays their employees well...they treat employment there as a career rather than a job to get by and it shows.

That said, dramatic increases in wages should be phased in. Customers won't notice if their bill goes up $1/year each year over 4 or 5 years, but they will notice if it goes up $4 or $5 in a single year. I think it's the right middle ground to gradually move everyone up the ladder. One untested benefit of this might be lower taxes on business owners as fewer safety-net payments are needed to keep their employees afloat. There could well be a decent offset, especially for small businesses where a lot of the revenue ends up on personal taxes, that will make it more tenable than it otherwise seems.
Posted by Ms. D on March 6, 2014 at 12:31 AM · Report this
the big, immovable chunk of unemployed people are the long-term unemployed

WA has one of the most educated populaces and we're very white. unemployment is a more pronounced problem among black and brown folks, relatively speaking.

job growth has mostly sucked everywhere
Posted by alfresco on March 6, 2014 at 2:02 PM · Report this
@16 "Hey, nice to be a hero with someone else's money."

Is it their money legitimately in the first place? An alternative perspective is that this captured revenue represents the business owner's theft of wages owed to workers.
Posted by briavael on March 7, 2014 at 5:07 AM · Report this

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