Washington Uniform Minimum Wage Measure, Initiative 1358 (2014)
|Not on Ballot|
| This measure did not or |
will not appear on a ballot
The debate surrounding minimum wage increases hit home for Washington in 2014, when Seattle's city council voted to raise the city's minimum wage to $15 an hour. Set to begin phasing in on April 1, 2015, the increase was poised to make Seattle the highest minimum wage location in the country. Proponents urged the move and cheered its passage as a way to combat income inequality. At the time, Washington had the highest state minimum wage, at $9.32 an hour.
A survey conducted by the Pew Research Center in January 2014 found 53 percent of Republicans, 90 percent of Democrats and 71 percent of independents supported raising the federal minimum wage from $7.25 to $10.10 an hour, for an overall support rate of 73 percent. However, many were critical of using increased minimum wages to deal with income inequality and argued that such increases could actually harm the economy, overall. Concerns include employers cutting jobs because they would not be able to afford to pay all of their existing employees or even moving their businesses out of state for cheaper labor costs. Such reactions to a rise in the minimum wage had the potential to make some low income earners worse off than before an increase.
Text of measure
The official ballot title read as follows:
|“||Initiative Measure No. 1358 concerns minimum wages.
This measure would require that the minimum wage rate for employees of private employers be uniform throughout Washington and set by the state, and would void local minimum wage requirements for private employers.
Should this measure be enacted into law? Yes [ ] No [ ]
Ballot measure summary
The official ballot summary read as follows:
|“||This measure would require that the minimum wage standard for employees of private employers be uniform throughout Washington and set by the state. Local governmental entities would be prohibited from requiring minimum wage standards through ordinance, regulation, rule, resolution, permit, license, or contract; and existing local minimum wage requirements would be void and unenforceable. The measure would not prohibit project labor agreements authorized by state or federal law, nor affect existing collective bargaining agreements.||”|
Sustainable Wages Seattle was the main supporter of Initiative 1358. Richard Forschler was the primary sponsor of the proposal for this initiative.
Reports & analyses
At the time the measure was seeking ballot access, many studies had been done on the effects of minimum wages, real wage fluctuations and other aspects posited to be impacting economic inequality. The following provides a small sampling of the research that had been done.
CBO 2014 report
The Congressional Budget Office released a report on February 18, 2014 examining the effects of two proposed federal minimum wage increases. The first option sought to raise the rate from $7.25 to $10.10 an hour over three years. After reaching $10.10 an hour in 2016, it would continue to be annually adjusted for inflation. The second option reviewed sought to raise the minimum wage to $9.00 per hour by 2016 with no further adjustments for inflation to follow.
The report had the following findings for the first option:
- Projected employment reductions would be about 500,000 workers or 0.3 percent.
- Approximately 16.5 million workers would have higher earnings during an average week by the second half of 2016.
- "Real income would increase, on net, by $5 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 3 percent and moving about 900,000 people, on net, above the poverty threshold (out of the roughly 45 million people who are projected to be below that threshold under current law)."
The report provided the following findings for the second option:
- Employment projected to be reduced by about 100,000 workers or less than 0.1 percent.
- "Real income would increase, on net, by about $1 billion for families whose income will be below the poverty threshold under current law, boosting their average family income by about 1 percent and moving about 300,000 people, on net, above the poverty threshold."
The report also noted that federal spending and taxes would be indirectly affected by the increases in real income for some and reductions for others. It noted that for several years, an increase could likely lead to a small decrease in budget deficits for several years, but would likely see a small increase in deficits afterwards. However, the report was unclear on "whether the effect for the coming decade as a whole would be a small increase or a small decrease in budget deficits."
IRLE 2014 working paper
A March 2014 working paper from the Institute for Research on Labor and Employment of the University of California, Berkley examined the effects of minimum wage increases, as well as other employment regulations, in the city of San Francisco. In 2004, San Francisco raised its minimum wage from $6.75 and hour to $8.50 an hour. Further increases occurred at regular intervals which brought the minimum wage to $10.47, at the time of this initiative's proposal. In the working paper for the study, researchers Michael Reich, Ken Jacobs and Annette Bernhardt noted that these changes had almost no effect on the overall employment in the city. One study cited in the working paper demonstrated that there were "no statistically significant negative effects on either employment or the proportion of full-time jobs," while another found restraint employment rose faster in San Francisco than in surrounding counties following the wage increase.
The working paper provided the following conclusions regarding minimum wage increases:
- Paying workers more can change productivity, work attitude and ability to make it to work on time.
- Turnover may be reduced by minimum wage increases by reducing the number of workers leaving their jobs to look for better wages or "due to poverty-related problems such as difficulties with transportation, child care, or health."
- Firms can use a "combination of strategies," such as increasing costs for consumers or earning lower profits, to adjust to minimum wage increases.
- "Additional benefits, such as reduced spending on public assistance programs and the local stimulus of additional spending by low-income families, might also occur."
Levy Economics Institute
In a 2014 policy note from the Levy Economics Institute of Bard College, Fernando Rios-Avila and Julie L. Hotchkiss argued that the so-called "decade of flat wages" had actually been a decade of decreasing wages. The decade between 2002 and 2013 had been seen as a period with no real wage growth despite continued increases in labor productivity, according to the authors. They argued that, in fact, that decade was one of declining real wages with real wages at year-end of 2013 5 percent lower than they were in 2002 and closer to levels in 1998.
The study suggested the decline in gross domestic product (GDP) growth meant there was less growth in returns to labor and capital. "In turn, declining real wages means consumers have less to spend in order to fuel growth." The authors further suggested that educational attainment and experience among workers have propped up average real wages and that as the older generations retire "the average experience in the labor force will decline, pulling average wages down." The study also pointed out that any increases in productivity may not necessarily translate to raises in real wages because "the significant productivity growth seen since 1973 has not produced commensurate increases in real wages."
Path to the ballot
- Alaska Minimum Wage Increase, Ballot Measure 3 (2014)
- Arkansas Minimum Wage Initiative (2014)
- California Minimum Wage Increase Initiative (2014)
- Idaho Minimum Wage Initiative (2014)
- Illinois Minimum Wage Increase Question (2014)
- Louisiana State Minimum Wage Amendment (2014)
- Massachusetts Minimum Wage Increase Initiative (2014)
- Michigan Minimum Wage Initiative (2014)
- Minnesota Inflation Adjusted Minimum Wage Amendment (2014)
- Missouri Minimum Wage Initiative (2014)
- Nebraska Minimum Wage Increase, Initiative 425 (2014)
- New Mexico Minimum Wage Amendment (2014)
- South Dakota Increased Minimum Wage, Initiated Measure 18 (2014)
- Washington Uniform Minimum Wage Measure, Initiative 1358 (2014)
- Washington Wage-Setting Authority Initiative (2015)
- Washington D.C. Minimum Wage Initiative (2014)
- 2014 ballot measures
- Washington 2014 ballot measures
- Laws governing the initiative process in Washington
- The Seattle Times, "Tim Eyman’s intriguing counterattack to Seattle’s $15 minimum wage," June 9, 2014
- The Seattle Times, "Studies look at what happened when cities raised minimum wage," March 12, 2014
- Washington Secretary of State, "Proposed Initiatives to the People - 2014," accessed June 7, 2014
- Seattle City Council, "City Council Approves $15/hour Minimum Wage in Seattle: Historic vote addresses income inequality," June 2, 2014
- Pew Research Center for the People & the Press, "Most See Inequality Growing, but Partisans Differ over Solutions," January 23, 2014
- Townhall.com, "Seattle Set To Destroy Economy With Highest Minimum Wage Increase In The World," May 20, 2014
- Slate.com, "Jobless in Seattle," May 2, 2014
- Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
- Congressional Budget Office, "The Effects of a Minimum-Wage Increase on Employment and Family Income," February 18, 2014
- Congressional Budget Office, "The Effects of a Minimum-Wage Increase on Employment and Family Income (full report)," February 18, 2014
- The Seattle Times, "Studies look at what happened when cities raised minimum wage," March 12, 2014
- [http://www.irle.berkeley.edu/workingpapers/104-14.pdf Reich, M., Jacobs, K. & Bernhardt, A. (March 2014). Local Minimum Wage Laws: Impacts on Workers, Families and Businesses. IRLE Working Paper No. 104-14.]
- Rios-Avila, F. & Hotchkiss, J. L. (2014) Policy Note: A decade of flat wages? Levy Economics Institute of Bard College. 1-5.
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