he economic absurdity of Washington state’s minimum wage (highest in the nation) and its job-killing penalties upon employers and those out of work looking for jobs have been in full flower for many years.
And all of that is about to get even worse next Jan. 1. The Department of Labor and Industries announced on Friday that the state’s minimum wage will increase next year by 1.4 percent to an artificially atmospheric $8.67 per hour. For a 40-hour work week, that will be $346.80 weekly, $1,502.80 per month and $18,033.60 annually. The state’s minimum wage is determined by an antiquated, 12-year-old, voter-approved initiative that ties the minimum wage to the Consumer Price Index.
Although the Legislature should research and craft some kind of remedy for voter approval, we’re not holding our breath, not with labor-union-obliged Democratic majorities controlling both chambers. But if and when lawmakers ever do get around to repairing this awful policy, here are facts they should consider:
? The minimum wage law is a huge issue in the restaurant industry: 200,000 workers in 12,500 restaurants adding $12.2 billion to the state economy and generating $635 million in state taxes. That industry has lost almost 13,000 jobs in the past two years. The Washington Restaurant Association opposed Friday’s decision, pointing to a “Social Security benefit freeze, state employee wage freezes and state employee furloughs.”
? The timing of this increase could not be worse, as the state’s employers try to claw their way out of the worst economic crisis in seven decades. Locally, the severity of this crisis was reported in the Business section of Sunday’s Columbian. An update of third-quarter economic activity in Clark County showed a 31.9 percent decline in home sales (new and pre-owned) compared with 2009 (in itself a dismal year) with 2,000 fewer people working. Local home construction is down 11.2 percent from last year.
? The L&I agency’s decision came despite an opinion to the contrary by state Attorney General Rob McKenna. The state’s minimum wage did not increase this year (for the first time since 1998) because the CPI fell last year. It’s growing again, but at a slower rate, and it’s still lower than the last time the minimum wage increased in January 2009. That’s all the evidence Mc-Kenna needed to recommend no increase. But the Washington state Labor Council disagreed with McKenna and the state L&I decided on the raise “based on how we believe a court would interpret the law,” according to a spokeswoman. McKenna said Friday that his office’s “interpretation of the law harmonizes the intent behind the initiative with the language of the law.”
Of course, until the CPI-related confusion is resolved by the Legislature, labor groups will not pass up any opportunity to jack up the nation’s highest state minimum wage (a few U.S. cities have higher local minimum wages).
? Among the possible solutions would be to freeze the state minimum wage unless the state unemployment rate drops below the federal unemployment rate; or perhaps a tiered system; or to cap the state wage at, say, 135 percent of the federal minimum wage. All three solutions have been presented in the Legislature, but without any meaningful action.
? By comparison, Oregon’s minimum wage will increase next year by 10 cents to $8.50 an hour.
? The purpose of a state minimum wage is noble. It is protective, keeping employers from exploiting workers. But a minimum wage should be an entry-level wage, a safe place for jobless people to reconnect to the work force, a stepping stone to higher, market-driven earnings. The minimum wage should not be a living wage.