Tacoma voters have a new minimum wage proposal to vote for.
On Tuesday, July 14, the Tacoma City Council passed a proposal to put a $12 minimum wage on the ballot.
Tacoma Mayor Marilyn Strickland lauded the ballot measure as a compromise balancing the interests of both businesses and workers.
“I think you had people in the business community who, in my opinion, don’t even like the idea of raising the minimum wage. (They) heard from folks in the nonprofit world and the labor side, and they heard a lot about the plight of workers. Folks who were on the other side of the fence, conversely, had a chance to learn about some of the challenges that businesses face,” she said.
Under the proposal, the minimum wage would be raised to $12 beginning Jan. 2018,. It would start first by being raised to $10.35 beginning Feb. 2016 and would be raised again to $11.15 before hitting the $12 goal.
Thereafter, it would be adjusted annually based on the Consumer Price Index calculated and used by the state of Washington. It does not have a goal of reaching $15 per hour, which was proposed by a majority of the Minimum Wage Task Force.
The ballot measure will appear alongside the 15 Now measure, which would raise the minimum wage to $15 starting Jan. 2016.. It will first ask whether either measure should be enacted into law and then would make voters choose which option she or he prefers.
The 15 Now campaign has not signaled that it would remove its ballot measure from the elections.
Strickland said that there would be no tiers for different sized businesses, collective bargaining units would be included and no special circumstances will be created for tipped workers. The proposal will be implemented across the board.
“For me, I prefer something that applies to everyone. If it’s a good policy, it should work for everybody,” she said.
During the council meeting, council members David Boe and Anders Ibsen both approached the issue from a business perspective, but on completely different angles.
Boe, who runs a small architecture firm, said he could not support the proposal.
“I’m a little disillusioned by running my business for over 20 years,” he said. “As someone said early on, when you create a business, for me, it’s an extension of my values. And I’m very proud of the values my small business has. It is disconcerting to have a political body tell you what my values should be.”
He also said he was concerned about the inequality it would create with the surrounding communities. He said many non-Tacoma residents who happen to work in Tacoma would benefit, while Tacoma-based businesses would suffer and pay what he considered was an additional “tax.” Worse yet, those businesses might be tempted to move out of the city, he said.
Ibsen, on the other hand, said the minimum wage proposal was about equality. No longer is a “burger flipping job” just for teenagers or summer jobs that can pay off college. Now, adults are working those jobs, they can’t pay for college with the wages and they have very little opportunity to move up in the work force.
Ibsen argued that raising the minimum wage would elevate the economy.
“Whether you think that 12 is too little or 12 is too much, our status quo is unacceptable,” he said. “Our status quo is failing us on innumerable levels. We have a stagnant economy. Our (average income) is $8,000 less than the state average median income. That affects our economy. That affects our rents. That affects whether we see cranes in the sky, or whether we see new businesses wanting to move in.”
Whereas council meetings concerning minimum wage in the past have been largely overwhelmed by 15 Now advocates, this meeting saw more business representatives.
Donald Hansen, president of the Cascade Park Communities assisted living facility in the Stadium District, said he was in support of the phase-in $12 proposal, but argued that the 15 Now proposal would decimate Cascade Cares. Currently, about three-quarters of his employees are paid less than $11.
“If the minimum wage were to go to $15 an hour on Jan. 1, 2016, it would cost us an additional $630,000 per year. That’s over $50,000 a month. We could not exist on that basis,” he said.
Hansen explained that the business was already at break-even due to financial burdens placed on it by the Affordable Care Act and Tacoma’s recently passed paid sick leave ordinance. The only way to generate more funding is by asking the state for more money — a feat that can be accomplished he said, but one that takes time.
“Ninety-two percent of our funding is from Medicaid,” said Fred Wahlgren, vice president of operations. “If the state didn’t increase our revenue (if $15 per hour minimum wage were to go into effect), it would create some big challenges. There’s no way we can increase profit through private payers.”
As a result, Hansen said, 250 residents would have to be placed elsewhere and 120 employees would have to seek employment at other places, or else be unemployed.
“The city would lose a business that has been successful for 20 years,” he said.
Philip Panagos, owner of Social Bar and Grill and Paesan Pizza Kitchen on Dock Street, said he preferred a statewide measure, but would also prefer the $12 phase-in over 15 Now’s proposals.
“I’m happy to live in Tacoma and I’m happy to have a couple businesses here,” he said. “One does quite well and the other doesn’t, it doesn’t make any money at all actually,. I’m at a $400,000 loss this year. Going to $15 an hour Jan. 1 would easily put that so far in the water that it wouldn’t be worth doing.”
He said that he is a pay-by-performance employer, and that he does pay some of his staff minimum wage and they work part time, and other staff members work full time and make over $30 an hour.
“I think a lot of the people who are pushing for $15 an hour are imagining that small business owners have the profits to pay for this. I think both of my businesses would fail at that rate,” he said.
Case Coles, a Tacoma resident and small business owner, was blunt in his words.
“(If you pass $15 per hour minimum wage), you won’t have a $15 job, you’ll have no job,” he said.