Seattle Mayor Ed Murray unveiled a plan Thursday to raise the city’s minimum wage to $15 an hour, which will make it the highest in the United States. (San Francisco currently has the highest minimum wage of $10.74.) Many small-business owners—even those that say they support a modest wage increase—argued that a $15 an hour wage would cripple their operations, forcing them to reduce employee counts or even close shop.
The mayor’s plan, however, will be phased in. Seattle employers with 500 or more employees won’t face a $15 an hour minimum wage until 2017, while small businesses that pay their employees tips or benefits won’t be required to pay the full $15 until 2021.
Seattle City Council’s expected approval of the plan is likely to have ripple effects throughout the country and embolden local and national political leaders looking to increase their minimum wages. It could set the stage for more heated fights on the local and national level between labor activists and political leaders pushing for higher wages and small-business owners who say they can’t afford to pay their workers more.
The minimum wage debate is already heating up nationally. The National Federation of Independent Business sent a letter to the U.S. Senate on Tuesday saying that Iowa Senator Tom Harkin’s proposal to increase the federal minimum wage from $7.25 to $10.10 per hour would hurt small businesses that are already grappling with other cost pressures. It referred to a recent Congressional Budget Office study that showed that at least 500,000 jobs would be lost by increasing the minimum wage to $10.10.
“With increases to health care costs, higher taxes, more costly regulations and now a dramatic minimum wage increase, small-business owners simply can’t afford another excessive government mandate,” said NFIB manager of legislative affairs Ashley Fingarson, according to The Daily Caller.
Though small-business lobbyists are lining up to fight minimum-wage hike proposals, some small-business owners are voluntarily increasing their base wage. Punch Pizza of Minneapolis recently increased the hourly wage of its lowest-paid employees to $10 an hour, receiving praise in President Obama’s State of the Union Address. Jaxson’s Ice Cream Parlour in Dania Beach, Florida recently decided to start paying its more than 70 employees at least $10.10 an hour.
“We were thinking, 'What would it be like to try and live on $8 an hour?'” Jaxson's longtime general manager Jerry Smith told the SunSentinel. "We are witnesses to [our employees] daily struggles.
Read more articles on HR and benefits.
Photos from top: Getty Images