Business Columns & Blogs

SeaTac wage vote to have longest, widest repercussion from 2013 election

The most consequential election outcome in this region in 2013 occurred not at the state level (rejection of the food-labeling initiative means nothing changes) or in its largest city (Tweedledum or Tweedledee for mayor, flip a coin, check back in four years to see how fast Seattle voters get bored with the new incumbent).

Instead the vote likely to have the longest and widest repercussions, not just in its community but for the region and perhaps the state, was a ballot issue voted on in the small town of SeaTac (population just under 28,000).

Proposition 1, placed on the ballot by initiative, would require “certain hospitality and transportation employers to pay specified employees a $15 hourly minimum wage, adjusted annually for inflation, and pay sick and safe time of 1 hour per 40 hours worked,” according to the voters guide summary. “Tips shall be retained by workers who performed the services. Employers must offer additional hours to existing part-time employees before hiring from the outside.”

We use the conditional only because the outcome isn’t absolutely certain. The initiative won by 77 votes in election results certified Tuesday afternoon. That was out of 6,003 votes counted, according to The Associated Press.

But the obvious answer to the ever-popular question “What’s next?” appears to be “Recount!” Common Sense SeaTac, a business-backed group that opposed the initiative, announced Tuesday it is requesting a recount. And that is a significant aspect to this issue — if the result is reversed, then nothing happens, at least in SeaTac.

But the issue is not likely to fade from view. It could provide further momentum to an issue that is likely to wind up on council agendas and voter ballots all over the state.

The political/electoral aspect of the answer to “What’s Next?” is more interesting than the economic one, not because the economic issues are unimportant but because no one on either side of the issue is likely to be moved on the question.

You can stack dueling studies on the economic effects, on business and to employees, of hiking the minimum wage, to the point those studies will eventually topple over on someone.

That’s likely to be the only effect of those studies, because they won’t sway anyone. In the long run, a sizable increase in the minimum wage (Washington will be at $9.32 an hour as of Jan. 1, less than two-thirds of what SeaTac would go to) won’t be the economic bonanza that proponents claim, but it also won’t provide the immediate, dramatic penalties on business growth and job creation that opponents predict.

Those costs do matter, particularly for the low-margin businesses that are paying minimum wage in the first place.

But the effects of those costs will play out in ways that statistical tracking won’t pick up for months or years, if at all. Businesses’ options are not limited to instantly hiking pay and taking the hit, or immediately laying off employees, or closing. They can use attrition, since minimum-wage jobs are likely to have higher turnover rates, reconfigure the work, shift it to other locations, automate or outsource to reduce the labor component of costs.

Politically speaking, the effects of passage of Proposition 1 will be much more immediate.

A likely place to start is that city up north. The newly elected mayor endorsed the idea of a $15 minimum wage, as has the newly elected socialist member of the City Council. Given the political leanings of other members of the council, and of a “more progressive than thou” city generally, it’s more challenging to come up with a scenario in which it doesn’t pass. To the extent the business community is listened to at all, many aren’t in lines in which minimum wage is an issue, and aren’t likely to squawk a lot.

Tacoma is a tougher read, but if other communities follow SeaTac and then Seattle, expect it to at the least get some discussion.

At the state level, split control of the Legislature would seem to temper any enthusiasm for tackling the issue. But there’s always the initiative process. That’s how Washington got its current structure of a minimum wage, annually adjusted for inflation, that is the highest in the nation at the state level. Initiative 688, which was on the 1998 ballot, backed by organized labor and approved by two-thirds of those voting, had a two-stage, two-year increase in the minimum wage that amounted to a 33-percent increase.

The 1998 voters pamphlet’s arguments by supporters and opponents of that initiative could, with few adjustments, be employed in 2013. Or 2014. Or beyond, depending how long it takes the issue to either gain momentum and be widely endorsed and approved or meet with repeated rejection.

Be prepared to hear a lot more about it in the coming year – and keep a wary eye out for falling studies.

Bill Virgin is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at