Business Columns & Blogs

Big questions loom over minimum wage, area’s economic fortunes

Here is some stuff I know, the “chipping the frost off the keyboard and the election results” edition:

• Voters in four states — Alaska, Arkansas, Nebraska and South Dakota — approved increases to the state minimum wage. A fifth, Illinois, approved an advisory ballot measure recommending an increase.

Closest to Washington, Alaskan voters approved an increase from $7.75 an hour to $8.75 starting Jan. 1 (information comes from the website Ballotpedia). That will be followed by an increase to $9.75 an hour in 2016, and then the rate will be adjusted according to the inflation rate or increased by $1 above the federal minimum, whichever is more.

Arkansas’ Issue 5 increases the minimum wage from $6.25 per hour (yes, that’s lower than the federal minimum of $7.25, which was the effective minimum) to $7.50 per hour as of Jan. 1, 2015, to $8 in 2016 and $8.50 in 2017.

Nebraska’s Initiative 425 calls for an increase from $7.25 to $8 on Jan. 1, and to $9 in 2016. In South Dakota, Initiated Measure 18 increases the minimum wage from $7.25 an hour to $8.50 on Jan. 1, with inflation-based hikes in following years. The minimum for workers receiving tip income goes from $2.13 to $4.25. Illinois’ advisory vote endorses an increase in that state minimum from the current $8.25 to $10 on Jan. 1.

Note that in the four states where the ballot measure actually makes law, the increase on Jan. 1, 2015, will put those minimum wages below Washington’s, which is at $9.32 an hour and will go to $9.47 next year. (Illinois’ ballot measure calls for a higher minimum, that’s merely a recommendation to that state’s Legislature, which would have to enact an increase). Also note that the votes weren’t close on these measures. Alaska’s Ballot Measure 3, for example, was approved with 68.8 percent of votes cast.

This sets up some interesting political confrontations at the national and state level. For the feds, where the minimum was last raised in 2009, calls to increase the current minimum of $7.25 will face debates not only over how much ($10.10 an hour has been a widely promoted target) but whether substantial increases should be left to the states to decide, to account for regional differences in cost of living.

That latter issue is likely to come up in Washington, where the business community is already warning about proposals to increase the state’s minimum to $12 an hour. The effect of a $15 an hour minimum in Seattle and SeaTac has yet to fully play out, and given regional differences and political realities (those most in favor of a big increase are not in control of the state Senate), $15 is likely a nonstarter.

How about $12? That’s not much more attractive a sale for many parts of the state. But expect to hear plenty about the issue come January, and not just in Olympia but in cities and counties where proponents of a higher minimum may figure that the wave of ballot measures around the state and Seattle’s leap give them political cover for something less ambitious.

• Speaking of the Legislature, the other issues you’re likely to get an earful of in the next session are education funding and a “transportation package.”

Of those two, the second is the (comparatively) easier to handle, financially and politically. Just about every corner of the state stands to get something — in this corner the big-ticket item is completing state Route 167 as a four-lane, limited-access freeway from Puyallup to the Port of Tacoma — and what politician doesn’t like cutting the ribbon on fresh concrete?

Even better, the financing challenge might not be so vexing. With gasoline prices now below $3 a gallon in places, and the economy muddling along, voters won’t immediately and automatically say no to a gas-tax increase, especially if they get a clear accounting of what they’re getting.

But if it were that easy, it would have been done already, and it’s not so it hasn’t been. Among the unfortunate occurrences that could kill even the prospect of a highway construction package, much less voter approval: another expensive screw-up on a high-profile project (yes, we’re talking about you, Seattle waterfront tunnel); a separate tax increase proposal for schools; a transportation package that is larded up with nonhighway frou-frou; or another excursion into the Columbia River Crossing debacle, complete with still more insistence on forcing light-rail on an area that doesn’t want it.

• On a nonlegislative matter that could well wind up in the Legislature’s lap in a few years. Boeing CEO Jim McNerney told a conference that the company plans to introduce a successor to the 737, an all-new plane, by 2030.

So there it is, a time frame for the next huge economic-development debate for this region. Despite the sound of it (especially for those of us who grew up thinking 2014 was another century away), 2030 isn’t far off. That’s just 16 years, which isn’t a lot in commercial aviation terms, given all the work that has to be done and decisions to be made in the design, marketing, testing and assembly of an entirely new airplane model. If anything the time frame is even shorter than that, because many of those decisions have to be made early in the process. They won’t wait around 16 years.

One of those big decisions, and the most crucial for us, is where that plane will be built. Will it be built here? Do we want it to be built here? How badly? What are we willing to do or pay to keep Boeing here?

Start thinking about those questions now. The future will turn into the present a lot sooner than you expect.

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