12 cent increase makes Washington state home to highest minimum wage in the nation
On January 1st, Washington saw its minimum wage increase by 12 cents. At $8.67 per hour, the state now has the highest minimum wage in the nation.
The Department of Labor & Industries (L&I) adjusts Washington’s minimum wage each year in September as required by Initiative 688, which state voters approved 13 years ago. The initiative requires the state to adjust the minimum wage based on the change in the federal Consumer Price Index (CPI), which reflects the cost of goods and services needed for day-to-day living.
The rate change didn’t come without controversy. A coalition of business groups tried to block the increase by arguing that this year’s CPI did not reflect a net increase in the cost of living since 2008. While the CPI does remain lower than the last time the state minimum wage increased (January 2009), the index did increase by 1.4 percent during the 12-month period ending August 31st, 2010. For that reason, a judge ruled against the coalition’s efforts.
“Our best read of the law is that when the cost of living rises over the previous 12-month period, the minimum wage rises accordingly,” explained L&I director Judy Schurke.
With the new minimum wage in place, the question as to how it will impact local businesses from here on out, remains.
For Scott Jackson, owner of the Dairy Queen at 7713 MacArthur Boulevard in Vancouver, the effect of an extra 12 cents per hour, per minimum wage employee, is minimal at the moment. However, he said that won’t be the case for long.
“I have a much smaller staff during the winter, so the increase isn’t too bad right now. But it’s going to be bad in the summer,” said Jackson, who employs several minimum wage earners. “It’s hard to raise prices right now, so the wage increase will definitely affect the number of people I have on hand.”
During the summer, Jackson said he typically increases his staff to between 20 and 25 employees. Now, he said he’ll keep it between 15 and 20. He said the only thing that will change that is if business goes through the roof.
“Things can still pick up if everyone gets out there and starts spending money,” he said.