OP-ED | Don Brunell: $15 Minimum Wage? Cumulative Costs Drive Employer Decisions

OPINION
September 22, 2016
The Lewis County Chronicle
Don Brunell

The $15 minimum wage is an example of elected officials with tunnel vision passing sweeping legislation while ignoring the cumulative impacts of all of the other government mandates on employers. …

Seattle’s ordinance took effect on April 1, 2015.  It directs businesses with fewer than 500 employees to pay the $15 an hour wage starting in 2021. Employers with 500 or more employees (either in Seattle or nationally) will reach that level in three years.

The University of Washington is charged with only studying the ordinance impacts on Seattle’s businesses, workers and the overall economy.

Earlier this spring, UW researchers determined it had a minimal effect; however, they learned through employer surveys to anticipate businesses increasing prices for goods and services.

Meanwhile, some restaurants are already adding surcharges to their tabs.  In Seattle, Sanford’s restaurants added a 2.55 percent “living wage surcharge” which goes to the house as a way to offset the costs of the city’s minimum wage hike. 

It is not just Seattle impacted by the minimum wage, at the state level, voters are asked to approve I-1433.  If approved, it would step-up the state’s hourly minimum wage from $9.47 to $13.50 by 2020.  It also requires employers to provide paid sick leave starting in 2018.

The unintended consequences of the current approach are reduced work hours, fewer jobs, business closures or relocations, and an acceleration in the pace of automation.

Recently, Forrester Research reported new artificial intelligence systems and robots have replaced 6 percent of all U.S. jobs in the last five years. …

Unfortunately, the reality in this highly competitive world is costs drive employer decisions.  

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Don C. Brunell is a business analyst, writer and columnist.  He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at theBrunells@msn.com.