Politics from the Palouse to Puget Sound

Thursday, January 04, 2007

"Washington minimum wage increases with new year"

From the Associated Press:
Thirty-cent spike has some border-town businesses eyeing Idaho

MOSCOW -- James Randall lives in Moscow and goes to school at the University of Idaho. But for 30 hours a week, he crosses the state line into Pullman to work as a pizza delivery driver.

That's because Washington's minimum wage is more than $2.00 higher than Idaho's $5.15. And it just went up again Monday, from $7.63 to $7.93.

It applies to workers in both agricultural and nonagricultural jobs, according to the state Department of Labor and Industries. And it's recalculated each year for workers age 16 and older, based on cost-of-living increases, and is expected to reach $8.14 by 2009.

"It's kinda hard to make ends meet," Randall said. "I'm just glad the state of Washington has tied the minimum [wage] to inflation. That way it's advantageous to everyone." Maybe not everyone. Some businesses in Pullman say the steadily increasing minimum wage in Washington starts to make that Idaho border look a little more tempting.

"You'd like the wage to support families, but it's also difficult for a border town," said Pullman Chamber of Commerce Executive Director Fritz Hughes. "It's a double-edged sword. It's good for some folks, and on the other side, it's difficult for some small business." Idaho's minimum wage has been at the federal level of $5.15 an hour for about 10 years. A state bill to increase the wage to $6.15 an hour -- and mandate yearly increases tied to inflation, like in Washington -- died in a House committee this spring because some lawmakers feared it would lead to higher prices, increase unemployment rates and reduce incentives for low-paid workers to improve themselves.

In Moscow, the city voted in August to pay its employees a "living wage" of $10.25. But that only applies to city employees, or those employed by a company that contracts with the city.

Hughes said he think the higher wage has put a damper on development on Pullman. The higher minimum wages translate into higher prices, he says -- which can be tough, when there's a town with lower prices less than 10 miles away.

Lori Meyer, who owns Simply Tanning and Nails Spa in Pullman, says she doesn't mind paying her seven employees an extra 30 cents per hour, but if wages hit $9.50, she's going to have to cut back and raise prices.

"As a small business, it's going to catch up to me eventually,"
she said. "If it keeps going up, I'll have to even it out somehow."
Ah, life in Caitlin Ross's "business-friendly" Washington.


Paul E. Zimmerman said...

My companies have a few duties that we could hire someone to complete each day.

The problem is, the types of tasks involved are not worth $7.93 an hour to have someone else do them. $5 an hour would make it more worth our while.

However, the government has seen fit to step in and not just prevent us from paying someone less than $7.93 an hour; the government has also prevented willing, private individuals from freely contracting with us for work such a person might be happy to do for $5 an hour.

Minimum wage laws are a double-edged sword that slices both ways, in this respect. Most people only see it as something that businesses must simply shoulder. They fail to think of people who would willingly work for less than the mandated minimum wage, if they found the trade worthwhile, who instead simply do not have the option (and fewer options!).

Consequently, we have not and will not hire someone else to do these particular tasks for us. At $7.93 an hour, it makes sense for us to do it all ourselves and hire no one.

April E. Coggins said...

Paul: You explain it exactly. So far the unionized government can only dictate the minimum wage, they cannot dictate the minimum number of employees.

Paul E. Zimmerman said...

Minimum number of employees... I shudder at the thought. We shouldn't repeat that phrase very often, lest some politico catch on. :)

April E. Coggins said...

In my industry, a $7.93 per hour employee actually costs me $9.30 per hour because of mandatory taxes. Any voluntary benefits are in addition.