Initiative 1433 – Washington State Minimum Wage

Washington state already has one of the higher minimum wages in the Unites States, and our minimum wage is already adjusted for inflation every year. However, that does not mean we have a living wage. Initiative 1433, on the ballot in November, aims to increase wages for the working poor by increasing our minimum wage and instituting a few other worker-friendly protections. I am sure there are some marginal businesses that this will hurt. If you are making a crappy product that is barely selling, having to pay people better wages may make your business not feasible. I’d rather protect people who are marginally making it than businesses that are marginally making it. So, unsurprisingly, I am in favor of Initiative 1433. The things it would do are:
  • Raise the minimum wage:
    Year Projected w/ Current Law New Minimum Wage
    2017 $9.55/hr $11.00/hr
    2018 $9.77/hr $11.50/hr
    2019 $10.02/hr $12.00/hr
    2020 $10.28/hr $13.50/hr
    2021 $10.56/hr $13.86/hr (projected)
  • Require businesses to provide paid sick leave at the rate of 1 hour for every 40 worked.
  • Require 40 hours of accrued sick leave to be rolled over every year.
  • Prohibit employers from requiring employees to find their replacements for sick time taken.
  • Prohibit discrimination against workers who use sick leave.
  • Expand minimum wage law coverage to include some additional caregivers who provide DSHS services.
The proponents of I-1433 claim that the new minimums will increase wages for 730,000 workers, citing the Budget and Policy Center (BPC). I can’t find with a cursory search how they obtained their numbers. In one place, the BPC says that 500,000 workers make less than $12/hour. The financial impact statement prepared for the voters pamphlet makes clear that a fair number of people will be raised out of poverty with I-1433, as it predicts a reduction in caseloads for a number of state programs that benefit the poor. the I-1433 opposition says that 1.13 million people make less than $13.50/hour in the state. That’s a lot of people who will be helped. One of the big arguments against I-1433, as noted by the Defeat 1433 folks is that the initiative would cost the state $363 million through 2022. What they don’t note in that argument is that those costs are primarily due to a 4 year lag in collecting unemployment insurance premiums. In other words, rates for 2020 are based on what employers pay from 2015-2019. So we’d be paying out unemployment compensation based on the new minimum wage but collecting based on the old minimum wage. As unemployment insurance rate calculation is not affected by this initiative, the legislature could easily remedy that through a simple majority vote. If the legislature doesn’t want to, any shortfall is on them, in my view, not I-1433. I-1433 also mandates sick leave. Workers at the low end of the wage scale don’t have much of a safety net if they can’t work. This gives them a safety net. The principle reason opposing this, according to the organization advocating defeat, is that it is unclear how much sick leave can be taken in a single year. That argument is based on rolling over 40 hours into a new year plus an additional accrual of 52 hours that year. How is a business to survive if they can’t tell if an employee might take between 0 and 92 hours of sick leave in a one single year??! You might think I’m being facetious with that claim, and you’d be right. A business allocates a certain percentage of money into a reserve account to account for that. That is approximately 5% of full time hours. It’s a fairly narrow range of unpredictability. I think they can adjust to the uncertainty a lot easier than low wage workers can adjust to the lack of income when they are sick. It’s important to note that opponents of higher wages predicted gloom and doom when Seattle and Seatac raised their minimum wages. Nothing of the sort happened. Maybe the opponents will be correct this time, but it would be a first. And if they are correct, then the legislature can halt or roll back the increases. A quick look at who is funding the campaigns, because I think that says a lot about who benefits. The Defeat 1433 campaign’s contributions come from the Washington Restaurant Association, the Washington Food Industry Association, and the Washington Retail Association. Their workers would benefit from higher wages. The other campaign is being funded by Nick Hanauer (a local businessman), unions (who might see higher dues from higher minimum wages), and a group called The Fairness Project. I should note that as of the information in the PDC’s database today, the proponents have raised over $3.8 million to the opponents $54,000. Featured image for this post taken by Elvert Barnes and used under a Creative Common Attribution license.