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Editor’s note: The aggressive minimum wage hike in SeaTac, Washington will be a good barometer for the rest of the country. This is an article from Glenn Levar’s Shared Time Human Resource ManagementNewsletter.
Small Businesses Discuss the Problems Posed by a Rising Minimum Wage
With 40 employees and less than $5 million in annual revenue, the franchise hotel in SeaTac, Wash., could be the typical American small business. But the Holiday Inn Express will soon have to give most of its staff pay raises that are anything but routine.
An official in SeaTac, which is 10 square miles nestled between Seattle and Tacoma and consists of an airport and its surroundings, confirmed this month that it will raise the minimum wage for many workers to $15 an hour starting in January. That's a 63% increase and the highest municipal minimum wage in the nation.
The original vote in November was so close that a recount had to be ordered.
SeaTac is an extreme example of the mounting labor costs facing employers nationwide, and it may serve as a controlled experiment on the impact of a significant wage hike in a small community.
Elsewhere in Washington state, employers already pay $9.19 an hour, the highest state minimum wage in the country, and that amount will rise 13 cents next month. In January, Oregon's hourly minimum will climb to $9.10, New York's to $8.75 and Vermont's to $8.73. Among municipalities, San Francisco currently has the highest minimum wage, at $10.55, which will increase to $10.74 next month.
Han Kim, a partner in the 171-room Holiday Inn Express franchise in SeaTac, as well as two other SeaTac hotels, estimates that for all three, the city's wage hike to $15 hourly will result in about $400,000 in additional labor expenses. Sarah E. Needleman December 11, 2013 online.wsj.com
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