What’s the difference between 2 measures to raise Everett’s minimum wage?

EVERETT — Two competing ballot initiatives want to raise the minimum wage in Everett to one of the highest rates in the country, but they take different paths to get there.

Some fear the similar measures may confuse voters as they fill out their ballots before Election Day on Tuesday.

Initiative 24-01, known as Everett Deserves a Raise, would increase wages to $20.24 per hour starting July 1, 2025, for employers with over 500 workers. Workers at medium-size companies — between 15 and 500 employees — would see their minimum wage rise gradually over time, reaching $20.24 by July 1, 2027. The initiative would not affect businesses with less than 15 employees, which would continue to pay the statewide minimum wage of $16.28 per hour.

Under the initiative, wages will increase annually based on the inflation rate in the Seattle metropolitan area. The measure would also prevent employers from hiring additional temporary or part-time workers without offering additional hours to existing part-time employees.

Sponsors wrote Initiative 24-02, known as Raise the Wage Responsibly, in response to the other proposal. The text is similar to Everett Deserves a Raise, but tips, health insurance and retirement contributions would count toward an employee’s wage, allowing employers to use those to make up the difference between the state minimum wage and the city’s.

Initiative 24-02 would allow employers to hire additional part-time employees, but only after offering the hours to current workers with at least three days notice. Employers also must count only staffers in Washington, not worldwide, toward company totals and treat franchises as independent businesses.

This would mean each individually franchised McDonald’s location, as an example, could be classified as a company with under 500 employees, and would be subject to the lower wage requirements. Under 24-01, on the other hand, companies like McDonald’s would be classified as large employers.

The Washington Hospitality Association, a trade and lobbying group made up of hotels, restaurants and other businesses sponsored Raise the Wage Responsibly. The group said these differences would allow business owners to withstand more of the costs of the wage increase.

“This proposal that is offered by Raise the Wage Responsibly isn’t to say no to an increase in the minimum wage, it’s to say yes” said Jeff Reading, a communications consultant hired by the Washington Hospitality Association. “It’s the same target Everett Deserves a Raise is seeking, but it’s also to say yes in a way that works for the people who have to pay that wage.”

Those backing Everett Deserves a Raise said the opposing measure was put in place to confuse voters and give loopholes to business owners.

“I think it shows how much we care, especially with the fact that we’re not giving the loopholes to those mid- and large-sized businesses to get away with things like saying the wage can be subsidized by tips,” said Shaina Langley, a volunteer for Everett Deserves a Raise. “The fact that it’s a response to the initiative that we put out, it just really shows what their intention was.”

Most other states and municipalities across the country allow for tip credits, which lets businesses pay employees a lower share of an employee’s wage, as long as the worker receives at least the minimum wage through a combination of base wage and tips. But Raise the Wage Responsibly would make Everett the only city in Washington to still allow them by 2025, after Seattle will phase out the practice at the start of the new year. The statewide minimum wage also does not count tips toward compensation.

Washington cities with municipal minimum wage laws, like Seattle, Renton and Tukwila, also define large employers as those with over 500 employees worldwide and don’t treat franchises as independent businesses, the same definitions used by 24-01. The state minimum wage does not differentiate between employers of different sizes.

Studies have previously shown minimum wage increases have no effect on food prices at supermarkets, while restaurants see price increases ranging from 0.56% to 4%. The costs of increased wages are mostly offset by the higher spending power of low-wage workers, increased efficiency, reduced turnover and a reduction in wages for higher earners, researchers say.

If 24-01 passes, however, Reading claimed Everett restaurants will have to raise prices or reduce working hours because of the industry’s meager profit margins, which have fallen to as low as 1.5% in Washington.

Kerri Lonergan-Dreke, the CEO and co-owner of the Lombardi’s Restaurant Group that operates Lombardi’s Italian Restaurant in Everett, said if 24-01 passes, her restaurant will have to move to a service charge, or built-in gratuity, model instead of a tip-based model, a direction she thinks the restaurant industry is heading toward. She supports 24-02 because she believes it will give restaurants more flexibility.

“There’s protections for workers, and yet it still allows restaurants to stay with the tipping model,” said Lonergan-Dreke, whose company also runs the Hook & Cleaver restaurant in Mukilteo. “At this time, guests like that flexibility, they like having the ability to tip.”

Proponents of Everett Deserves a Raise, however, said their provision already has protections for small businesses — as employers with less than 15 workers are exempt — and believe their measure can hold large companies accountable.

“That’s what’s so funny about naming your initiative Raise the Wage Responsibly,” Langley said. “The reality is the ones that need to be responsible are the businesses, and they need to be responsible by doing right by their workers.”

“This is not an anti-business legislation, this is a pro-worker legislation,” said Michael Berryhill, an engineer at Boeing and volunteer for Everett Deserves a Raise. “This is on the side of the people who have no say, who have never had a say, who have no agency. If you want to see this as something against you, that’s not the way to look at it.”

The Washington Hospitality Association, along with its political action committee, has spent over $50,000 toward the Raise the Wage Responsibly campaign as of Oct. 23, according to campaign filings. The campaign’s expenditures include two payments totaling $19,000 to a Florida consulting firm to gather signatures for the initiative.

Large donors include the Washington Food Industry Association ($5,000), Bloomin’ Brands, the Florida-based parent company of chain restaurants like Outback Steakhouse, ($5,000) and the Washington State McDonalds Operators Association ($2,000). Some local businesses like Evergreen Lanes, Totem Family Diner, Scuttlebutt Brewing and Lombardi’s also contributed. In total, the measure has raised over $78,000.

Everett Deserves a Raise has raised over $10,000, mostly donated by local retirees. The 38th District Democrats contributed $1,000, and the Public School Employees of Washington labor union pitched in $500.

Ballot initiatives pass through a simple majority. If both of the minimum wage initiatives pass, the one with the most votes will be implemented, city spokesperson Simone Tarver said in an email.

Will Geschke: 425-339-3443; william.geschke@heraldnet.com; X: @willgeschke.