Editorial: Everett voters should reject both wage initiatives

By The Herald Editorial Board

It’s been a dozen years since some 200 fast-food workers walked out of New York City restaurants, demanding a minimum wage of $15 a hour, launching what was called the Fight for $15, seeking an increase of the federal minimum wage that was then — and remains — just $7.25 an hour.

Since then 30 states — while Congress has dragged its feet — have set minimum wages at a rate higher than the federal requirement, with Washington state leading the pack. Currently the statewide minimum wage is $16.28 an hour and is set to increase to $16.66 as of Jan. 1, 2025, to account for inflation, a wage model that was established by state voters in 2016. (California could take the lead next year if its voters approve a measure that would increase its minimum wage to $18 an hour starting next year.)

At the same time, several local governments in Western Washington have passed ordinances that set higher minimum wages than the state, including — depending on the size of an employer’s workforce — Tukwila at $20.29; unincorporated King County at $20.29 as of next year, Seattle at $19.97 as of next year; and SeaTac at $19.71 an hour.

Voters could now add Everett to the list, with their choice of two ballot measures for the Nov. 5 general election, seeking to increase the minimum wage by nearly $4 to $20.24 an hour. But while both would set the same minimum wage, there are important distinctions between Initiative 24-01 and Initiative 24-02 and the groups that sponsor each.

At the end of the work day, however, those distinctions point to the complexities of adopting a minimum wage that is fair to employees and businesses and is more likely to head off any unintended consequences.

The first measure was proposed earlier this summer by representatives of the Snohomish and Island County Labor Council and the local chapter of the Democratic Socialists of America as Everett Deserves a Raise; the second, Raise the Wage Responsibly, as a response to the first measure by a group backed by the Washington Hospitality Association and others, representing local restaurants, hotels and other small businesses and nonprofits.

While both seek the same minimum wage and both attempt to distinguish between larger and smaller businesses, the competing measures could have differing consequences for workers and employers, as outlined Wednesday by The Herald’s Will Geschke.

The chief difference between the two measures is in the tips earned by some workers. The first initiative would not count tips as part of the $20.24 an hour; the second would include tips, as well as the health insurance premiums and retirement contributions paid by employers.

And tips can account for a significant portion of some workers’ wages. Raise the Wage Responsibly provided figures from an informal survey of 14 restaurants in Everett, showing an average — dividing total tips collected against number of employee hours — of $15.93 in tips per hour, with most restaurants reporting a range between $11.25 to $21.88 an hour in 2023.

While many states and local governments across the county include tips and related compensation as part of the minimum wage, Everett would be the only city in the state to do so if 24-02 prevails, as Seattle will phase out the practice at the start of the year. Current state wage law does not include tips as part of the minimum wage.

The two initiatives also make a distinction between which businesses would count as a large employer. The first initiative would consider businesses, such as a fast-food franchise like a McDonald’s, as part of the corporation, requiring the higher starting minimum wage, while the second considers such franchises as an independently owned small business that could keep its minimum wage at the state level until July 1, 2027.

There’s also the issue of the hourly wage that both initiatives would set at the start: $20.24 an hour. While each allows for annual increases based on the rate of inflation, the starting point of $20.24 seems intended as more of a campaign slogan than an effort to determine what a fair wage for employees living in Everett might be.

The distinctions between the two initiatives point to the complexities of wage and employment law, and the pitfalls of attempting to adopt such an ordinance through the citizen initiative process, as opposed to the adoption of city and county ordinances and state law.

While both attempt to address potential concerns, neither is as detailed as, for example, the state’s minimum wage law or that of Seattle.

As well, there’s a need for a deeper discussion of the impacts of a minimum wage increase for workers, business and community. Studies have shown that higher minimum wages can benefit workers, even beyond those earning that minimum wage. One 2014 study of Seattle’s minimum wage by the Evans School of Public Policy and Governance showed that while workers affected saw their weekly hours fall slightly, their wages increased enough to still provide a net increase of about $12 a week in pay, about $16 in today’s dollars. And while the evidence tends toward anecdotal, the effect on small businesses also needs fair consideration.

That discussion, including public meetings and comment, as well as a full review by the city’s legal team and consideration, discussion and proposed amendments by the city council could provide for a fair and living minimum wage in Everett.

Voters can set that task before the Everett City Council by rejecting both initiatives.