State minimum wage increases by 19 cents

Merchants, agriculture industry impacted

TUMWATER — Washington's minimum wage will increase Saturday to $7.35 an hour, up 19 cents from the 2004 minimum wage of $7.16 an hour.

The Department of Labor and Industries (L&I) recalculates the state's minimum wage each year according to the change in the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). The annual inflation adjustment is required by Initiative 688, which was approved by Washington voters in 1998. The CPI-W increased 2.6 percent during the 12 months ending Aug. 31, 2004.

Washington's minimum wage applies to workers in both agricultural and non-agricultural jobs, although 14- and 15-year-olds may be paid 85 percent of the adult minimum wage.

Several members of the area's business community responded to the news of the increase.

"I would imagine that (the merchants) will feel the difference," Moses Lake Business Association Executive Director Sally Goodwin said. "Who benefits (is) probably the minimum wage earner. Who doesn't benefit is the general public, in the fact that goods will have to be increased in cost to pass it on."

Vision 2020 chair Jacie Daschel said that the minimum wage won't impact most small businesses, who are already having to pay over it. The fast food industry and agricultural businesses are most impacted, she said.

"It's just one of those facts of life kinds of things," Daschel said. "I don't think the hardship that (it) is putting on business (is) the number one issue. Insurance costs, dollar-wise, are probably more of a threat to businesses."

"Nobody, I think, really wants to be an advocate of paying people the federal minimum wage, which is nearly a buck and a half to two bucks lower than the state," said Grant County Economic Development Council Director Terry Brewer.

On the other hand, he said, having to pay the state's minimum wage makes it very tough for some industries and agricultural producers to make it because their products are being sold at prices set by the marketplace.

"Producers in our neighboring states that don't have that kind of minimum wage can still grow those kind of crops, be it fruit in Oregon, potatoes in Idaho, beef, whatever — it makes it tough for (Washington growers) to be competitive," he said.

In order to stay afloat, some have to use less labor, meaning some jobs get eliminated, Brewer said. Some industries find it more beneficial over the long haul to mechanize and eliminate entry-level jobs.

Randy Allred, owner of Randy Allred Orchard, LLC, in Royal City, agreed with Brewer, adding that the wage increase has quite an impact, especially for the orchard side of the business.

"We employ quite a few part-time employees," Allred said. "It costs you quite a bit more for your labor … There's only so much you can do, so your cost of production goes up. It's not good for the apple industry as a whole."

Allred said the outlook is not really good for the coming year for his business.

"I just think that it doesn't help our competitive advantages of growing apples, against the rest of the country and against the rest of the world," he said.

Todd Dixon is manager of the WorkSource office in Moses Lake, which seeks to match employers with those looking for jobs. Dixon said that in the past year, in comparison to the previous five years, he's noticed more and more employees placing jobs that are 40 to 50 cents above minimum wage, and so he doesn't think the increase will have a big impact on Work Source business.

One of the roles of WorkSource is working with different customer groups, including WorkFirst Parents, with people receiving public assistance, Dixon said.

"With wages increasing, it should help decrease the number of families that are receiving cash assistance," he said.

But increase in wages does mean an increase in prices at the Golden Corral Family Steakhouse in Moses Lake, manager Donna Cantwell said.

"We will probably have to increase the price of our buffet a little," she said. "Nothing has gone down this year. Produce is high, all the food products are very high and then to have a wage increase, you kind of have to offset somewhere."

The restaurant, which employs approximately 35 employees, did not increase prices with last year's wage increase, Cantwell said, "but this year is a little more."

Washington is one of three states nationwide, along with Oregon and Florida, that have voter mandates to automatically adjust their minimum wages each year. Fourteen states have minimum wages higher than the federal minimum, which is $5.15 an hour.