Businesses balk at minimum wage increase
Cook Ray Kitzke cleans a grill at The Hang Out, a Moses Lake bar and restaurant, Tuesday. He claims the state's upcoming minimum wage increase still makes it impossible for those earners to make ends meet.
MOSES LAKE — Some say next year’s minimum wage increase to $8.67 per hour creates problems for businesses and workers.
Starting Jan. 1, the 12-cent increase makes it difficult for employers to create new jobs when the entry level wage is so high, said Debbie Doran-Martinez, the executive director of the Moses Lake Chamber of Commerce.
Employers are having to train and invest thousands of dollars into helping make a new worker productive, she said.
“Unfortunately, businesses out there are trying to grow and could bring on new positions and new jobs,” she commented.
Additional expenses of workers’ compensation and benefits bring a minimum hourly wage to $12 and $14 per hour.
“Over time, those positions are going to shrink and you can’t sustain that growth,” Doran-Martinez says.
Ray Kitzke, a cook at The Hang Out in Moses Lake, says the increase still results in minimum wage earners like himself unable to make ends meet.
Before he was hired at The Hang Out, he was a homeless veteran living in the backseat of his car, he explained.
“We don’t have good credit,” he commented. “No one wants to rent to us.”
He claims the cheapest rent in town costs $450 per month.
After paying for rent, gas and auto insurance, he only has between $75 and $80 per month for other expenses.
He says most companies paying minimum wage don’t provide more than 32 hours of work per week, to avoid paying health insurance to part-time workers.
The minimum wage increase is tied to the Consumer Price Index (CPI-W) for Urban Wage Earners and Clerical Workers.
The state Department of Labor and Industries describes the CPI-W as “a national index covering the cost of goods and services needed for day-to-day living.”
The CPI-W decreased in 2009 and 2010, so minimum wage remained at $8.55 per hour.
Columbia Basin Herald Publisher Harlan Beagley said he’s been an outspoken opponent of minimum wage being tied to the consumer price index.
“Eight (dollars and) sixty-seven (cents) per hour prevents small business owners from hiring more people and having more layers,” he commented.
The increase costs jobs in the state, he said.
Minimum wage was never meant to be a living wage and the increase prevents small businesses from hiring younger workers, Beagley said.
State Labor and Industries (L&I) requested the opinion of Washington State Attorney General Rob McKenna’s office, but disregarded his advice.
According to his opinion, the law “does not require the Department of Labor and Industries to increase the minimum wage every time the CPI-W increases, without regard to the actual cost of living reflected by the CPI-W or its pattern of increases and decreases over time.”
“In response to your second question, we read RCW 49.46.020 (4) (b) to bar the department from reducing the minimum wage when the CPI-W declines. The department, therefore, must hold the minimum wage steady until the CPI-W regains its lost value.”
“Once the CPI-W reaches the index value on which the existing minimum wage calculation is based, RCW 49.46.020 (4) requires the department to respond to increases in the CPI-W by increasing the minimum wage,” the opinion states.
For more information, visit Wages.Lni.wa.gov or call 360-902-5316 or 1-866-219-7321.