Olympia, Wa- Tuesday, Oct. 27, the Olympia city council met to begin a discussion on raising the city’s minimum wage to $15 per hour upon pressure from a large body of citizens who continued to bring the issue forward to council meetings.
The pressure on the the city council in Olympia increased after the city of Tacoma produced both $12 and $15 minimum wage options on voter’s ballots this month following Seattle’s recent increase to $15. Despite its growing popularity in the Northwest, however, the debate is still an incredibly complex one occurring at local, regional, state, and national levels. Factors such as cost of goods, small business growth, housing prices, and the ability to compete economically riddle the minimum wage debate which hinders the ability of politicians and governing bodies to pass a higher wage, even if they support it in theory.
Opposing arguments on raising minimum wage are varied, but the one that continues to stop wage increase is the reality of economic impact. Many predict that a higher minimum wage will only increase the cost of goods. In short, business owners will increase the cost of the product so they can offset the profit they lose through having to spend more on employees. If the products cost more, then the extra wages a worker has earned does not truly improve their ability to buy the products. Even more frightening is the impact this can have on small business owners. Olympia City Manager, Steve Hall, proposed the potential problem of actually crippling small businesses,”The large businesses in Olympia can afford to regulate their costs despite higher wages, but small businesses may have to increase their prices making them less competitive.” Generally, people on either side of the minimum wage debate agree on promoting small businesses, but how to do so with fairer wages is still extremely complex.
Equally as compelling, however, is the argument that increased wages will also increase the flow of money into the economy. Ray Guerra, who recently ran for city council, addressed the city council to argue this point specifically. Guerra’s main point was that the economy has a lack of consumers with “liquid cash”, which is essentially extra cash people can spend outside of living necessities. This liquid cash is significant because any economy depends on the flow of capital. To put it simply, people need to spend money, so businesses can make money to pay people the money they can then spend. If people are not capable of spending money then the flow slows causing the rest of the economy to do the same. Guerra and many other citizens who spoke at the meeting urged the council to consider the economic boost that could potentially follow an increase in the minimum wage, especially considering that low-wage workers make up a large part of the city’s demographic.
These potential impacts of a minimum wage hike do not just affect little facets of a local economy, they affect the foundational blocks of local economy. These impacts also account for the hesitancy and caution with which the city of Olympia is approaching the subject, according to the city council. Both council members Jeannine Roe and Julia Hankins and Mayor Buxbaum voiced a desire for one thing: research that could help the council predict the effect of a $15 wage. Unfortunately, this request could be the greatest barrier to the $15 campaign in Olympia because established research is scarce.
Since the minimum wage wave has spread south from Seattle and SeaTac, it may seem logical to look to them as role models for Olympia. Neighboring cities and counties, however, who have enacted a minimum wage increase are not reliable examples of minimum wage impact for two major reasons: the wages are too new to study and the cities are too different. First, in an economic time frame, Seattle and SeaTac’s new minimum wages are far too young to reliably draw conclusions from in a study. Second, as Hall pointed out, Seattle and Tacoma are much larger cities with differing economic features. Seattle and Tacoma contain major, well-founded industries with many companies that count as large-scale employers. Olympia, in contrast, is dominated by small businesses. The number of businesses that make an annual gross profit of $250,00 or less in Olympia reaches into the thousands. These and the number of non-profit’s in Olympia will create major concerns for the city looking forward.
Undeterred, however, the council moved to continue the minimum wage discussion with a few specific steps: get estimates on research costs through an independent party, collect a breakdown of Olympia workers by various categories, and to seek the cooperation of the county as a whole. With the promise of further discussion on the subject, many advocates for the minimum wage present at the meeting left pleased like Caro Gonzales, an Evergreen student working towards a Master’s in Public Administration, who said “We are optimistic. The key is to keep the momentum going.” The city council set no particular date for the next discussion, but promised to reconvene on the matter.
photo: Kaylinne Shaffer