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Home / Washington Business - Spring 2003 / AWB Wants Minimum Wage Laws Changed Before It Kills Agriculture and Small Business |
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AWB Wants Minimum Wage Laws Changed Before It Kills Agriculture and Small Business |
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Written On: Spring 2003 |
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In 1998, when Washington voters overwhelmingly approved Initiative 668 automatically increasing the minimum wage each year, it seemed like a good idea. The economy was booming in the Puget Sound and the warnings of farmers, restaurant owners and small business people were drowned out by the sea of rhetoric from union and church leaders. Now, with the state’s unemployment rate among the nation’s highest and as the economy continues to limp along, the full bite of the initiative is felt. It’s a “job killer.”
Look what’s happened in the last four plus years. Our state’s minimum wage went from $4.90 in 1998 to $7.01 starting in January. Now only Alaska has a higher starting wage. Washington is only one of three states with an automatic annual escalator clause. The problem is ours is tied to the Seattle Consumer Price Index and Seattle’s wage rates are much different than those in Colville, Forks and Republic.
Here are two examples of how it killing jobs and employers.
Asparagus Industry Withering Away
Seneca Foods is the state’s largest asparagus processor. Each year, the company cans 34 million pounds of asparagus at its Dayton processing plant east of Walla Walla. But now, after decades as Columbia County’s largest employer, Seneca is talking about pulling up stakes and leaving Washington. Seneca’s departure would devastate Columbia County. The company pumps more than $37 million a year into the local economy.
Why? Costs of doing business and since asparagus cutting and processing is labor intensive, high wages are job killers.
Battered by low-cost South American imports and domestic competitors from Michigan, which has a $5.15 minimum wage, Washington asparagus growers watched Washington’s minimum wage automatically increase to $7.01 in January making them more uncompetitive.
AWB Board Member Bryan Alford, owner of Alford Farms, Pasco, said minimum wage and workers comp costs are killing asparagus growers. A couple of years ago, Alford had 500 acres of asparagus. That will shrink to 100 acres this season.
Clarkston Jobs Crossing River to Lewiston
Clarkston is a stone’s throw from Lewiston, Idaho. Because Washington’s minimum wage is a third more than Idaho and state and local sales taxes in Clarkston are higher than in neighboring Lewiston, businesses and shoppers are fleeing across the Snake River.
Right after the initiative passed, John Fazzari, a Clarkston restaurant owner, told us about the city’s budget crunch. “With the passage of Initiatives 695 ($30 license tabs) and 722 (property tax limitation) and the loss of gambling revenues to a casino in Lewiston, the city council needed to raise the sales tax. With Clarkston’s sales tax at 7.5 percent and Lewiston’s at 5 percent, guess where most people will shop and eat?”
Tying the automatic annual minimum wage increases to the Seattle Consumer Price Index just doesn’t make sense.
AWB Wants Law Change This Year
AWB is lobbying for three important changes:
1. Legislation that would establish a full-employment trigger.
It would tie any future indexing of minimum wage to the state’s unemployment rate. Months where our unemployment exceeds the national average would not be counted when calculating the increase in the minimum wage. Sound complicated? Not really, it would be a more realistic way to reflect what is happening in the economy and job market. In bad economic times, the automatic annual increase would be less and allow struggling employers to keep workers longer rather than laying them off.
2. It would allow employers to pay teens three-quarters of the state or federal minimum wage (whichever is higher). The change would provide more entry-level jobs for teenagers who need the work experience and cash for college or additional training.
3. The bill would establish local wage preemption. It would prevent cities like Bellingham from implementing so-called “living wage” standards. While implementing a “living wage” statute sounds good, in reality it doesn’t work. Many jobs are second jobs which supplement income. Some are entry-level jobs for teens that live at home. While everyone strives to provide living wage jobs, the fact is many jobs would disappear if state or local governments implement “living wage” laws.
“Changing our minimum wage law is a job maker,” Nelson concluded. “Failure to do so is a job killer. It is a simple as that and AWB members need to contact their legislators and urge them to implement our three changes this year.”
Editor’s Note: Before each issue of Washington Business Magazine, we ask one of our lobbyists to give you an inside perspective. Grant Nelson, who handles minimum wage and environmental cleanup issues, provides his insights on minimum wage. Grant can be reached at AWB (360) 943-1600 or e-mail: GrantN@awb.org.
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