A new minimum wage law has gone into effect in Seattle, Washington, that will raise the hourly compensation for workers to $15 over the next decade.
"Today Seattle gets a raise. When our $15 minimum wage is fully phased in, more than 100,000 workers across the city will benefit," Seattle Mayor Ed Murray said in a statement.
Seattle is the first major U.S. city to commit to such a high minimum wage. The plan was proposed by Murray in May 2014. It instigated other cities to do the same, like San Francisco who will phase in a minimum wage hike to $15 an hour by July 2018, reports Yahoo News.
The Seattle $15 per hour minimum wage will be phased in over the next decade. Whether a business must adhere to the new minimum wage will depend on its size and whether it provides healthcare benefits.
The full details and structure of the plan may be found at Seattle.gov’s Office of the Mayor Newsroom page.
Once the $15 per hour wage is given to an employee, annual increases will be based on cost-of-living changes, reports Reuters.
Beginning this week, workers at large businesses and national chains will receive the first-step pay increase to $11 per hour. Workers at small companies will receive at least $10 and the business will receive a $1 credit for their employees who earn tips or receive medical-benefit plan payments.
The minimum wage increase only applies to workers in the city of Seattle. For those who work in the suburbs, they will continue to earn the state minimum wage, the nation’s highest at $9.47 per hour.
According to a University of Washington study, an estimated 90,000 people earn less than $15 per hour in Seattle. The new wage will benefit them.
Some business owners, including those who already pay their employees $15 or more per hour, have said the new wage requirement will trickle-down to consumers, requiring them to pay higher restaurant and retail costs.
Other business owners believe the increase in wages will lead to more buying power and that will draw enough new business to their doors to offset the increase in labor costs.
Ivar’s, a local seafood restaurant chain, has already implemented the $15 per hour wage with an additional change: No more tips. They plan to see how their customers react to the new policy and move forward from there.
A grocery co-op and small chain Skillet have also already implemented the $15 per hour wage for their employees.
The new minimum wage is not without its opponents. The International Franchise Association and five Seattle franchises have vowed to fight the new law. They claim it discriminates against franchises and does not treat them like small businesses, as they feel it should.
The current federal minimum wage is $7.25 per hour. President Barack Obama has called on Congress to raise it to $10.10. Twenty-nine states and Washington D.C. already have a minimum wage above the federal rate.
Photo Source: Seattle.gov, WikiCommons