Washington has the highest minimum wage in the nation and it's about to go up.
And while many are up in arms about the required pay increase, given the tough economic times facing much of our state, it is a real-world reminder of the power of voter-approved initiatives.
You see, the state's minimum wage is tied to the Consumer Price Index thanks to a 1998 voter initiative. Since that time, the state minimum wage has increased from $5.70 in 1999 to $8.67 in 2011. The federal minimum wage is $7.25.
Our neighbors in Oregon, with a minimum wage also governed by initiative, will see their minimum wage increase to $8.50 in 2011.
While the 12-cent increase in Washington's minimum wage will have some impact on the paychecks of the lowest paid workers in our state, it will have the most impact on the small businesses that are forced to absorb the pay increases.
Restaurants, businesses most susceptible to economic whims, have long struggled with the cost of minimum wage, and the fact that tips cannot be counted toward that hourly rate. Washington is one of the few states in the union that doesn't allow for a tip credit.
On the other hand, some businesses that had once derided our state's lead in the minimum wage category have found that better wages have made for better workers over the long term. And ultimately the goal of minimum wage is to make sure that all workers are making enough money to meet the basic needs of life.
But for those who still think Washington's status as the top minimum wage state in the nation is a travesty, be thankful that we haven't seen a rash of living-wage laws passed by cities here. The minimum wage in San Francisco, a city that is admittedly expensive to call home, will be $9.92 next year.
In this election season, the lesson of minimum wage is an important one to ponder. Read initiatives carefully, and fully understand what they mean before voting.
Washington's minimum wage initiative, for example, is tied only to inflation. That means it never will decrease. That's right, the price index can decrease, but that does not change the wage. But if it increases, expect another bump in the hourly rate.
State officials even stuttered before declaring an increase was indeed due in the minimum wage. In 2010, we didn't see an increase for the first time since the initiative passed because inflation fell last year. It is now growing again, but is still lower than it was when the minimum wage was raised the last time.
Labor & Industries consulted the state Attorney General and the group behind the initiative for opinions, delaying the decision for three weeks. In the end, L&I believed a court would interpret the law to mandate an increase for 2011.
And while hotels, restaurants and other businesses may not be happy about it, the voters of our state chose this mechanism for determining the rate of minimum wage pay, just another reminder about how important it is to vote and understand the ballot initiatives.