Seattle is among the country’s highest wage cities. CNBC’s Kate Rogers reports from Seattle, Wash. on the unintended consequences of the wage hike.
When Seattle began raising its minimum wage five years ago, local burger joint Dick’s Drive-In experienced an unintended effect.
Its employees opted to work fewer hours as their wages rose, a tall order in a tight labor market.
“We thought with higher wages it would be easier to get people to take more hours, but it’s been the opposite,” said Jasmine Donovan, president of Dick’s. She added that the company has had to raise prices for the first time in its history because of the cost of labor alone, whereas in the past, food costs drove such hikes.
Seattle’s law, which gradually increases its minimum wage to an hour by 2021 from just over an hour in 2014, is now at the forefront of a national debate over the impacts of progressive wage increases. It comes at a time when top Democratic presidential candidates like Bernie Sanders and Joe Biden are calling for a per hour federal minimum wage as they try to appeal to working-class voters. The federal minimum wage is currently .25 an hour and has not been increased in over a decade.
“Seattle was catalytic to the entire national movement because what the Seattle City Council did by passing the law was show the entire nation that was not a ridiculous demand that people were laughing at back in 2012, but an actual key piece of policy that allowed for working people all across that city to have more money in their pockets that they spent in their local neighborhoods and then grew the economy and local business as a result,” said Mary Kay Henry, president of the Service Employees International Union, which launched the Fight for and a Union campaign.
Businesses like Dick’s have seen their costs go up. Dick’s pays above minimum wage, with some locations starting workers at and an hour, and most workers are students in their 20s. Benefits like 401(k) plans and health insurance are also available to workers regardless of the number of hours worked. But higher minimum wages citywide pressure employers to increase pay even if they are already above that threshold, in order to compete for talent.
Meanwhile, the Seattle law has been life changing for workers like Martin Johnson, who lobbied for higher pay with the advocacy group Working Washington. He works three minimum wage jobs — as a temporary cook on game days at the city’s stadiums, as a janitor at Costco on the overnight shift and as a handyman in his own small business. The raise brought with it more dignity for workers and boosted morale, he said.
“Instead of being paid an hour, you’re getting an hour to do the same work. You feel better about yourself — you feel appreciated,” Johnson, 54, said.
For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://www.cnbc.com/pro/?__source=youtube
» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic
Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.
Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC
More info on How Seattle businesses are responding to minimum wage hikes
Connecticut’s coming minimum wage increase is common ground for Democrats and Lamont, ‘where we are unified is on social issues’
Ritter, who was not at the Bridgeport event, said the Supreme Court decision overturning Roe v. Wade last week, upending a half-century of abortion law, also helped Democrats come together.
REMINDER: Minimum wage to increase in CT this week
The minimum wage rose in more than half of ... “This is a fair, gradual increase for workers who will invest the money right back into our economy and continue supporting local businesses in their ...
Most and Least Affordable Cities To Live on Minimum Wage
For minimum ... a business, but this cornerstone to the DFW metroplex is less forgiving to renters on the low end of the wage scale. In the past five years, there’s been a nearly 80% increase ...
Column: Minimum wage hike good for business
Gov. David Ige signed House Bill 2510 into law, putting Hawaii on a path toward the highest minimum wage in the country while expanding an important working class tax credit at the same time.
Seattle Enacts First-of-Its-Kind Ordinance to Provide Minimum Wage and Other Protections for App-Based Delivery Workers
Seattle Mayor Bruce Harrell signed into law CB 120294, a measure intended to ensure app-based delivery drivers are paid a minimum wage plus tips and compensation for expenses, i ...
Connecticut’s minimum wage rises again, to $14 an hour July 1. It won’t be the last increase.
Connecticut’s minimum wage ... $1 and cheering low-wage workers while adding to business owners’ worries about labor shortages and inflation. It’s the fourth annual increase since 2019 ...
Assessing Wage and Hour Insurance Coverage Following Proposed FLSA Amendments
The post concluded that the legislation, if enacted, would increase both the frequency ... by the Department of Labor’s Wage and Hour Division. Many businesses assessing potential new or ...
How will the federal interest rate hike impact you?
RELATED: Yes, typical U.S. rent has exceeded monthly income earned on the federal minimum wage "Housing really ... director Bob Whelan said businesses will respond to a tightening economy.
Minimum wage increase and rising costs putting pressure on Canberra businesses
It's been a tough few years for Canberra businesses as the black summer bushfires and COVID-19 pandemic saw many go under, with others are still recovering. This week, an increase in the minimum wage ...
Advocate Aurora's future partner Atrium Health increases minimum wage to $13.25 and $16 per hour
In December, Advocate Aurora Health increased its minimum wage to $18 and now its future business partner Atrium ... Advocate Aurora didn’t immediately respond to a request for comment.
Will Starbucks Eat McDonald's Lunch? How The Minimum Wage Is Reshaping Workforce Strategies
As Starbucks is based in Seattle, CEO Howard Shultz has actually gone on record saying the $15 hourly rate puts too much pressure on small businesses ... on the minimum wage, and increase it's ...
Paychecks Are Getting Bigger
will have enacted minimum-wage increases for 2015 (some of which are inflation adjustments), and cities such as Chicago, San Francisco and Seattle have voted to lift the minimum wage to as much as ...