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to Section One | to Arts & Entertainment
posted Friday, June 6 2014 - Volume 42 Issue 23
Mayor signs minimum wage bill, but it's not a done deal yet
Section One
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Mayor signs minimum wage bill, but it's not a done deal yet

by Mike Andrew - SGN Staff Writer

Mayor Ed Murray signed Seattle's new $15 per hour minimum wage ordinance into law June 4 in a ceremony at Cal Anderson Park, but the measure is already being challenged by a lawsuit and an initiative campaign sponsored by business groups.

'We have taken a great step forward in the challenge of addressing income inequality and rebuilding the middle class,' Murray said at the signing ceremony. 'And it's a step we recommend to other cities around the country who seek to take action as we have.'

The new ordinance will benefit some 100,000 minimum wage workers in Seattle, and is expected to pump an estimated $3 billion into the local economy.

The City Council passed the bill on June 3 in a form more or less matching the recommendations of Murray's Income Inequality Advisory Committee (IIAC).

The $15 per hour minimum will be phased in over three years for businesses with more than 500 employees, and over seven for smaller businesses.

Small businesses will be able to count tips and employer-paid healthcare benefits as part of the wage increases during the phase-in period, but that system gets phased out as the $15 base wage gets phased in. After the $15 threshold is reached, the minimum wage will be pegged to the CPI (Consumer Price Index) so that wages go up automatically as prices rise.

As a final concession to businesses, the City Council added provisions to pay some workers subminimum 'training wages,' and pushed back the start date of the ordinance from the proposed January 1 to April 1, 2015.

Franchise owners sue Franchise businesses, like McDonald's and Subway, will be considered 'big businesses,' will have to increase wages to $15 within three years, and will not be able to count tips as part of wage increases.

Even before Murray signed the bill, the International Franchise Association (IFA) said it would file a lawsuit to overturn Seattle's 'unfair and discriminatory' ordinance.

IFA CEO Steve Caldeira said the plan would impact 600 franchisees in Seattle, with 1,700 locations and 19,000 workers.

'These hundreds of franchise small business owners are being punished simply because they chose to operate as franchisees,' he charged.

'Decades of legal precedent have held that franchise businesses are independently-owned businesses and are not operated by the brand's corporate headquarters. The City Council's action today is unfair, discriminatory and a deliberate attempt to achieve a political agenda at the expense of small franchise business owners. By picking winners and losers among Seattle businesses, this policy flies in the face of all legal precedent and defies common sense.'

Asked about the suit at the signing ceremony, Murray acknowledged that franchise owners have legitimate financial worries, 'but their issues are with their franchisers, not with the City. I'm sorry lawyers are going to take even more money out of their pockets.'

Ironically, the local movement for a $15 wage was kicked off by a May 30, 2013 strike of workers from the very fast food franchises whose owners are now suing to prevent the City from implementing the new minimum wage law.

Business group files initiative
While the City figures out how to deal with the IFA suit, another business group filed an initiative to replace the Mayor's plan with what they call 'an alternative way to increase the minimum wage.'

Forward Seattle, a group claiming to represent 'local independent businesses' announced its initiative campaign June 5. The pro-business plan only increases wages to $12.50, however, and is phased in over five years. It does not include cost-of-living increases.

IIAC co-chair David Rolf, President of SEIU (Service Employees International Union) 775NW, said the initiative violated agreements between business and labor representatives on the IIAC.

'Despite widespread agreement among the Seattle business and labor community not to pursue competing ballot initiatives, and overwhelming public support for the ordinance just passed by the City Council and signed by the Mayor, a fringe group of right-wing ideologues in the business community today showed that they will stop at nothing to prevent workers from earning a living wage,' Rolf said in a statement.

'This is selfish, short-sighted, and stupid. Those of us on the IIAC who worked tirelessly for months to produce a plan that works for labor and business are deeply disappointed to see others pursuing plans that would weaken the gains for our community. We certainly don't expect them to succeed.

'We call on Forward Seattle to release a list of the businesses who support their initiative. That way Seattle consumers will know which establishments not to patronize.'

At a June 5 press conference Rolf said he thought the Forward Seattle Initiative was 'not likely to succeed.'

Rolf, whose union was the driving force behind the successful $15 per hour initiative in SeaTac last year, promised that 'compared to what we're prepared to do in Seattle, all the resources and energy we put into the SeaTac initiative will look like a picnic!'

15Now, the group associated with City Council member Kshama Sawant, has also filed an initiative for a $15 an hour wage without the phase-in period for big business and without the complicated rules for tips and healthcare benefits in the Mayor's plan.

They were reportedly ready to drop their initiative after the City Council passed Murray's proposal, but Rolf said he 'would not blame them at all' if they continued to collect signatures while Forward Seattle was doing so.

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