Washington Employers: $15 Minimum Wage Employer Survey Reveals Prices Increases, Layoffs

Business Wire


A statewide survey of more than 1,000 employers attracted 250 respondents most saying that a $15 minimum wage would result in reduced employee benefits, increased prices, shift work to non-Seattle facilities or close/relocate their Seattle operations.

The statewide survey conducted by Washington Employers of its 1,000+ employer members showed 44% as neutral, while 55% responded that it would have a ‘negative impact’ or ‘very negative impact’ on their organizations.

Joseph Marth, Ph.D., Vice President at Washington Employers, said the most common concern was how it would drive-up the cost of goods and services, increasing competitive pressures.

Responding nonprofit organizations expressed deep concerns over the $15 minimum wage and its negative impact to their organizations. “One social service non-profit said unless there was a corresponding increase in state funding, it would be 'financially devastating' – costing them $1.5M or 18.6% in additional salaries and impacting 78% of their workforce,” he said.

“We are hearing from our employer-members that they are not making any investments in their facilities located in the Seattle city limits because of the threat of this ordinance,” one employer said. “They are all making plans to try and find facilities outside the city and are going to make their investments there.”

Employers say the cost of labor is their largest business expense. “Increasing the minimum wage by 30% will be destructive,” another employer said. “We certainly will not be able to increase our fees by 30%. We will have to cut business costs somewhere else.”

Most employers said a $15 minimum wage would affect overall employee earnings by reducing incentives and rethinking commissions and tip income.

“The proposed increase would be especially hard on food service organizations causing prices to increase ‘significantly’ to offset the additional cost,” Dr. Marth said. “Preschools are another sensitive area where increased teacher costs could not be offset by subsidies or passed along to families.”

Employers reported the increased minimum wage would also increase payroll taxes (FICA and UI). Small and medium sized businesses contend the higher wage will result in lower margins and less money to put back into employee programs. Many businesses already compete for bids against competitors who pay much lower wages off-shore.

Established in 1936, Washington Employers is now the region’s largest Human Resources consulting and employee training organization with more than 1,000 employer members.

DeLaunay Communications
Pete DeLaunay, 206-682-3699
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