GSBA and the Minimum Wage

As a chamber for the lesbian, gay, bisexual and transgender (LGBT) community and those who support equality for all, the Greater Seattle Business Association (GSBA) has always supported equality in the workplace and is one of the only chambers to include social justice in its mission. GSBA agrees that everyone should earn a decent wage. Given the challenges faced by small business, it is important that any changes in the minimum wage be done responsibly. The Board of Directors of GSBA has passed a resolution stating that any increase in the minimum wage must include total compensation and be phased in.

GSBA took the lead in convening, coordinating and analyzing a survey with an informal group of over a dozen neighborhood business organizations.

Respondent Profile:

• 127 GSBA members
• 84% have 10 or fewer employees, 53% have 4 or less
• Most common sectors:  professional services (36%); retail, food and beverage (28%); and healthcare (13%)

GSBA members were much more likely to agree or strongly agree that income inequality in a problem in Seattle, with only 20% disagreeing with the premise. However, just 41% believe that raising the minimum wage will actually reduce inequality. Respondents generally agreed that there were other avenues to consider when addressing issues of affordability, namely supply of and access to affordable housing, childcare assistance and healthcare assistance:

What are the potential impacts of a $15 minimum wage?  Common responses include recognizing the need to do more for those workers earning the least, as well as deep concerns about a hasty implementation of a large, across-the-board increase in the minimum wage. 56% of GSBA members surveyed estimate that their operational costs will increase more than 6%, with 20% estimating an increase greater than 20%.

How would an immediate, across-the-board increase in the minimum wage to $15/hour impact your business? 

Members have expressed concerns that, for $15/hour, they would have to favor more experienced and self-sufficient job candidates and would no longer be able to afford to spend as much time training inexperienced employees just entering the workforce, while at the same time being unable to maintain current staffing levels. An increase in costs would be passed on to consumers, in many cases. Many members commented that they would be less likely to expand their businesses in Seattle, less likely to start a brand new business in Seattle, and more likely to close a Seattle location:

With a $15/hour minimum wage I would be significantly less likely to hire people who needed a start in the workplace or a chance to prove themselves and build their resumes. Until now I have hired most of my workers based on potential, helping them build their skills and resumes so that they can grow into higher wage earnings. At $15/hour I would expect a much higher level of competency and efficiency and would not put additional resources into training and development (as I do now).

I already pay more than the minimum wage in a competitive industry. I was about to expand in West Seattle but with talk of the $15 minimum wage I would have to raise my prices to a point I do not think clients would pay. Some small business service industries do not have a career path with any high earning potential. The job is the reward and is enjoyable. I have decided to expand in Auburn, Federal Way, Kent and Renton... My margin is too narrow. Like many small businesses. I do pay my staff as much as possible.

Other respondents were supportive of the idea of raising the minimum wage, but acknowledged that it is a complex issue and significant effort needs to be put in to get it right:

An increase in the minimum wage is only one part of the solution. The problem is complicated and will need multiple approaches to resolve. I strongly support an increased minimum wage. I do not know if $15.00 is the right number. I tend to think a higher number will do more to help working families survive in Seattle.

An increase, NOW, I think is essential. The question is, how high, and what follows. An immediate increase of the magnitude being proposed would be irresponsible, and would have an overall negative impact on employment and the economy-- in other words, it would end up hurting the majority of the people it's intended to help.

For those businesses who responded than an increase in the minimum wage would have little-to-no impact on their own work, many understood the broader impact it would have in the city:

The only reason I don't have anyone working for me for less than $15/hour right now is that I have very specialized and trained assistance at my business and I have fewer employees at fewer hours than I would ultimately like because I value their knowledge and would never pay them less than that. However, were I in a position to hire younger workers at a more entry level position, I would never be able to afford to create more jobs if the minimum starting wage was $15.

Regarding potential legislation on the minimum wage, 84% agree that total compensation should be taken into account. The additional compensation and benefits that employees receive most often include healthcare (67%), bonus (58%), retirement benefits (34%) and tips and commissions (31%). Furthermore, 67% of GSBA members want any increase to be phased in over 3 years or longer, with an additional 9% writing in that they prefer no implementation at all. Only 10% support an immediate implementation. There is no consensus over exemptions for any kind of business or organization.

In addition to the survey, GSBA has been meeting with elected officials including several City Councilmembers, members of the Mayor’s income inequality advisory committee, numerous small business groups and other gatherings around the city. GSBA will continue to advocate on behalf of its members, sharing the stories collected as well as providing hard data.

GSBA is committed to the idea that much more needs to be done to address issues of affordability in Seattle, as well as ensuring that big changes are made in a responsible manner to keep the lights on in our community businesses.