WHAT’S HAPPENING:
The proposal to create a permanent sub-minimum wage for tipped workers in Seattle was officially introduced as CB 120830 at full council on Tuesday, July 30, 2024, and formally referred to the Governance committee. This proposed legislation would roll back the central premise of Seattle’s minimum wage agreement by establishing a permanent subminimum wage for tipped workers.
Seattle’s historic 2014 minimum wage agreement allowed businesses a full decade to adjust to paying higher wages, during which time they enjoyed the economic benefits of the higher consumer demand created by those higher wages. This extremely long phase-in period was a major compromise, but that’s what it took for all parties to reach agreement, and a deal is a deal.
Finally, ten years later, this phase-in is finally set to be complete on January 1, 2025, at which point every worker in Seattle will finally have the same minimum wage, regardless of where they work or what type of job they do. As has always been the case, that citywide minimum wage in 2025 is the inflation-adjusted equivalent of $15/hour in 2017, which is when big chains first reached the $15/hour mark.
The current subminimum wage proposal would completely reverse our minimum wage law
This year, workers who receive tips and work at employers with 500 or fewer employees only have to receive $17.25/hour in pay, while every other worker receives $19.97/hour. Instead of letting those rates come together as the law provides, the proposal being referred to committee would keep them permanently apart, creating a permanent subminimum rate.
Under this proposal, the $17.25/hour subminimum rate would adjust with inflation, but because the $19.97/hour rate increases with inflation also, and $19.97 is bigger than $17.25, the gap between these two figures — the tip penalty — will grow larger each year.
This is a complete reversal of the minimum wage deal, which was built around the promise that when the phase in was complete, every worker would get to the same inflation-adjusted minimum wage rate. Permanent subminimum wages are unpopular, bad for the economy, and break the ten-year-old minimum wage deal.
As was agreed in 2014 and has been the law ever since, the minimum wage should be just that: the minimum. And customer tips should be a bonus for workers that goes on top of minimum wage — not a bonus for employers that lets them pay less.
City Council should reject this proposal and leave the minimum wage agreement in place, as it was negotiated and agreed to a decade ago.