Seattle’s minimum wage is going up again in 2020. But is it enough to afford to live in the city?
"A $15 federal minimum wage won’t cost Americans jobs, new study says"
The minimum wage for large employers is going up to $16.39 and for small employers between $13.50 and $15.75
By Becca Savransky, SeattlePI Updated 12:00 pm PDT, Monday, October 21, 2019
Photo: GENNA MARTIN, SEATTLEPI.COM
Image 1 of 32 The minimum wage in Seattle is going up again in 2020, but it still may not be enough to afford the cost of living in the city.
Seattle .. https://www.seattlepi.com/seattlenews/article/seattlepi.com/seattlenews ’s minimum wage is going up again in 2020, inching closer to the $15 minimum wage across the board for all employees. But even with the increases, it still might not be enough to afford basic costs of living in the city.
The city’s Office of Labor Standards announced this week .. http://www.seattle.gov/laborstandards/ordinances/minimum-wage .. the new minimum wages which will go into effect Jan. 1, 2020, as required by the Minimum Wage Ordinance. For large employers with 501 employees or more, the minimum wage is going up 39 cents to $16.39.
For small employers with 500 employees or fewer -- that don’t pay at least $2.25 an hour toward employee’s health benefits and where employees don’t get that same amount in tips -- the minimum wage is going up to $15.75 from $15. For small businesses that pay at least $2.25 an hour toward employee’s medical benefits or if an employee earns at least $2.25 in tips, the minimum wage is set at $13.50 an hour. In 2021, that is set to go up to $15 an hour.
Activists and officials have been fighting for higher minimum wages in Seattle and across the country for years, arguing workers need a higher income to be able to afford basic costs of living. Federal minimum wage has remained at $7.25 an hour for years, as states and cities have passed measures to raise that minimum. Across Washington in 2019, the minimum wage was set at $12 an hour.
Earlier this year, the House of Representatives approved legislation .. https://www.seattlepi.com/local/politics/article/House-backs-a-15-an-hour-minimum-wage-14106299.php .. that would increase the federal minimum wage to $15 an hour by 2025. The Congressional Budget Office reported in a study at the time that raising the minimum wage would result in at least 17 million people receiving a wage increase, but could put 1.3 million out of work.
When the minimum wage goes up, in general, employers are focused on finding more experienced workers, said Jacob Vigdor, a professor of public policy at the University of Washington and the director of the Seattle Minimum Wage Study. It’s easier to justify paying someone a higher wage if they already know how to do the job and don’t need to be trained, he said. With that logic, young workers who are just starting out and looking for a job would have a harder time, he said.
But, Vigdor said, in Seattle, a lot of jobs aren’t even offering the minimum wage anymore. They’re actually offering more. Raising the minimum wage has effects unless that minimum wage is below the market wage, Vigdor said.
“The overwhelming thing in the labor market right now is that there’s a labor shortage which is driven by the cost of living,” he said. “If $16 were enough to live on in Seattle, then we would see a lot of jobs posts offering $16, but we don’t. We barely see any.”
Vigdor said he hears two complaints from business owners: the first one is that the minimum wage is too high and the second is that they can't find anyone to hire so they have to offer more than that minimum.
"Complaint No. 2 negates complaint No. 1," Vigdor said. "If you offer the minimum wage and you can't hire anyone, the minimum wage is not really your problem, your problem is a labor shortage."
Vigdor said when you look at housing prices in Seattle, the current minimum wage just isn't sufficient. He added that many people working in low-wage jobs don't work full-time hours, making it even harder to afford the cost of living in the city.
Across all of Seattle, the average rent is $2,122, according to data from RentCafe .. https://www.rentcafe.com/average-rent-market-trends/us/wa/seattle/ . That means if a person makes $16.39 an hour, that individual would have to work for nearly 130 hours to afford rent. That’s more than three weeks of full time work to afford one month of rent and doesn't include other necessary costs such as food and transportation -- or the tax that's taken out of each paycheck.
--- [Insert: Cost of Living in Sydney: Weekly Rents The bulk of your monthly cost of living is going to be your rent. For a one bedroom apartment in Sydney plan on spending $450 to $550 a week minimum. Anything less and you’re looking at a very small place which might work for you or a place that is bug infested. Two bedroom apartments start at about $650 a week minimum. https://www.sydneymovingguide.com/the-cost-of-living-in-sydney/] ---
For people working for small businesses making $15.75 an hour, they would have to work for 134 hours. The amount varies depending on where an individual lives in Seattle, but across the board, people making minimum wage would have to put far more than the recommended 30% of their income toward their rent.
In neighborhoods such as Georgetown and South Park, where the average rent hovers around $1500, individuals making that $16.39 wage would still have to work for 92 hours to afford their rent. In neighborhoods such as Westlake and South Lake Union, where rents average more than $2,400, individuals making $16.39 would have to work for 149 hours.
Inside: INTERACTIVE Rent and minimum wage IMAGE
There are still opportunities for individuals and families to use vouchers and find affordable housing based on their income in Seattle, but the city and county faces a severe lack of affordable housing.
Vigdor said over the past several years, the city has added thousands of Amazon employees and tech workers who are paid well and are bidding up the price of housing in Seattle.
"These tens of thousands of tech workers, they all need to eat, they have kids who will need childcare, they will occasionally get sick or injured and use the healthcare system," he said. "The growth of the tech sector raises demand of workers in all these other sectors. The businesses in these sectors, they're looking around to try to find more workers.
He added: "The people who would be working those jobs are discovering that they can't afford to live here."
"When we see the population expansion in Seattle and King County over the past 10 years, low-wage workers are not part of the story of population growth in Seattle because the opportunities here for people looking to work in retail or services...they just don't offer enough to pay the rent," Vigdor said.
He said when minimum wage has gone up in the past, people began seeing higher wages and bigger paychecks, but they were seeing their expenses go up just as fast, if not faster.
"I think what we're discovering," he said, "is these cost of living challenges are really making Seattle a less attractive destination for less educated workers looking for some place to make a living."
SeattlePI reporter Alex Halverson contributed to this report.
"A $15 federal minimum wage won’t cost Americans jobs, new study says"
One watchdog win. In these days of worker exploitation always good to see.
David Marin-Guzman Workplace correspondent May 18, 2020 – 3.11pm
A sushi chain and its owners have been fined a record $891,000 for deliberately paying staff as little as $12 an hour and engaging in an elaborate cover up when they were investigated.
Federal Court judge Geoffrey Flick likened Hero Sushi's actions to "fraud" after it sought to disguise $700,000 in underpayments at three of its outlets in NSW, the Gold Coast and Canberra through hundreds of manufactured payroll documents.
Hero Sushi admitted it was offering the illegal rates to keep wages at 25 per cent of sales. Elesa Kurtz
The chain, which operates 17 outlets across the east coast including at major food courts and Sydney airport, didn't pay 94 employees minimum hourly rates, casual loadings, weekend or public holiday penalty rates, annual leave or superannuation.
In court, Hero Sushi admitted that it offered the illegal rates to maintain its target of keeping wages “between 20 to 25 per cent” of sales.
Justice Flick said employees' entitlements "were deliberately being sacrificed by [Hero Sushi] in order to maximise their own financial returns".
"Those in a position to ruthlessly take advantage of others pursued their goal of seeking to achieve greater profits at the expense of employees," he said.
"It's not about a culture of clocking in and clocking out, paying people the rightful wage is an ethical and moral obligation," he said.
"Lies were told to cover up the wrongdoing. It was only when the 'game was up' that those responsible admitted their misdeeds."
The court heard that over six months in 2016, on nine separate occasions, the chain gave false documents to the watchdog purporting to show it paid staff correct rates.
It was only at the end of a meeting with the FWO in August, at the chain's head office, that a payroll manager admitted Hero Sushi had "reverse engineered" the pay documents.
"The time and effort consumed in creating such false documents must have been considerable," Justice Flick said. "The documents produced were voluminous."
On one occasion Hero Sushi provided some 91 pages of documents to the FWO and on others 99 pages.
The head office would also tip off an outlet when an FWO inspector had arrived by monitoring CCTV cameras at its stores.
Many workers at the chain were on visas and worked 50 to 60 hours a week on flat rates of $12 to $15 an hour.
One worker who had just one day off a week received $1000 a week even if he worked more than 55 hours.
The workers would share accommodation with up to 10 people rent-free but had to pay to cover the cost of utilities.
The ruling follows FWO audits of the sushi industry in 2018 that found 87 per cent were underpaying workers and there was "widespread use of false records".
Justice Flick fined the outlets $600,000, its three payroll staff $121,000 and its two co-owners, Vaucluse residents Deuk Hee “William” Lee and Hokun “Robert” Hwang, $85,000 each. The total of $891,000 was the highest ever in a case brought by the FWO.
The judge noted the maximum fine the stores faced was almost $2 million and that penalties between $478,960 and $573,280 would have been appropriate for one store.
However, the FWO reached agreement with the store to reduce the fine to $225,000 after recognising the "totality" of its breaches and a 20 per cent discount for its "co-operation".
The judge said he had "considerable misgivings" about how much the fines had been reduced, saying some individual penalties "occasioned considerable concern".
"But for the endorsement on the part of the FWO as to the appropriateness of those penalties, the court itself may well have imposed considerably higher penalties."
The chain said it had backpaid the majority of former staff and engaged an external accountant to conduct an audit to ensure compliance.
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