Tacoma City Council Moves Forward With Minimum Wage Proposal

UPDATE:

At the Tuesday, July 14 city council meeting, the city council voted 7-1 to place the $12 phased-in minimum wage plan on the ballot in November alongside $15 Now's proposal. Multiple pro-minimum wage speakers threatened to throw their support behind $15 Now's initiative if the council went with the $12 minimum wage plan instead of the alternate $15 plan proposed by the minimum wage task force.

My testimony before the city council against all efforts to raise the minimum wage is available below:

Under the “$15 Now” banner, Socialist grassroots activists in Tacoma this spring gathered enough signatures to send a proposition to Tacoma voters this November that would create a $15 minimum wage for nearly all businesses in the city beginning Jan. 1, 2016.

It’s quite possible an increase in the minimum wage of this magnitude has never occurred so quickly in any major U.S. jurisdiction.

Understandably, the $15 Now proposal has Tacoma’s business community worried. The Tacoma Chamber of Commerce appealed to the mayor and city council in May to form a community task force to develop an alternative proposal the city council could place on the ballot alongside the $15 Now initiative.

After about a month’s deliberation, the task force submitted two plans to the city council. The majority plan, favored by the task force’s many labor activists and representatives of progressive non-profits, called for a phased-in increase to $15 an hour with different rates for small and large businesses, similar to Seattle’s ordinance.

The minority proposal, endorsed by business owners, called for a phased increase to $12 an hour, with no differentiation between large and small businesses.

Tomorrow, the Tacoma City Council will likely decide which plan to send to Tacoma voters for consideration alongside the $15 Now proposal. According to the Tacoma News Tribune, Mayor Marilyn Strickland favors a variation of the $12-an-hour plan.

Should the council ultimately decide to place the $12 plan on the ballot, rather than the alternate $15 plan favored by the task force majority, it would place labor unions in an awkward position.

On one hand, if unions throw their support behind $15 Now’s extreme wage hike and Tacoma voters approve it, the resulting job losses and business closures would provide plenty of ammunition to opponents of labor’s plan for a statewide $15 minimum wage initiative in 2016.

On the other hand, a victory for the $12 minimum wage would be seen as a defeat for the union-championed $15 minimum wage movement.

Consequently, labor leaders are pushing hard for the city council to choose the union-preferred, phased-in $15 minimum wage. Doing so would effectively ensure labor activists another victory for the magic $15 at the ballot box in November without the immediate negative consequences that would result from the $15 Now proposal. 

Of course, as University of Washington-Tacoma economics professor Doug Wills and I explain in a recent op-ed for the Tacoma News Tribune, both a $12 and $15 minimum wage will have negative consequences for Tacoma’s economy.