• Chairman's Message

  • Jane Gandee, Chairman

    Virginia Should Take Heed from Seattle's Minimum Wage Law

    July 2017

     
    The November election will soon be upon us, and we need to understand what candidates have in mind legislatively for our state, as they ask for our votes.  "The Chamber opposes any effort to impose patchwork local wage requirements by localities or on those who contract to provide goods and services to the state or any locality.  We support wage differential for training and youth workers. We encourage the General Assembly to study the economic impact of a tiered minimum wage scale."
     
    In 2014, the Seattle City Council passed a law that would raise the minimum wage to $15 per hour for all wage earners by 2021.  Recently, a University of Washington team studied the laws impact for the City of Seattle.
     
    Per Janet I. Tu of the Seattle Business Times, the minimum wage law is boosting wages for a range of low paid workers, but the law is causing those workers as a group to lose hours and it is also costing jobs, according to this study.
     
    The study revealed that as the wages increased in stages, it resulted in a 9% reduction in hours worked in low wage jobs and ultimately resulted in a 6% drop in what employers collectively pay-and what workers can earn. The final tabulation meant a loss of about $125.00 per month per job.  This is a lot of money for a low wage job earner. The report also revealed a total loss of approximately 5000 low wage jobs directly attributed to the introduction of the law.
     
    Other inferences from the study showed that employers looked for higher skilled people to fill the higher paying jobs.  This approach hurt young workers, unskilled workers, or those entering the work force for the first time.
     
    Minimum wage jobs are typically a beginning or learning wage, to help the unskilled train so they may advance to higher paying and more fulfilling jobs. Minimum wage is often paid to high school students, during the summer to college students, or to a very low skilled worker, where work is seasonable or lacks stability due to other factors. Past studies, as well as government stats have shown that raising the minimum wage has not been an effective tool for bringing Americans out of poverty.
     
    Business owners, who have the responsibility for the bottom line, and must manage costs to stay in business, will find ways to work around government intrusion into the market place.  Unfortunately, long term consequences of such intervention many times, ends up hurting those it intended to help.
     

    Jane Gandee
    ServiceMaster NCR