Inside Washington’s Failed Minimum Wage Experiment

Date: May 13, 2015

New research shows the state's initiative might not have achieved its goals.

Washington’s current minimum wage of $9.47 an hour, the highest state minimum wage in the country, is linked to a 1998 initiative that indexed the minimum wage to inflation for the first time in the U.S., according to a recent op-ed in the Everett, Washington Herald.

As labor activists throughout the state look to further increase the minimum wage, the editorial’s authors, Maxford Nelsen, a labor policy analyst at the Freedom Foundation, and Patrick Connor, Washington state director for NFIB, caution against further increases given the track record of the previous hikes. 

The article draws on Freedom Foundation research, which highlights some of the damaging effects of the increased minimum wage. 

According to the research: 

  • Decreasing poverty was one of the initiative’s major goals. Yet the average state poverty rate for the 15 years following the initiative saw a slight increase (0.2 percent) in the poverty rate compared to the 15 years before the passage. Meanwhile, the average national poverty rate for the same period saw a slight decrease of 0.7 percent.  
  • The state’s teen unemployment rate has been higher than the national rate every year since the initiative passed, including 8.2 points higher than the national average in 2010. 
  • Accommodation and food service jobs (i.e. hotel and restaurant jobs) were specifically hurt compared to other industries. The state’s share of those jobs have fallen by 5.7 percent since the initiative’s passage.

Further minimum wage increases could hurt businesses: The editorial highlighted NFIB research that showed that “a $12 minimum wage statewide would eliminate about 16,000 private-sector jobs, mostly at small businesses, and sap $7 billion from the state’s economic output over 10 years.”

The debate rages on elsewhere. In New York, Governor Andrew Cuomo pushed to raise minimum wage last week for fast-food workers, as Crain’s New York Business reports. The article reports that NFIB in New York said the push was “setting a frightening precedent by governing via executive order and completely usurping the legislative process.”

Related Content: Analysis | Labor | Minimum Wage | National

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