Benefits and consequences of Seattle's $15 minimum wage

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by GLENN FARLEY / KING 5 News

Bio | Email | Follow: @GlennFarley

KING5.com

Posted on June 3, 2014 at 5:52 PM

Updated Tuesday, Jun 3 at 9:02 PM

SEATTLE - Will Seattle’s $15 minimum wage law mean the end of the $5 foot-long sub?

As the law gets Mayor Ed Murray’s signature, businesses have come out swinging. Already the International Franchise Association says it will file a lawsuit against the law, saying that franchisees are on the fast track to fully implement the wage just like large companies, even though a franchisee may own one or two stores and is really a small business.

“Many of us started from nothing and worked our way up,” said David Jones, the owner of two Subway franchises in Seattle, with a third in Everett.

“We aren’t billionaires,” added Jones, referring to rhetoric used during the campaign citing the whopping salaries of fast food CEOs who exemplify the growing income inequality within the American work force.

Jones says he pays most of his workers at least in the $10 an hour range within a few months after they start.  That puts those workers above the current Washington state minimum wage of $9.32.  Managers typically make around $15 an hour now, with managers with broader responsibilities making even more.   He says as the minimum wage goes up for the least experienced workers, all salaries must rise to justify the added responsibilities that managers have.

“I based my calculations on everybody getting a raise,” said Jones.

That means by the time the law for franchisees and large businesses with more than 500 employees hits the full $15 by January 1 of 2017, Jones will raise his prices 75 cents a sandwich.

Small businesses have until 2021 to fully comply, which Jones said allows them to hold down their prices as franchisees are forced to raise theirs. 

“It’s a big deal, because every time you increase your prices, consumers get scared off.”
 

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