SEATTLE — After facing a mostly disapproving crowd during Tuesday's Seattle City Council meeting, Councilmember Joy Hollingsworth stood by her proposed legislation. It would exempt businesses with 500 or fewer employees from matching the higher minimum wage required for businesses with more than 500 employees.
Instead, the hourly minimum wage paid by any small business "shall be increased annually on a percentage basis to reflect the rate of inflation calculated to the nearest cent on Jan. 1 of each year thereafter."
"I am trying to sound the alarm about the financial cliff that's going to happen Jan. 1. That's just the reality. That's Economics 101. That's what I'm trying to avoid," Hollingsworth said.
A 2015 Seattle law allows small businesses to credit tips and benefits toward the minimum wage. Most small businesses pay $17.25 an hour, while large businesses pay $19.97. The credit for tips and benefits expires next Jan. 1. Hollingsworth's proposal eliminates that expiration date and makes the credit permanent. It keeps in place the two-tiered wage system.
"The idea was to propose something that would continue the status quo that we have, not new legislation, so everyone could come to the table to figure out how we factor it in a little bit better so businesses can absorb it, we can save jobs, and continue those services that we have," Hollingsworth said.
Small business owners painted a stark future if they're forced to increase their minimum wage by $3 or more.
"Thank you, Joy Hollingswoth, for introducing this legislation because we understand that this is actually about saving jobs. It's needed and it's needed fast. I'm just going to speak from my heart. This is my reality," Destiny Sund, who owns a bakery in Pike Place Market, said. "I employ six people and I do take the tip credit. My employees are amazing. I wish I could pay them all $100 an hour. I'm doing my best right now to save my bakery. I'm still paying off my emergency SBA loan. I've almost exhausted my pandemic government money. I lost over $16,000 last quarter. The truth is Pike Place vendors are struggling. $3 an hour, in addition to the current minimum wage, is not sustainable for my business. I've raised my prices as high as my customers are willing to tolerate."
"When I hear the complaints about how we've had 10 years to get ready for this, what nobody could have anticipated was a global pandemic, followed by a shutdown, followed by the largest inflation spike our country has seen in 50 years," Charlie Anthe, who owns a sushi restaurant in Ballard, said.
Workers criticized the proposed legislation and its sponsor. They heavily outweighed those supporting the legislation.
"The whole idea of a minimum wage is that it's a minimum. It's the floor that we set and we know that in Seattle, those who earn the minimum wage struggle to meet their basic needs," Charlie Lapham, with MLK Labor, said. "Businesses agreed to the minimum wage 10 years ago and they've had time to prepare but instead of paying people for what they're worth, they're making this change in the eleventh hour. Creating a permanent sub-minimum wage would be a deep mistake and harm workers all across Seattle."
"Councilmember Hollingsworth represents my district and I am ashamed that she's introduced legislation blatantly attacking thousands of our city's most vulnerable workers. Many of them are women, immigrants, and people of color. Her district is an epicenter of displacement in Seattle, with people constantly being pushed out of their homes due to ever-increasing rents. She is making it clear who she stands with: Seattle's business establishment instead of renters in her district," Patrick Gibson with Workers Strike Back said. "This all-Democrat City Council is attempting to permanently freeze a lower-tiered minimum wage for thousands of workers."
Despite the pushback, Hollingsworth is adamant: her legislation is meant to help small businesses and their workers.
"Ideally, we're just trying to find a solution that could road this out, so small businesses can absorb this, continue to pay workers the minimum wage and also still survive," she said.
Hollingsworth said the legislation will be introduced Aug. 12. The council will have around two months to hear arguments for and against it before voting on it.