Working Well in Washington: An Evaluation of the 1998 Minimum Wage Initiative

In November of 1998 Washingtonians voted overwhelmingly in favor of increasing  Washington’s minimum wage from $4.90 per hour to $6.50 per hour over a two-year period.  The law also requires annual cost-of-living adjustments (COLAs) every year thereafter. In  January 2003, Washington’s minimum wage is scheduled to increase by 1.6% to $7.01 per  hour.

In effect for four years and through times of economic growth and decline, the minimum wage  law has had a significant impact on the income of the state’s lowest-paid workers and has had  no significant impact on job or business growth. Research on Washington’s 1998 minimum  wage initiative shows these results:

  • A full-time worker making the minimum wage makes $3,868 more today than in 1998.  However, Washington’s minimum wage still remains 16% below the level achieved in  1968 when the minimum wage in Washington was at an inflation-adjusted $8.14  per hour.
  • Significant job losses have not occurred as a result of raising the minimum wage.  Recent increases in the state unemployment rate are the result of a national economic  recession that has disproportionately affected the regional pacific northwest economy.
  • There has been little difference in inflationary trends between Washington and other  western states, where the minimum wage has remained constant. This suggests that  Washington’s minimum wage has had little effect on price levels.

Most minimum wage workers are adults over the age of 20 who support themselves and their  families. Washington’s minimum wage law has helped these individuals keep pace with  inflation instead of experiencing a loss of earning power as they did between 1976 and 1988.  In addition, employment in the predominately low-paying restaurant industry increased by  3.6% between 1997 and 2001.

For agricultural workers the minimum wage provides an important wage floor, but even with  this protection agricultural workers earn an average income of only $8,803 annually and experience among the lowest living standards in the state. Since 1998, wage growth among  agricultural workers trails far behind increases in the minimum wage. Meanwhile, the total  value of agriculture products in Washington has increased steadily since 1998.

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Posted in A Fair Deal at Work, Minimum Wage