Marilyn Watkins: Expert declaration on the minimum wage

Testimony | December 29, 2010 | By Marilyn Watkins

Executive Summary

Prior to the passage of I-688, the minimum wage for Washington workers  could only be raised by an act of the legislature or an initiative amending the Washington  minimum wage statute, or if Congress established a higher minimum wage. As a result, the minimum wage often went years between increases, during which periods, inflation would  erode the spending power of minimum wage employees. For example, the state minimum  wage remained at $2.30 between 1976 and 1988. The federal minimum wage increased in  steps early in that period, to $3.35 in 1981, superseding Washington’s minimum wage.  However, those increases were below the rate of inflation. Therefore, the value of the minimum wage fell steadily from 1978 through 1988, from $8.64 per hour to $6.12 per  hour in 2010 dollars (calculated using CPI-W). At the time of I-688’s passage,  Washington’s minimum wage had just experienced another loss of value, remaining at $4.90  from January 1994 until a federal minimum wage increase to $5.15 in September 1997.  Initiative 688 responded to this problem. It raised the state minimum wage in two  increments, to $5.70 in 1999 and $6.50 in 2000, then mandated automatic cost-of-living  adjustments beginning in 2001.

Despite the increases mandated by I-688, Washington’s current minimum  wage is still well below the level of the late 1960s. In 1968, the state minimum wage was  $1.60 per hour. In 2010 dollars, that would be equal to either $9.77 or $10.02, depending on  whether one measures inflation using the CPI-W or CPI-U. Therefore, even with an  increase of 12 cents, to $8.67 per hour, minimum wage workers would still be earning at  least $1.10 less per hour in current dollar terms than their counterparts in 1968.


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