Guest Commentary: Minimum wage increase comes with unintended consequences
~January 30th, 2020
At Ability Employment Services, we have the good fortune of working for individuals with disabilities and low-income folks seeking vocational rehabilitation. It is rewarding but challenging work, and we are always up to the task.
As many of you already know, starting in January, minimum wage increased in Washington state. Such increases are often reported on with great fanfare about how it is a win for the Washington worker, or we hear from local businesses about how it will impact them, but who we often don’t hear from are those workers that it is intended to help. These are the folks that Ability works with every single day; we are the boots on the ground assisting these individuals to gain and maintain employment. So, what I am about to share doesn’t often line up the talking points we hear.
As of this writing, we already have been informed of one position layoff and one reduction in hours of two of the clients we serve.
While I have no doubt that the lawmakers who are in support of such legislation have the best intentions to try and give workers a hand up, the reality is these are just some of the unintended consequences of such laws and do not match the intended outcomes.
I have a unique perspective with which I provide this feedback because not only do I assist others to realize their employment goals as my vocation, I am also the owner of this small business. I can tell you that we haven’t received a pay increase for the services we provide but have just had a mandated increase in the cost of doing business. Couple this with the recent implementation of the Paid Family Medical Leave in Washington, and now you might get a better understanding of the challenges that businesses face in this state.
We pay very close attention to those types of legislative actions because it is our business to know how this potentially could impact our currently employed clients, as well as the greater challenge of attaining employment for our unemployed clients. The real impact, in my experience, usually hurts those it was intended to help by the elimination of positions, reductions in hours, or even a reduction in other company benefits.
When this legislation was enacted a few years ago, I was not in favor of it because our clients are always the first that are affected when times get tight for the local businesses with which we partner. I could see the potential negative impacts to the people we serve.
Annually, I have conducted my own informal survey of businesses (as a consumer of goods and services) and have found that 100% of them raised prices to compensate for the wage increase. So, what this really does for the minimum wage worker is a net zero in purchasing power because the price of everything goes up anyway.
Ultimately, though, it hurts them more because of the job losses or reduction in hours scheduled.
Ty Lingo is director of Ability Employment Services, in Spokane.