State job growth continues, but at a snail's pace



Washington State added 3,600 jobs in June from the month before reflecting 10 consecutive months of job growth, according to  the Washington State Employment Security Division. The new numbers include a revision to last month’s report to show that the state had added 2,500 jobs in May, instead of the originally reported loss of 700 jobs.

The private sector was the biggest contributor to job growth, adding 6,600 jobs in May, including 3,700 jobs in “other services” (includes things like equipment repair, pet care and parking services); 1,300 in manufacturing (mostly aerospace); 1,300 in transportation, warehousing and utilities; 1,200 in professional and business services; and 1,200 in wholesale trade. The private sector added a total of 57,800 jobs in the 12 months ended June 30.

Even so, unemployment in June rose to 9.2 percent, from  9.1 percent in May. In the Seattle/Bellevue/Everett area, unemployment rose to 8.8 percent in June, from 8.7 percent the month before.

Dave Wallace, the acting chief economist at the Washington State Employment Security Division, said the state would have to add 3,600 jobs each month for a full year to decrease unemployment by one percentage point.  

One problem is job losses in the government sector where employment fell by 3,000. For the full year, the sector lost 15,000 jobs. Also showing declines were construction, down 1,800; financial activities, down 1,100; and education, down 1,000.

Despite the weak performance, some experts see improvement ahead. A net 11 percent of Washington executives plan to add full-time staff in the third quarter, and 98 percent of Washington executives surveyed are confident in their companies’ growth prospects, according to the Robert Half Professional Employment Report.








Paying the Price for $15 an Hour

Paying the Price for $15 an Hour

With the economy soaring, it’s hard to gauge the effectiveness of Seattle’s minimum-wage hike. Some small-business owners remain dubious.
When the Seattle City Council passed the $15 minimum- wage ordinance in June 2014, David Lee, founder and CEO of the Field Roast Grain Meat Company, was not happy.
“The minimum wage hurts businesses like ours that compete on a national level,” says Lee, who believes it makes employers feel “cheap” and weakens “the goodwill that bound employers to employees.”
Even so, reflecting the mixed feelings of many Seattle businesses that want to do the right thing even as they struggle to survive, Lee decided to raise the minimum pay of his workers more than 20 percent — to $15 an hour — this fall, years before he was required to do so under the law.
“I wanted to get it behind me,” he explains.
Under a complex, multitiered system, Seattle companies with more than 500 employees must begin paying a $15-per-hour minimum wage starting in January. Companies with fewer than 501 employees  have until 2019, unless, like Lee, they provide health care or other benefits, in which case the $15 minimum wage rule applies to them beginning in 2021. Lee says his decision will cost Field Roast $300,000, about a quarter of its total earnings in 2015.
Ivar’s Seafood increased prices by 21 percent in 2015 to cover an increase in employees’ minimum wages to $15. The company didn’t have to start paying $15 an hour until next year, but Ivar’s President Bob Donegan believed it was the right thing to do. The decision helped resolve long-standing tension between lower-paid workers in the kitchen and wait staff who received much higher wages thanks to tips. Donegan says most patrons continue to tip even when they are told gratuities are now included in their bills.

A CASE OF COMPRESSION: Lynn Stacy unwraps grain meat for sausage products at Field Roast,
which has a flatter pay structure because of its higher minimum wage.

Some companies, however, remain concerned that the higher minimum wage could still hurt them. BrightStar Care, which offers home care and medical staffing in most states, is operating at a disadvantage because of the minimum wage, says CEO Shelly Sun. “Our Seattle franchise has only about 50 employees,” Sun notes, “but it’s being treated like a big business.”
Because Seattle treats the franchised operation of a national chain as if it were a large business, BrightStar will have to pay $15 an hour as of January, whereas some of its competitors with similar employee numbers in Seattle may not have to pay that much until 2019. Sun says a consequence may be reducing the size of the Seattle franchisee’s staff, which could have implications for clients.
Meanwhile, the national restaurant chain Buffalo Wild Wings says it is hesitant to expand in Seattle because the high minimum wage makes it economically inefficient to hire and train inexperienced workers. Still, what was once considered a movement isolated to “liberal” western cities like Seattle and San Francisco has gained sufficient momentum nationwide to be included in the national platform of the Democratic Party this election season. 
Thanks to Seattle’s strong labor market — the unemployment rate in the Seattle metropolitan area was 4.4 percent in July (compared to 5.8 percent statewide) — the higher wages have had little negative effect on the economy.
A report released in July by the University of Washington’s Evans School of Public Policy and Governance concluded that the new minimum wage law hasn’t had a lot of upside, either. Since a strong labor market would have increased wages in any case, the study concluded, only a quarter of the recent gains could actually be attributed to the minimum-wage law — a little more than a few dollars a week. 

Revisiting the minimum-wage story | Seattle Business magazine examined the minimum-wage issue in its May 2014 issue, just as the Seattle City Council was considering an ordinance raising the minimum hourly rate to $15 in a gradual process over several years, depending on a company’s size. This is the magazine’s first follow-up since passage of the minimum-wage law.