Washington state sets new minimum wage for next year

Washington’s minimum wage will rise to $14.49 next year, up nearly 6% from the current $13.69, in part to reflect the rising costs of consumer needs like gasoline, housing, household furnishings and food.

The 5.83% increase, announced Thursday by the state Department of Labor and Industries, comes as Washington confronts an economy beset by pandemic, labor shortages and supply chain problems that have led to higher wages and living costs.

Under state law, the department sets the minimum wage for the coming year using a consumer price index for urban wage earners and clerical workers provided by the U.S. Bureau of Labor Statistics.

That index, updated Sept. 14, found that prices paid by urban workers in August were up around 5.8% nationally and 5.3% in the Seattle area. August prices in the Seattle area were 1.1% higher than they’d been in June, compared with a 0.7% increase nationally.

Data was not immediately available from the state on the percentage of workers in Washington who currently earn the minimum wage. In 2017, around 14,000 workers in Washington, or 0.8% of the workforce, earned the minimum wage or less, according to a BLS report.

In 2017, roughly two-thirds of those earning the minimum wage or less worked in service jobs, primarily as kitchen employees and servers, and half were 25 or younger, BLS data showed.

In 2016, Washington voters approved Initiative 1433, which set a statewide minimum wage at $11 for 2017 and then raised it to $11.50 in 2018, $12 in 2019, and $13.50 in 2020.

State law allows cities to set higher minimum wages. In Seattle, the minimum for 2021 is $15 for employers that cover some medical benefits or whose workers earn $1.69 in tips, and $16.69 for others. The city of SeaTac has a minimum wage of $16.57.

Labor shortages across Washington have forced employers to raise wages and offer other incentives. Warehouse operators are offering signing bonuses of $2,000 to $3,000, and fast food chains are paying starting hourly wages well above required minimums, including $19 at Dick’s Drive-in and $20 at some Taco Time locations.

The minimum wage for workers 14 and 15 years old, which is pegged at 85% of the adult minimum, will rise to $11.64.