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Originally published September 25, 2013 at 5:02 PM | Page modified September 26, 2013 at 6:46 PM

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Study says SeaTac’s Prop 1 would boost economy by $54M

A $15-an-hour minimum wage for hospitality and transportation workers in SeaTac would help the local economy, according to a just-released study, but a business group says it would lead to job cuts.

Seattle Times business reporter

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A "union" report is supposed to be believable. Really? If Wal-Mart or... MORE
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A $15-an-hour minimum wage for SeaTac’s hospitality and transportation workers would boost not only paychecks, but also the local economy, according to a just-released study.

Whether or not voters believe in the broader benefits could determine the fate of the Nov. 5 ballot initiative.

Puget Sound Sage, a nonprofit community and labor organization, estimated in a 32-page report released Wednesday that total annual wages for affected workers would increase by $40 million. With more spending money, those workers in turn would create at least 400 new jobs and $14 million in additional income for the region, the group said.

“Opponents say it wouldn’t benefit SeaTac economically, but at a minimum, between 15 and 20 percent of the people who work at the airport also live in SeaTac,” said co-author Nicole Vallestero Keenan, a policy analyst at Puget Sound Sage. “On top of that, there’s a number of local businesses in SeaTac that cater to airport workers. They’re very likely to see a boost.”

SeaTac’s Proposition 1 calls for a $15-an-hour “living wage” for an estimated 6,300 workers at Sea-Tac International Airport and its nearby hotels, car-rental agencies and parking lots. That represents a 63 percent pay raise over Washington state’s current minimum wage of $9.19 an hour.

The biggest beneficiaries would be employees of airport contractors, who now make an average of $9.95 an hour, according to the report. Employees of rental car companies would see the smallest increase, $1.94, or 15 percent above their current average hourly wage.

The Washington Research Council, a business-backed research organization critical of the measure, counters that it would cause employers to cut jobs by 5 percent and to replace many young, inexperienced workers with more-experienced and better-educated employees.

Council president Richard Davis said the magnitude of the proposed increase also would force affected employers to change how they do business. Restaurants in hotels, for example, could switch from full-service to buffet dining, and parking lots could swap cashiers for credit-card machines.

“The employees fortunate enough to retain their jobs will make more money, but that will come at the expense of workers who lose their jobs,” he said.

Davis also noted that Puget Sound Sage’s total estimated impact of $54 million is less than 0.02 percent of the regional economy — a “negligible” number, he said.

The group figures higher wage costs could be covered with small price increases of between 0.5 and 1.5 percent at affected businesses, paid for mostly by out-of-town visitors.

Smaller businesses would be exempt: hotels with fewer than 100 rooms or merchants in the airport with fewer than 10 employees.

Don Liberty, who has owned the Bull Pen Pub in SeaTac for 33 years, appeared this week in a cable TV ad by Yes! for SeaTac, a union-backed political committee supporting Proposition 1. Liberty said his cooks and bartenders, who are not covered by the proposal, make $12 to $16 an hour, plus tips.

He said a pay increase for airport workers would be good for his business.

“I think they’ll have a little more money to spend,” he said. “They don’t have it now.”

Amy Martinez: 206-464-2923 or amartinez@seattletimes.com. On Twitter: @amyemartinez

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