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Originally published May 3, 2014 at 8:11 PM | Page modified May 3, 2014 at 9:46 PM

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How the $15 wage deal came together in Seattle

To reach a historic agreement on raising the city’s minimum wage, business and labor had to compromise on big issues. Seattle Mayor Ed Murray threatened to introduce his own proposal that was less business-friendly. Here’s a behind-the-scenes look at how the deal came together.


Seattle Times staff reporter

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With his Income Inequality Committee failing to reach a decision at its final scheduled meeting April 23, and business and labor representatives still at odds over core issues on a deal for a $15 minimum wage, Seattle Mayor Ed Murray gathered the business members of the committee the following day.

Unless they reached an agreement with labor, he told them, he would announce a plan worse for them — and more closely resembling Socialist City Councilmember Kshama Sawant’s pro-worker initiative.

But Murray didn’t announce his own proposal April 24. He stood before a room packed with local and national media and said while there was broad agreement, there were unresolved issues.

One week later, Murray returned to the same conference room in City Hall to announce a historic agreement between business and labor to raise the city’s minimum wage to $15 an hour over five to seven years.

The negotiated deal calls for a three- to seven-year phase-in, with large businesses — those with at least 500 workers — required to reach the $15 wage first.

And while there were relief and congratulations among those meeting since January, no one, it seemed, was completely happy.

Labor had agreed to let business count tips and health-care benefits toward a minimum wage. Business agreed to phase out those credits.

Some definitions, such as whether total employees or full-time equivalents would determine the size of a business, were left for the City Council to resolve when it considers a wage ordinance over the next few weeks.

Committee co-chair Howard Wright, CEO of Seattle Hospitality Group, said he regretted that signature Seattle employers with generous benefit packages such as Starbucks and REI would get only a four-year phase-in while small businesses that offered benefits or tips would get seven years.

And some business leaders would complain that they’d been strong-armed by the mayor.

“The mayor’s plan was presented to us in a very stern way,” said Craig Dawson, CEO of Retail Lockbox. “They said ‘come to our side of the thinking, or else.’  ”

Members at impasse

On April 14, with a little over two weeks left to reach a deal, members were at impasse, said David Rolf, president of SEIU 775 and committee co-chair.

Labor was unwilling to accept a deal that gave businesses credit for tips and health-care benefits, because of concerns it would undermine the state’s definition of the minimum wage that counts salary and nothing else.

Business was equally adamant that companies that provided those benefits should be treated differently.

Rolf said the breakthrough came when one committee member drew an ascending line on a white board with a second ascending line above it. The lower was the minimum wage rising toward $15 an hour.

The top line was the higher, verifiable amount employees would receive in addition to the minimum wage. On the white board, the line rose for several years and then over several more years, phased out.

Businesses with employee benefits would get more time to meet the rising minimum wage. But the plan wouldn’t subtract the benefits from workers’ base salaries, a key principle of labor.

“It was the go-home concept and we immediately recognized it,” said Rolf, an experienced union negotiator who came to the committee with a reputation for strategic thinking and coalition-building. “I saw it in the body language on my side. People started going for their phones. I thought, ‘This is the concept that gets us there.’  ”

Plan wins backing

The compromise plan had the support of 21 of the committee’s 24 members who represented business, labor, nonprofit and community groups.

Between the failed agreement and the final deal was another week of tense negotiations that included passionate appeals on behalf of immigrant and minority-owned small businesses; defenses of low-wage workers; and pressure by a politically savvy mayor who’d made delivering a $15 minimum wage a top priority.

“Ed knew when to insert himself and when to back away,” said David Freiboth, executive secretary of the King County Labor Council .

A core group of seven, which staff dubbed “The G-8” to reflect their influence and powerful constituencies, met throughout the first Saturday of spring, and five hours on Easter Sunday.

The group included Wright; Maud Daudon, CEO of the Seattle Metropolitan Chamber of Commerce; David Watkins, president of the Seattle Hotel Association; and Bob Donegan, president of Ivar’s.

Labor representatives included Rolf, Freiboth and Sarah Cherin, political and policy director for the UFCW Local 21.

Participants said Murray played a crucial role at several junctures. When committee members early on wanted to talk about issues besides low pay that made Seattle unaffordable, Murray told them their charge was to raise the minimum wage.

When labor agreed to the total-compensation proposal, Murray pressed businesses to take the same risk, and compromise on the remaining issues.

He also showed the temper for which he was sometimes known in Olympia.

Wright joked that members were exchanging texts to the effect of, “ ‘Did he yell at you today?’ with the response, “No, my day must be tomorrow.’ ”

Cherin said Murray’s years as a legislator showed in his efforts to pressure committee members to compromise.

“The mayor was adamant about getting workers to $15. He brings intensity and passion to issues he cares about,” she said.

Murray’s office declined to be interviewed for this story, saying it was premature to discuss the committee’s deliberations before the City Council deliberated.

Outside forces

In addition to tensions between business and labor, there were outside forces at work on committee members. Sawant regularly denounced the views offered by business.

She announced early the intention of her group, 15 Now, to take an initiative to the November ballot to raise the minimum wage to $15 an hour on January 1, 2015 — for all businesses.

By late March, she had moderated, proposing a three-year phase-in for businesses smaller than 250 workers and no credit for tips or health-care benefits.

And while labor appreciated the pressure from the left, they were frustrated that she seemed to be negotiating with herself.

“They’d talk to us about their next move, we’d tell them it was too early and they’d do it anyway,” Freiboth said.

Once the phase-in and phaseout concept for total compensation was reached, Murray’s staff produced a rough chart to show how employers with more than 500 workers would get to $15 in three years, while those providing health-care benefits would get four.

The fight was tougher over phasing in small businesses, Cherin said. “We wanted to make sure we were supporting the most beloved small businesses.”

The G-8 agreed on a five-year phase-in for businesses that did not provide health care or tips and seven years for those that did.

But the plan created an unintended consequence: by the time small businesses with benefits reached $15 in 2021, all other businesses would be paying $16.49 an hour, the inflation-adjusted rate.

After negotiating to keep pay increases for small businesses to what committee members said was a manageable 50 cents a year, they were suddenly facing a jump of $1.50 an hour to catch up.

Labor proposed allowing small businesses two years to catch up. Business pressed for four. Labor conceded the point.

When agreement was reached at 4 p.m. on the last day of April, labor and business called their allies on the committee to fill in the details of the final deal.

The mayor’s staff called everyone to confirm their approval.

On May 1, International Workers Day, Murray stood for a second time before a crush of cameras and reporters to announce that business and labor had joined forces to endorse a historic plan to raise the minimum wage over seven years.

Lynn Thompson: lthompson@seattletimes.com or 206-464-8305 On Twitter @lthompsontimes



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