Starting on January 1, 2023, the minimum wage in Washington state will increase to $15.74 per hour for workers aged 16 and older.
This increase, which is nearly 9%, will make Washington’s minimum wage the highest in the country, even surpassing California’s planned increase to $15.50 per hour.
The increase in Washington’s minimum wage is due to inflation, as consumer prices in the Seattle area have increased by 9% in the past year, surpassing the national inflation rate of 8.3%, according to the Bureau of Labor Statistics.
While a minimum wage increase may seem like a way to improve incomes and lift workers out of poverty, it can actually have negative effects on young workers. A higher minimum wage can reduce employment opportunities and create unemployment, as employers may be less likely to hire teens who typically fill lower-paid positions. A 2014 study found that a 10% increase in the minimum wage can lead to a reduction in youth employment of up to 7% in a particular region.
Young people may also miss out on on-the-job training opportunities that could lead to higher wages later on, as employers may not be able to afford to pay as many lower-wage workers. When they are unable to find jobs, these young people may need to rely on their families or the social welfare system for support. This can lead to a delay in their entry into the labor market and lower lifetime income for young, unskilled workers.
It is worth noting that nearly half of all minimum wage earners are teenagers or young people still living with their parents. A minimum wage hike means that young people may be priced out of the opportunity to work. This is especially concerning as Washington’s unemployment rate has recently increased from 3.8% to 4%.
In some cases, automatic minimum wage increases may not take into account the specific economic conditions of a particular region or industry. For example, if the minimum wage is increased in a region that is experiencing an economic downturn or high unemployment, it may have a greater impact on employment opportunities for young and unskilled workers.
In Washington state, the minimum wage is determined by the Washington State Department of Labor and Industries (L&I), which is a state agency. While the state legislature and the Governor do have some oversight over the L&I, there is generally no direct voter representation in the decision to increase the minimum wage based on the Consumer Price Index (CPI). This means that young people and other affected groups may not have a direct say in a matter that affects them.
