Economic Impacts of SeaTac Living Wage

September 2013 - On July 23rd, the SeaTac City Council placed a citizen-initiated proposition on the November 5th, 2013 ballot titled an “Ordinance Setting Minimum Employment Standards for Hospitality and Transportation Industry Employers.”

Referred to now as Proposition 1, the initiative establishes minimum employment standards for a variety of travel-related industries operating in SeaTac. For jobs covered by Proposition 1, these standards include a $15 hourly wage, up to five days of paid sick leave and prevention of “tip theft.”

Proposition 1 will have a significant, positive effect on household income and jobs in the region and will provide direct benefits to the residents of the city of SeaTac. In contrast, increased wage costs will represent a marginal proportion of consumer spending on travel-related services covered by the initiative. The majority of business revenue that will pay for the living wage requirements will likely come from visitors to the Seattle region, creating a net benefit to the local economy. Key findings of the report include:

• Over six thousand workers will receive an average wage increase of $3.97, or about a 36 percent boost.
• Covered workers would see earnings rise from an average of $17,700 to $24,000 per year. Workers will spend their increased earnings at local businesses, restaurants and stores.
• 15-­‐20 percent of this household income boost will be received by SeaTac residents, resulting in increased revenues for small businesses and the City.
• Wage increases under Proposition 1 could be absorbed by marginal price increases between .5% and 1.5 percent for the customers of covered businesses.
• The majority (68 percent) of revenues enjoyed by covered employers come from visitors to the region, resulting in a net economic gain.