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Franchise Owners Upset About Seattle's Minimum Wage Laws

Seattle's new minimum wage of $15 per hour is more than twice the current federal minimum wage of $7.25. Some say businesses will suffer and employers will be unable to hire workers. Franchise owners in Seattle have an additional gripe: many are claiming that franchises are unfairly grouped under the umbrella of large businesses.

Seattle

(Photo Credit: papalars/Flickr)

Robert Reich thinks Seattle is doing the right thing by raising the minimum wage up to $15. He explains that the city is phasing in the new wage over a period of years, and different businesses have more or less time to start paying $15 per hour. Seattle is "raising its minimum from $9.32 (Washington State’s current statewide minimum) to $15 incrementally over several years. Large employers (with over 500 workers) that don’t offer employer-sponsored health insurance have three years to comply; those that offer health insurance have four; smaller employers, up to seven."

Forbes reports that franchise owners in Seattle are upset about what they consider discrimination in the new laws. Franchises are considered a part of major corporations in Seattle's minimum wage laws; therefore, franchise owners do not have up to seven years to incrementally raise their wages up to $15 per hour, but small businesses do. 

In an open letter to Mayor Murray and the Seattle City Council, Stephen J. Caldeira of the International Franchise Association (IFA) explains that franchise owners each own their individual store. Independently-owned franchise businesses may each have a limited number of employees. The IFA believes that the new laws are unfair to franchise owners, and as a result of the push to start paying $15 per hour sooner than small businesses, franchise owners may end up going out of business. The IFA has filed a lawsuit. 

The specific issue the IFA is complaining about is their perception of unfair treatment. There is a difference of three or four years between when they must pay as much as $15 per hour, and when small businesses must do so. In addition to the fear that having to pay a higher wage will result an employer's inability to hire enough workers to run the store, they think it's unfair that small businesses will be able to pay less.

However, as Robert Reich points out, those seeking work tend to prefer higher paying jobs. And a $15 minimum attracts into the labor force those who might not have been interested in working for $8-10. Employers now have more potential employees to choose from, and will have a more reliable and stable staff that will save them money in the long run. By this logic, more people will want to work for franchises in order to receive higher pay. 

Higher pay puts more money in the pockets of the labor force. With more money in the pockets of laborers, more money will get pumped back into the economy, keeping businesses in the black. 

Tell Us What You Think

Do you think franchise owners should be treated as small businesses? What's a fair minimum wage? We want to hear from you! Leave a comment or join the discussion on Twitter.

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