SEATTLE — Seattle Mayor Ed Murray on Thursday proposed a phased-in increase of the city's minimum wage to $15 an hour over the next seven years — a compromise endorsed by both business and labor.
Under the mayor's plan, businesses with more than 500 employees nationally will have at least three years to phase in the increase. Those providing health insurance will have four years to complete the move.
Smaller organizations will be given seven years, with the new wage including a consideration for tips and health care costs over the first five years.
Fewer than 1 percent of the businesses in Seattle have more than 500 workers, according to a study for the city by the University of Washington. Those businesses have a total of about 30,000 employees, representing about a third of those earning under $15 an hour in Seattle.
The mayor said 21 of 24 members of his minimum wage task force, which included representatives of business, labor and community groups, voted in favor of the plan.
"I think that this is an historic moment for the city of Seattle," he said. "We're going to decrease the poverty rate."
Howard Wright, CEO of the Seattle Hospitality Group and a co-chairman of the task force, said he thought the plan would have support from the business community.
"While I know not everyone in the employer community will be satisfied, I believe it is the best outcome given the political environment," he said.
Business leaders pushed for the phase-in and wage credits for tips and health care benefits. A group gathering signatures for a competing $15 minimum wage initiative it wants on the November ballot has opposed the phase-in for larger businesses.
Led by socialist City Council member Kshama Sawant, the group known as 15 Now wanted to see an immediate wage hike for large businesses and a three-year phase-in for organizations with fewer than 250 full-time employees.
Many give Sawant credit for starting the conversation about raising the minimum wage and for heating up the discussion after her surprise victory in November. Murray also made the issue part of his campaign for the mayor's office.
The plan now goes to the City Council for discussion. Council member Nick Licata, a member of the task force, said he would work to get the proposal approved with minimal tinkering.
Washington state already has the nation's highest minimum wage at $9.32 an hour. According to a chart prepared by the mayor's office, many Seattle workers will reach $11 an hour by 2015. The state's minimum wage is scheduled to be $9.54 at that time.
Large businesses will reach $15 an hour in 2017 if they don't offer tips or health insurance. If they do, they will reach that pay threshold in 2018. Smaller businesses will have until 2019 to reach $15 an hour if they do not have health insurance or tips, or until 2021 if they do.
Once the $15 wage is reached, future increases will be tied to the consumer price index.
Murray called the plan a compromise and dismissed concerns that he would face opposition at the city's May Day events, which include a "15 Now" theme.
"I wanted 15, but I wanted to do 15 smart," he said.
Labor leaders congratulated the mayor for starting a national conversation.
"Raising Seattle's minimum wage to $15 reaches far beyond the 100,000 workers who will benefit with the city limits," said David Rolf, president of SEIU 775 and co-chair of the task force. "Today, Seattle workers send a clarion call to all working people in America."