The Negative Effects of Initiative 1433’s Wage and Paid Leave Mandates on Washington Agriculture
In November Washington voters will consider Initiative 1433, to raise the mandatory state minimum wage to $13.50 by 2020 and, for the first time, require all employers to give up to one hour of paid sick leave for every 40 hours worked, starting in 2018. Future minimum wage increases would be imposed automatically each year, based on the Seattle-area inflation rate. The state minimum wage is already indexed to inflation, and is scheduled to increase on January 1st under current law.
The incorporation of a higher minimum wage would increase Washington’s total farm labor costs to $2.4 billion. Based on the 2012 Census of Agriculture this would raise total in-state labor expense as a portion of agriculture product sales to 26.3 percent, ranking Washington as eighth in the nation for total labor as a percentage of sales and first in the nation for total labor cost. The labor cost increase proposed by Initiative 1433 would make Washington agriculture less competitive on a global market and would increase the negative economic forces that tend to force agricultural businesses to move out of the state or go out of business.
Ultimately, instead of improving lives of low-income families, in many cases a high-mandated minimum wage hurts low-skill and entry level workers by reducing job opportunities. Furthermore, minimum wage increases reduce the competitiveness of Washington’s crops.