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How Washington’s new minimum wage will impact the economy

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On Jan. 1, Washington will have the highest minimum wage in the nation.

ANACORTES, Wash. — On Jan. 1, Washington’s minimum wage will jump to $15.74 an hour.

The $1.25 increase makes it the highest in the nation. 

Waitress Kaisha Paul works to support her family of three at Anacortes’ Rockfish Grill. She’s grateful for her pending pay raise but knows it won’t go too far.

“I feel like every time our pay goes up the cost of living goes up even more,” she said.

Labor makes up 50% of the costs at the beloved brewpub. Now those costs, and many more, are increasing making for a tough balancing act for businesses.

Rockfish Grill owner Allen Rhoades said the pay hike and rising food costs are just two of the factors determining how he’ll run the business next year.

“We’re asking ourselves what we can change, what we can pare down,” he said. “We just got notice from Washington State that L&I rates are going up, unemployment rates are going up, and we don’t want to touch the benefits we provide to our employees.”

Voters approved the statewide minimum wage hike in 2016. It has steadily risen every year since, from $9.47 an hour to now nearly $16.

While the increase will take a bite out of profits, just how much of an impact it will have on the local economy remains unclear.

Hart Hodges, co-director of the Center for Economic and Business Research at Western Washington University doesn’t expect it to be severe. He says the tight labor market has already forced many small businesses to pay above minimum wage.

“We had the push for $15 an hour pre-COVID, so a lot of the adjustment has already happened,” said Hodges. “This particular increase in the minimum wage is just not going to have that big of an effect.”

As one of the estimated 100,000 minimum wage workers in Washington, Kaisha just keeps smiling.

She remains hopeful, despite inflation, a potential recession and another uncertain new year ahead.

“I try to stay optimistic, as much as I can be,” she said, “but I have a son going into college soon, and I can’t help but worry about that.”

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Originally Appeared Here

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