$15 Now?! Combat and Collaboration in Seattle’s Historic Minimum Wage Debate (A)


Seattle mayor Ed Murray had formed an Income Inequality Advisory Committee, a group of two dozen diverse stakeholders across the city, for the purpose of negotiating a deal to raise the minimum wage to $15 dollars an hour. Though he came close to finalizing a deal, it fell apart the night before a press conference was scheduled to announce a victory. Mayor Murray needed to balance the goals of each interest group on his committee to salvage a deal on the minimum wage.

This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2023 Sage Publications, Inc. All Rights Reserved

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Exhibit 1: Income Inequality Advisory Committee

Mayor Murray’s Income Inequality Advisory Committee ultimately had 24 members, organized here by where they generally stood on the politics of $15. The affiliations below were not strict, as no part of the group was a monolith that agreed on every issue.

*Members of the “G-8” have an asterisk (see Exhibit 3 for expanded G-8 profiles)

Aligned with Labor




*Co-Chair David Rolf


Service Employees International Union (SEIU) 775

*Sarah Cherin

Political & Policy Director

United Food & Commercial Workers (UFCW) 21

*David Freiboth

Executive Secretary

M.L. King County Labor Council

Kshama Sawant


Seattle City Council

Nick Licata


Seattle City Council

Diane Sosne


SEIU 1199

Nick Hanauer

Venture capitalist

Second Avenue Partners

Eric Liu


Citizen University

Pramila Jayapal


We Belong Together (Women for Common Sense Immigration Policies)

Nicole Keenan

Policy & Research Analyst

Puget Sound Sage

Aligned with Business




*Co-Chair Howard S. Wright III


Seattle Hospitality Group

*Maud Daudon

President & CEO

Seattle Metropolitan Chamber of Commerce

*Bob Donegan

President & CEO

Ivar’s & Kidd Valley Restaurants

*David Watkins


Seattle Hotel Association

Michael Wells

Executive Director

Capitol Hill Chamber of Commerce

Craig Dawson


Retail Lockbox

David Meinert


Various restaurants & talent management

Craig Schafer


Hotel Andra

Joe Fugere


Tutta Bella Neapolitan Pizzeria

Janet Ali

HR Supervisor

Nucor Steel

Ronald Wilkowski

Director of Business Development

Union Bank

Not necessarily aligned with either side




Bruce Harrell


Seattle City Council

Gordon McHenry

President & CEO

Solid Ground (nonprofit)

Audrey Haberman

Managing Partner

Philanthropy Northwest (nonprofit)

Exhibit 2: Research Study Results

The Income Inequality Advisory Committee (IIAC) commissioned two academic studies from research universities to assess the impact of higher minimum wages. Results were presented to the IIAC in March 2014.

University of Washington Study: Impact in Seattle

Researchers at the University of Washington’s Daniel J. Evans School of Public Policy and Governance were tasked with finding “who would be impacted by the $15 minimum wage in Seattle,” according to IIAC Co-Chair David Rolf. 1

Excerpts are reprinted below from the UW study’s Executive Summary, authored by Marieka M. Klawitter, Mark C. Long, and Robert D. Plotnick. 2

Worker Characteristics
  • About a third of Seattle residents earn less than $15 per hour, compared to only 19% of those who work in Seattle and live outside of the city
  • About 100,000 people working in Seattle earn less than $15 per hour.
  • 40% of those working in Seattle and earning minimum wage live outside the city.
  • Among the lowest wage Seattle residents, 55% work in the city—lower than for all workers (63%).
  • Low wages are more likely among workers with characteristics typically associated with low wages: younger workers, less education, being female or a racial/ethnic minority, poor, or receiving public assistance.
  • However, the majority of those earning low wages mirror the population: non-poor, some college education, white, and not receiving public assistance.
  • Family incomes are lowest for Seattle residents earning minimum wage (median of $16,853 per year) and highest for those earning over $18 per hour (median of $89,780); in between they are fairly flat with medians between $30,000 and $35,000.
  • The most common occupations for low-wage workers are: Food Preparation and Serving, Sales, Office and Administrative Support, Personal Care and Service, and Transportation and Material Moving.
  • The most common industries for low-wage workers are: Accommodations and Food Services, Retail Trade, Health Care and Social Assistance, and Educational Services.
Poverty and Work in Seattle
  • 13.6% of Seattle residents had income below the official poverty line in 2012.
  • Half of poor persons age 16 or older worked at least one week in the past year. They worked an average of 27 weeks per year.
Possible Changes in Poverty, Earnings, Basic Food, and Business Costs

We have made simple simulations of maximum possible changes in earnings, food stamp eligibility, poverty, and business payrolls. These estimates do not account for any possible adjustments in employment or businesses.

  • If there were no changes in the labor market (which is unlikely), typical employees earning the minimum wage of $9.32 and working 1,040 hours a year could see their annual earnings increase by up to $2,912 (30%) if the minimum wage increased to $12.12. Fully employed workers’ earnings could increase by $5,600.
  • With a minimum wage increase to $15.00, employees making the current minimum wage could increase their earnings by $5,907 (61%) if they worked the median (1,040) hours or $11,360 if they worked full-time all year.
  • For a family of three with median family income for $9.32 workers, food stamp benefits could drop from $348 dollars to $227 with a $12.12 minimum wage, and to $75 with a $15 wage. Drops would be less for workers working fewer hours and benefit levels are lower for smaller households.
  • An increase in the minimum wage to $15.00 per hour is simulated to reduce poverty from 13.6% to 9.4% if employment and hours did not change. Nearly three-quarters of this decline would be achieved by raising the minimum wage to $12.12 per hour, with the poverty rate falling from 13.6% to 10.6%.
  • Changes in payroll costs attributable to changes in the minimum wage depend on the number of workers earning less than the new minimum wage. In three hypothetical businesses, we found payroll costs could increase by 9 to 23% with a change to a $15 minimum wage. This would be higher if employers maintained pay ladders by increasing wages for other workers and lower if employers decreased work hours, hired more productive workers, or moved employment outside the city.
University of California, Berkeley Study: Impacts Elsewhere

While the Evans School researched impacts on Seattle, a team at the University of California, Berkeley’s Institute for Research on Labor and Employment did a survey of other municipalities, looking at “how existing laws are designed, what we know about the impacts of local wage mandates on workers and employment, and whether businesses move outside city or county borders in response,” according to Rolf. 3

Excerpts are reprinted below from the UC Berkeley study’s Executive Summary, authored by Michael Reich, Ken Jacobs, and Annette Bernhardt of the Institute for Research on Labor and Employment. 4

Existing Local Minimum Wage Laws
  • Nine localities in the United States currently have enacted minimum wage laws: Albuquerque, NM; Bernalillo County, NM; Montgomery County, MD; Prince George’s County, MD; San Francisco, CA; San Jose, CA; Santa Fe, NM; Santa Fe County, NM; and Washington DC. (Richmond, CA, just voted to raise its minimum wage to $12.30 an hour by 2017, and a final vote is pending to pass the law.)
  • Current mandated wage levels range from $8.50 in Bernalillo County to $10.74 an hour in San Francisco. (New wage mandates in Washington DC and Santa Fe, Montgomery, and Prince George’s Counties go into effect later this year.)
  • On average, the existing local minimum wage laws have mandated total wage increases of 41.4 percent, many of them in multiple steps and the majority indexed to inflation thereafter. Localities with larger increases have been more likely to implement them in several steps. Across the localities, the average per-step minimum wage increase is 16.7 percent.
  • The nine laws are similar in covering the large majority of work that is performed within the boundaries of their cities or counties. San Francisco delayed coverage of nonprofits and small businesses (less than 10 employees) for one year. Santa Fe initially exempted small businesses but later amended its law to cover all establishments.
  • Two of the nine laws (San Francisco and San Jose) follow their state’s law in treating tipped workers the same as non-tipped workers, maintaining a uniform minimum wage for both groups. The other seven laws follow their states’ laws in maintaining a lower minimum wage for tipped workers (even as some increased the base wage for tipped workers). Several of the laws make similar provisions for commissioned workers.
Effects of Minimum Wage Laws on Workers and Families
  • Researchers consistently find that minimum wage laws raise pay for workers at the bottom rungs of the labor market. These increases include both directly affected workers (those earning between the old and the new minimum wage) as well as those indirectly affected (those earning above, but near, the new minimum wage).
  • Raising the minimum wage also pushes up the wage floor relative to the median wage, thereby reducing pay inequality.
  • Researchers consistently find that the affected workers are largely adults and disproportionately women and people of color.
  • New research on the effect of minimum wage increases documents important reductions in family poverty rates and enrollments in public assistance programs, such as food stamps.
  • Researchers have not estimated the amount of economic stimulus actually created by the new spending power of low-wage workers after minimum wage increases. We do know that low-wage workers and their families are likely to spend a significant portion of those increased earnings.
Effects of Minimum Wage Laws on Businesses

Economists have increasingly recognized that raising the minimum wage does not automatically mean that employment will fall. Increased labor costs can be absorbed through a variety of other channels, including savings from reduced worker turnover and improved efficiency, higher prices, and lower profits. Modern economics therefore regards the employment effect of a minimum wage increase as a question that is not decided by theory, but by empirical testing.

  • Labor economists continue to debate the actual impacts of the minimum wage on employment and hours. We discuss in our assessment the most rigorous studies and offer a non-technical explanation of the nature of the disagreements in the research literature.
  • To date, three rigorous studies have examined the employment impacts of San Francisco’s and Santa Fe’s local minimum wage laws. Each finds no statistically significant negative effects on employment or hours (including in low-wage industries such as restaurants).
  • A larger body of economic research investigates the effects of state and federal minimum wage increases. These studies compare employment trends for states or counties that have different minimum wages. The best studies make comparisons to nearby states or counties to control for regional economic trends. These studies also find no statistically significant negative effects on employment or hours at an aggregate level or for low-wage industries such as restaurants and retail stores, or for specific groups of workers such as teens. These studies also do not find substitution effects (such as shifts in hiring away from black and Latino teens).
  • Studies of the impact of minimum wage increases on restaurants’ operating costs find that an increase of 10 percent in the minimum wage increases operating costs by about 1 to 2 percent.
  • Researchers find small one-time price increases in the restaurant industry (of about 0.7 percent following a 10 percent minimum wage increase), but not in other industries.
  • Researchers find that increases in the minimum wage reduce employee turnover, translating into a reduction in direct costs (recruitment, selection, and training of new workers) and a reduction in indirect costs (lost sales, lower quality service, and lost productivity as the new workers learn on the job).
  • Some studies have also identified additional benefits of higher wages, including improved morale, improved work performance, and reductions in absenteeism.
  • Researchers have not found evidence that employers absorbed minimum wage increases by reducing health benefits or pensions.

In summary, our assessment of the research evidence indicates that minimum wage mandates raise the incomes of low-wage workers and their families, and that the costs to businesses are absorbed largely by reduced turnover costs and by small price increases among restaurants.

That said, it is important to emphasize that existing research is necessarily limited to the range of minimum wage increases that have been implemented to date. While these studies are suggestive, they cannot tell us what is likely to happen when minimum wages are increased significantly beyond current local, state, or general mandates.

Exhibit 3: The “G-8”

The members of the “Gang of Eight” (G-8), a subcommittee of the Income Inequality Advisory Committee (IIAC), became the primary negotiators to reach a deal. The G-8 originally had eight members, but quickly rearranged and conducted nearly every meeting with seven people: three from labor and four from business.

Co-Chair David Rolf – President, Service Employees International Union (SEIU) 775

Rolf was a nationally renowned labor organizer recognized for his visionary leadership and innovative tactics. On top of his day job he had served since 2008 as Vice President of SEIU international. In addition to being the architect behind SeaTac and Seattle’s pushes for $15, Rolf successfully led major efforts in Washington, California, and Montana to unionize home care workers. Rolf’s role as committee co-chair was to reach a deal at all costs – he was potentially more willing to compromise than his labor colleagues were. Rolf and fellow co-chair Howard Wright didn’t know each other before the process started, but soon developed a strong mutual respect and partnership.

Organization: SEIU 775 was known as one of the most influential labor unions in Washington, having played a pivotal role in dozens of elections including Ed Murray’s Mayoral candidacy in 2013 and campaigns for the state legislature and statewide offices. SEIU 775 represented “more than 40,000 long-term care workers providing quality in-home care, nursing home care and adult day health services in Washington State and Montana.” 5

Sarah Cherin – Political & Policy Director, United Food & Commercial Workers (UFCW) 21

Cherin was considered the farthest left G-8 member, fitting with how progressive her organization was. Where other labor negotiators might compromise, Cherin often stayed firm in her beliefs and would not back down. Business often named her as the biggest stumbling block from the other side to reach a deal.

Organization: UFCW 21 was the most progressive labor union in Washington and a major supporter of Mayor Mike McGinn, Ed Murray’s opponent in 2013. Even so, Murray still invited Cherin to be on both the IIAC and the G-8. UFCW 21 described themselves as “the largest private-sector union in Washington with over 46,000 members working in grocery store, retail, health care, and other industry jobs.” 6

David Freiboth – Executive Secretary, M.L. King County Labor Council (MLKCLC)

Freiboth was a longtime labor leader in Washington. A graduate of the National Labor College, Freiboth led the Inlandboatman’s Union of the Pacific before directing the MLKCLC. He was not as far left as Cherin, falling somewhere in the middle between her and Rolf. However, he refused to compromise on the issue of tip credits. Freiboth and Bob Donegan had a bond from a previous committee and both valued their professional friendship.

Organization: Where Rolf had pioneered new, innovative methods of union organizing, Freiboth and the labor council represented the more traditional 20th century model. The MLKCLC was aligned with the national AFL-CIO and represented more than 120 local unions in Seattle and King County across a broad range of industries, including building and construction trades.

Co-Chair Howard S. Wright III – Chairman, Seattle Hospitality Group

Wright was a wealthy fourth-generation Seattleite, coming from a family that built many Washington landmarks including the Grand Coulee Dam and Columbia Center, at one point the tallest building on the west coast. 7 Wright was a pragmatic negotiator, and highly valued the bond he developed with his fellow co-chair Rolf. Similar to Rolf, Wright was potentially more likely to compromise than others on his side. He frequently fought for carve-outs to protect Seattle’s “progressive business community,” companies like Starbucks, Nordstrom, and REI. 8

Organization: Wright and his Seattle Hospitality Group, a family operated business, owned dozens of assets throughout Seattle, including the iconic Seattle Space Needle and the Seattle Sheraton Hotel. He had both hotels and restaurants in his portfolio.

Maud Daudon – President & CEO, Seattle Metropolitan Chamber of Commerce

Compared to her business colleagues, the Yale-educated Daudon had the most experience in governance and legislating, having been a former executive with the Port of Seattle and former Deputy Mayor. She was a smart and perceptive negotiator, able to keep track of every G-8 member’s position despite the nature of their chaotic meetings. Her whiteboard drawing led to the potential breakthrough for a final deal.

Organization: The Seattle Metropolitan Chamber of Commerce was the largest advocacy group for the private sector in Seattle, lobbying on behalf of more than 2,000 dues-paying companies. The Seattle Chamber was far to the left of the unaffiliated U.S. Chamber of Commerce, but still considered conservative by Seattle’s political standards. Daudon was Mayor Murray’s initial choice for co-chair, but she recommended her board member Wright instead because she anticipated having a tough time getting the Chamber’s diverse Board to agree on whether she should support or oppose a proposal.

David Watkins – President, Seattle Hotel Association & Manager, The Inn at the Market

Watkins, a first generation American, was new to participating in local politics and was tentative at the beginning of the process before blooming into an aggressive negotiator by the end.

Watkins was a career hospitality industry executive and thrust into his role on the IIAC due to serving a term as Board President of the Seattle Hotel Association, an advocacy group representing more than 60 hotels in the city. Watkins typically took the hardest negotiating position among the business side of the G-8, fighting passionately for tip credits and a more expansive definition of small businesses.

Organization: Watkins’ day job was as General Manager for the Inn at the Market, a 70-room boutique hotel above Seattle’s legendary Pike Place Market.

Bob Donegan – President & CEO, Ivar’s & Kidd Valley Restaurants

Donegan was a shrewd negotiator and had extensive experience dealing with city government due to his involvement in redeveloping the Seattle waterfront. He was heavily involved in the unsuccessful effort to oppose SeaTac’s $15 campaign. Donegan was the last addition to the G-8 after the first several meetings had been unproductive, included because he could speak more authoritatively on behalf of the restaurant industry. He had deep ties to the Washington

Restaurant Association and firmly supported tip credits. Donegan and Freiboth had a strong bond and both valued their professional friendship.

Organization: Ivar’s (seafood) and Kidd Valley (burgers) were revered local restaurant chains, operating more than 25 fast-food and table-service locations in Seattle and the surrounding area. Long before the national conversation on income inequality, Donegan and the company committed to paying fair wages to their workers along with full benefits to part-time employees and matching 401(k) plans. 9 As a result, his employees tended to turn over much less frequently than those at similar businesses.


1. Rolf, David. The Fight for Fifteen. The New Press, 2016, p. 144.

2. Klawitter, Marieka M., Mark C. Long, and Robert D. Plotnick. “Who Would be Affected by an Increase in Seattle’s Minimum Wage?” Evans School of Public Policy and Governance, University of Washington, 21 March 2014, http://murray.seattle.gov/wp-content/uploads/2014/03/Evans-report-3_21_14-+-appdx.pdf. Accessed 1June 2017.

3. Ibid. p. 145.

4. Reich, Michael, Ken Jacobs, and Annette Bernhardt. “Local Minimum Wage Laws: Impacts on Workers, Families and Businesses.” Institute for Research on Labor and Employment, University of California, Berkeley, March 2014, http://murray.seattle.gov/wp-content/uploads/2014/03/UC-Berkeley-IIAC-Report-3-20-2014.pdf. Accessed 1 June 2017.

5. About us. SEIU 775, http://seiu775.org/about-us-2/. Accessed 1 June 2017.

6. Who We Are. UFCW 21, https://www.ufcw21.org/who-we-are/. Accessed 1 June 2017.

7. Helm, Leslie. “Executive Q&A: Howard S. Wright III.” Seattle Business, October 2015, http://www.seattlebusinessmag.com/article/executive-qa-howard-s-wright-iii. Accessed 1 June 2017.

8. Wright, Howard S. III. Personal interview. 3 March 2017

9. Copeland, Joe. “Meet Bob Donegan, Crosscut Courage Award winner in Business.” Crosscut, 31 October 2013, http://crosscut.com/2013/10/bob-donegan-ivars-business-courage-awards/. Accessed 1 June 2017.

This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2023 Sage Publications, Inc. All Rights Reserved

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