Business owners weigh effects of I-1433 minimum wage measure

Felix Ngoussou, a Seattle Central District business owner and an immigrant from Chad, supports Initiative 1433, but acknowledges the initiative puts a burden on small businesses. (Photo by Lee Nacozy.)
Felix Ngoussou, a Seattle Central District business owner and an immigrant from Chad, supports Initiative 1433, but acknowledges the initiative puts a burden on small businesses. (Photo by Lee Nacozy.)

On a recent rainy night, business owner Felix Ngoussou was at his Lake Chad Cafe until midnight, as he is every night. Ngoussou, originally from Chad, is trying to hire someone to work for $11 an hour but said Seattle employees expect $15.

He thinks there is a lack of education about the increases. He posted a chart on the Lake Chad wall showing the Seattle increase.

“Other business owners are going around saying, ‘Yes, $15!'” he said. “That won’t even go into effect for several years. The media makes it look like it is going to $15 an hour right now.”

But Ngoussou supports the statewide minimum wage measure Initiative 1433. He also supported the Seattle minimum wage increase.

Ngoussou acknowledges a conflict for small business owners. While he supports both Seattle’s law and the statewide initiative, he said business owners paying the higher wages have become more demanding of applicants. That could be a disadvantage to job-seekers who are immigrants, whose first language might not be English.

“We’re creating a high unemployment rate for immigrant and refugees who don’t have experience and skill,” Ngoussou said.

Initiative 1433 is currently before voters and would raise the statewide minimum wage to $13.50 by 2020. The wage requirement would rise to $11 in 2017, $11.50 in 2018, $12 in 2019, $13.50 in 2020, and would then rise with inflation, perhaps to $13.86 in 2021.

The initiative would also require employers to provide paid sick leave. An employee would earn one hour of paid sick leave for every 40 hours worked.

At a recent event organized by campaign supporters Main Street Alliance, Ngoussou was asked along with several other business owners to speak to reporters about the issue.

Molly Moon Ice Cream owner Molly Moon Neitzel told reporters, “We are really looking forward to raising the minimum wage.” Another business owner said the initiative is “a win-win situation.”

But Ngoussou spoke candidly about the struggles he’s had. “You raise the wage, you have to control costs.”

He said he had to lay off two employees because of the Seattle minimum wage increase: “I used to have four. Now I have two.”

Ngoussou is an experienced businessperson who has taught immigrants and entrepreneurs to run businesses through his work at Capital Development and Catholic Community Services. He has worked as a business advisor, a small business loan officer, and project director for the U.S. Department of Commerce Minority Business Development Agency.

After the press event, Ngoussou spoke in front of the cameras out on the sidewalk.

“It is always a good initiative, but it is just incomplete,” he said. “Maybe you can apply it in Capitol Hill, Bellevue, Redmond … but you cannot apply it in poor neighborhoods like Tukwila, SeaTac, the Central area.”

Outside of Seattle and the city of SeaTac, where voters approved a $15 minimum wage in 2013,  Washington’s minimum wage is $9.47 and will rise with inflation.

If the initiative does not pass, the state’s minimum wage would be around $10.28 in 2020. Four Washington cities (SeaTac, Seattle, Spokane and Tacoma) have laws requiring paid sick leave, but there is no statewide law.

Raise Up Washington drafted Initiative 1433 and collected over 360,000 signatures to get it on the ballot. They raised $4.2 million for the campaign.

“One of the great parts of this campaign is that people are already with us,” Raise Up Campaign Manager Carlo Caldirola-Davis said. “These aren’t new ideas to people. They are fundamental and common sense labor standards. It transcends partisanship and geography.”

The initiative is well supported. An October 2016 survey by pollster Stuart Elway showed 58 percent of Washington voters supported I-1433.

SeaTac was the first local city that raised the minimum wage to $15 by ballot initiative in 2013. The Seattle City Council then passed an ordinance in 2014 that incrementally raised the minimum wage to $15 by 2021.

“Fight for $15” has since become a national rallying cry. California, New York and Washington D.C. raised their minimums to $15. Fourteen states started 2016 with new minimum wages. The current minimum wage in Washington — which once had the nation’s highest — now is the eighth highest among the states.

However, outside SeaTac and Seattle, there is less support for $15 wage throughout the state. Last year, Tacoma voters decided whether to raise their minimum wage to $15 or $12 an hour. Voters chose $12.

Andy Dinnison owns Atticus Coffee & Gifts and Boo Radley’s toy store in Spokane. Like Ngoussou, he feels conflicted over I-1433.

“If people are struggling with their cost of living, yes, let’s help,” Dinnison said. “The Democrat in me believes absolutely you do everything you can, but the business owner in me is like, ‘This is a tough one.'”

Jen Menzer has been one of Dinnison’s employees since 2001 and now manages Atticus and Boo Radley’s.

“I see how this puts stress on businesses. If you need another person, do you hire someone knowing you’re going to have to pay them that much? Or do you make everyone else work harder?”

“I’m kind of torn,” Menzer said. “I want everyone to make a livable wage. I think it’s really hard to live on a minimum wage job. I haven’t had that in a long time. But I have children, and I know the cost of living has definitely risen.”

Seattle University Economics Professor Stacey Jones understands business owners’ concerns.

“Employers have to increase wages across the pay scale in order to maintain wage differences by experience and skill level. If the newly-hired dishwasher makes $13.50, the sandwich-maker with a year of experience must be paid more to maintain fairness and to give employees an incentive to stay. For employers, this means that the minimum wage is more costly than it initially appears. For employees, the benefits extend further up the pay scale than one might think. Effects on employment might be larger than that predicted by analysis that only considers the lowest-paid workers.”

But Raise Up’s Caldirola-Davis said these concerns of rising costs are unfounded and come up with every possible wage increase.

“When you pay low-wage workers a little bit more, that goes right back into our local communities.”

Caldirola-Davis’ argument echoes the University of Washington’s Minimum Wage Study that reported that while 62 percent of Seattle employers said they planned to raise prices with the new minimum wage, “preliminary analysis of grocery, retail and rent prices has found little or no evidence of price increases.”

1 Comment

  1. Thank you for giving a chance micro business owners who have been shut down by corporate-fan like Molly moon who do not understand what these business owners are going through. Mr. Ngoussou has been stopped during the press conference rudely and in a disrespectful way several times by one business owner who has more than 7 stores in the State with many private investors on her belt. The business has even an audacity to re-call for another press conference with Mr. Ngoussou out. A real setup to create a diversity support with a black on camera right?

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