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Labor-Backed Initiative at SeaTac Targets Airport, Hotels — Would Set Highest Minimum Wage in Country at $15 an Hour

Sea-Tac International Airport, North America's 17th busiest airport.

Sea-Tac International Airport, North America’s 17th busiest airport.

OLYMPIA, May 15.—A local ballot initiative in the city of SeaTac would give airport workers and those in nearby hotels and car-rental companies the highest minimum wage in the country by nearly $5 an hour, the latest move in a labor-backed push to set the rules at North America’s 17th-busiest airport.

Already it has the appearance of a fight that will embroil the state’s business community at the highest level. Business groups are groaning, and at least one lawmaker says he is investigating whether the Legislature might be able to pass a bill pre-empting the initiative. Labor unions and allied organizations are gathering signatures for the measure, which they hope to place on the November ballot. It would require employers in airport-related businesses to pay at least $15 an hour and mandate that they provide paid sick leave.

It is a continuation of a battle that has played out in the Legislature since 2011, where the same coalition of labor and progressive interests has pushed a narrower bill that would restrict hiring by airport contractors and concessionaires — of particular importance in cases where new employers go non-union. But while those provisions are part of the initiative as well, it is the minimum wage and sick-leave provisions that are the rallying point. Advocates call it a matter of social justice. “There is no secret here,” said Thea Lefkovitz, spokeswoman for the SeaTac Committee for Good Jobs. “Workers would like to be paid a fair wage; they would like to not be living in poverty and they would like to have paid days of sick leave if they or a child are sick. A person that is working full-time should have the ability to put food on the table, and if that is what workers are looking for at the airport, we certainly are going to support them.”

Not Just About Wages

The Sea-Tac Holiday Inn, one of many hotels that ring the airport perimeter.

The Sea-Tac Holiday Inn, one of many hotels that ring the airport perimeter.

The campaign is backed by Working Washington, an organizing arm of the Service Employees International Union that has been active in the Occupy movement and which has been focusing on SeaTac and its airport over the last two years. The organization touts a report by Puget Sound Sage, which observes that there is no minimum wage at the airport other than the state minimum wage of $9.19 an hour. Other major west-coast airports impose contractual minimums ranging from $13.45 at Oakland to $14.18 at San Francisco. It should be noted, however, that the SeaTac initiative extends beyond airport concessionaires and contractors by imposing a minimum wage on off-premises businesses. It encompasses hotels with more than 100 rooms – there are 45 of them within the city limits. And it applies as well to shuttle services with more than 10 vans or buses, parking-lot operators with more than 100 spaces, and car-rental companies with a fleet of more than 100 cars.

Backers say the measure would affect roughly 5,000 of the 40,000 workers who are employed in the city of SeaTac, where the airport and its ancillary businesses are the dominant employers. The wage would be set at $15 an hour next January 1, and it would be increased annually to adjust for increases in the federal consumer price index for urban wage earners and clerical workers, the fastest-rising of the indexes maintained by the U.S. Department of Labor.

Clearly the initiative would give the city of SeaTac the highest minimum wage in the country, albeit not for all businesses in the city limits. Washington has the highest state minimum wage, and the city of San Francisco has the highest municipal minimum at $10.55.

But it’s not just about pay. The effort is fueled by a realignment of business practices at the airport that has taken place over the last decade. Cost-conscious airlines have farmed out baggage handling and other services to private contractors, and starting in 2005 the Port of Seattle, owner of the airport, opened up its concessions to a multitude of contractors, some non-union, rather than awarding a master contract. Over the last two legislative sessions, SEIU, the United Food and Commercial Workers and UNITE HERE, the union formerly known as the Hotel and Restaurant Employees, have been urging lawmakers to pass a bill that would require new concessionaires to hire workers who are displaced when old concession contracts expire. The Port of Seattle says a 2005 court injunction forbids it from interfering in hiring and other labor practices, and the bill stalled at the statehouse during the 2011 and 2012 sessions.

The initiative incorporates the same basic idea, by declaring new concessionaires to be “successor employers” and requiring them to offer jobs first to employees of former contractors before transferring employees or hiring off the street. It also would require that employers offer full-time jobs if the hours are available, rather than hiring multiple part-time workers.

Could be Easy Campaign

The signature drive is looking like a slam-dunk. SeaTac, the city, spelled with a capital and not with a hyphen, makes an obvious target for an initiative campaign because the 10-square-mile municipality is dominated by the airport. A relatively small percentage of the people who work there actually live within the city limits; many of those who occupy the homes and apartments under the noisy flight path are among those who earn the lowest wages. Only about 10,000 of the city’s 27,000 residents voted in the last election, and given the 15 percent threshold required for signature gathering, only 1,500 signatures are required. That means a signature drive isn’t the daunting thing it might be in a populous city like Seattle. Already a big effort appears to be under way: Organizers say 90 canvassers went door-to-door last weekend as the campaign launched. “It is a small community, so it is easy to swing the place with a small number of votes,” says Councilman Rick Forschler. “But we have got high-profile corporations at the airport, there are airlines and logistics companies, famous brand-name hotels, the Marriotts and the Holiday Inns. And it would be a feather in the unions’ cap to say, look what we’ve done here.”

Indeed, it appears that unions and progressive groups have been laying the municipal-level groundwork for at least two years. In 2011, three city council members were elected with nearly $100,000 in independent-expenditure spending from Working Washington, UNITE HERE and the Washington Conservation Voters. Forschler notes that is as much as been spent on all other city council races since the city was incorporated in 1990. If enough signatures are gathered, the seven-member council has the option of passing the measure outright; in the meantime, city government has put up no resistance to the ballot measure, as sometimes occurs in other smaller cities when local initiatives are filed. City officials announced Monday that the measure has qualified for signature-gathering.

“Here’s the problem,” Forschler says. “I think probably most people in SeaTac are saying, oh, yes, we need to have better jobs, and therefore we should raise the minimum wage. But I see that it is going to make it more difficult to do business here. Some hotels might even close their doors; we have already got parking companies that are moving outside of SeaTac. We will lose tax revenue from business, which means a larger percentage of our city support will have to come from the residents, the taxpayers. If people get swayed into thinking that this will have no effect on them, that this will only affect greedy business owners or something, I think they will be shocked.”

Business is Groaning

Already two major business trade associations say the initiative is causing alarm among their members. Jan Simon of the Washington State Lodging Association says margins at many of the hotel-based restaurants are very slim, and because the initiative does not affect standalone restaurants, many would find themselves at a distinct competitive disadvantage. Two members with a total 228 restaurant employees have told her they would have to close their dining rooms, she says. “I’m sure that the people who drafted this and want to see it passed are doing it because they want to support employees. The unintended consequence is going to be that those who still have a job will have a higher wage, but in just those two hotels alone, we’re talking about 228 people losing their jobs.”

It’s hard to predict what the direct impact would be, she says, but she says the initiative would make it far less likely that hotel operators would invest in expansion and improvements. Some hotels in the area are in receivership: “There are hotels that are just hanging on, and if this passes, they will close.”

Bruce Beckett of the state Restaurant Association, who battled the bill in the Legislature back in 2011 and 2012, notes that the restaurants operating airport concessions are bound by Port of Seattle contracts that require them to charge the same rates as they do at off-airport locations. Because lease and permit costs are high, Beckett says some may be forced to close if a high wage is mandated. If the Port of Seattle relaxes the rule, “all of a sudden the traveling public will be faced with – well, who knows what a meal is going to cost?” But just as important, he says it reflects a move by labor interests to impose standards city by city, in the same way that the city of Seattle moved last year to impose a mandatory sick leave requirement. “It is going to be a mess.”

State Rep. Cary Condotta, R-East Wenatchee, says he is investigating the possibility of introducing a bill that would preempt the ability of the city of SeaTac to set its own minimum wage. “It will reduce jobs, it will create high unemployment in the area, and it will knock a lot of people out of business,” he says. “It is not about jobs – what they’re doing is that they are using it as a testbed. If they can get their foot in the door here, they can go and attack some other place.”

Plenty of Muscle

The effort appears to have political cred and plenty of muscle. The SeaTac Committee for Good Jobs, which shares office space with Working Washington and SEIU in Seattle, hasn’t filed a campaign fund-raising report. But the announcement it released Tuesday contained an endorsement from King County Councilwoman Julia Patterson, a former legislator who represents the SeaTac area: “When workers aren’t paid a living wage, their ability to be self-sufficient is compromised. They are forced to choose between food, housing costs, gas for their car – the day-to-day necessities that most of us can count on. As a result, things like their health care and their ability to save for their child’s college education are secondary, or most likely out of reach. It’s a cycle that affects not only them, but the entire community. It impacts our schools, our neighborhood health centers and our community’s economic vitality.”

And it might be noted that state Rep. Dave Upthegrove, D-Des Moines, who has launched a campaign to succeed the retiring Patterson this election, was the prime sponsor of the labor bill in the House. Lefkovitz says advocates have lined up support from faith and community leaders as well, and she scoffs at the idea that the increase in the minimum wage would bring hardship to SeaTac and Sea-Tac. The airport is thriving, she says, and it’s not as though Sea-Tac is about to relocate. “Companies that do well in the city of SeaTac should be doing well by the people who work for them and by the people who live in SeaTac,” she says.

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