By Bill Rigby
SEATTLE (Reuters) - Mayor Ed Murray announced a plan on Thursday to raise the minimum wage in Seattle to $15 per hour over three to seven years, making it the first major U.S. city to commit to such a high base level of pay.
The plan is the product of a committee convened by the mayor, including labor and business leaders, that spent 16 weeks negotiating a compromise deal. It must still be approved by Seattle's City Council before it becomes binding on employers.
Under the terms of the plan, small businesses with fewer than 500 workers must raise wages to a minimum of $15 per hour over the next seven years. Those with more than 500 workers must meet that level within three years.
Once the $15 level is reached, further rises will be linked to cost of living increases, said Murray, a Democrat who took office in January with a $15 minimum-wage law as one of his administration's objectives.
Speaking at a news conference, Murray said the plan shows how Seattle "can lead the conversation and the nation to address this growing problem of income inequality."
Seattle is leading the way in a nationwide Democratic-led push to raise minimum wages. Seattle suburb SeaTac last year approved an initiative enacting a $15 minimum wage for many workers, although airport employees were later excluded.
President Barack Obama has pushed Congress to raise the federal minimum wage to $10.10 per hour from $7.25, but has failed to win the backing of the Republican-controlled U.S. House of Representatives.
The long lead-in time for implementation of the Seattle wage measure appears in part to be a compromise to placate businesses that had wanted to count tips and employer contributions for healthcare benefits toward the wage target.
Murray's plan gives big businesses that offer healthcare benefits an extra year - four years instead of three - to meet the wage benchmark, an issue that has stirred intense debate among employers in Seattle over the past few months.
Small businesses that provide healthcare or whose workers receive tips must meet the $15 wage minimum including benefit contributions and tips within five years. But the basic wage must reach $15 within seven years. Washington already has the highest minimum wage of any U.S. State, at $9.32 per hour.
Local labor and business leaders largely presented a united front in welcoming the plan.
"Most of the employer community will be happy with this," said Howard Wright, chief executive of the Seattle Hospitality Group, who co-chaired Murray's committee, speaking at the announcement. "We didn't get everything that we wanted, but neither did anyone else at the table."
David Rolf, local president of the Service Employees International Union and the other committee co-chair, said the proposal would "put dollars into the pockets of a huge number of Seattle workers, that will recirculate through the local economy to produce broadly shared prosperity."
The OneSeattle Coalition, a group of employers that campaigned for tips and healthcare benefits to be included in any minimum wage plan, said its members were reviewing Murray's announcement. The group may yet file a ballot initiative to go before Seattle voters, according to a spokesman, which could stall the mayor's plan.
Kshama Sawant, a Seattle City Council member who has helped lead the push for an immediate, city-wide $15 per hour minimum wage, said Murray's plan gave too much to employers.
"This proposal does not live up to the wishes of Seattle's workers. That's why I vote 'No' on this recommendation," Sawant said. She urged her supporters to keep up pressure on the council.
Proposals to raise the minimum wage have been considered in nearly three dozen states in 2014, according to the National Conference of State Legislatures. Increases have been approved in Connecticut, Delaware, Maryland, Minnesota, West Virginia and Washington, D.C.
(Reporting by Bill Rigby; Editing by Cynthia Johnston, Bernadette Baum and Mohammad Zargham)