2024 Olympia Minimum Wage Analysis

In light of recent discussions around increasing the minimum wage in the City of Olympia, the EDC has conducted an in-depth analysis of the potential impacts. Here, you’ll find our analysis, both in summary form as well as the full, academic research analysis.

The key findings from this analysis suggest that while raising the minimum wage can lead to higher incomes for workers, it may also present challenges for local businesses, particularly those in labor-intensive sectors such as retail, food service, and hospitality. A wage increase to $20 or $24 per hour would place significant strain on businesses, raising Olympia’s Kaitz Index—the ratio between minimum wage and median wage—to levels among the highest globally. This could result in reduced hours, higher business closures, and increased reliance on automation, particularly in industries still recovering from the COVID-19 pandemic.

Teen employment and nonprofits may also see a decline in opportunities as wage increases disproportionately affect low-margin businesses.

Experts recommend a balanced approach, proposing that minimum wage increases should be aligned with the Kaitz Index, maintaining a wage between 50%-60% of Olympia’s median wage ($16.28 – $16.80 per hour). This strategy would maximize the benefits of reducing inequality while minimizing negative impacts on employment and economic stability.

While wage hikes may lead to modest price increases, they also have the potential to boost consumer spending as workers gain more disposable income. However, it is essential that these wage changes are implemented carefully to prevent unintended consequences, such as job loss or decreased business competitiveness.

By focusing on a sustainable wage growth model, alongside policies to reduce costs in housing, energy, and healthcare, we can ensure that all members of our community—both workers and business owners—can flourish.