‘You cannot force them to stay in business’: Jake, Rantz question how Seattle businesses will absorb a $22.14 minimum wage

Seattle’s minimum wage will rise to $22.14 an hour on Jan. 1, 2027, under the city’s annual inflation adjustment. Ahead of that increase, the owner of Penelope & The Beauty Bar at the Fairmont Olympic Hotel has frozen hiring and turned to artificial intelligence for some work, according to Seattle Red 770 AM.

On “The Jake and Spike Show” on KIRO Newsradio, Seattle Red 770 AM host Jason Rantz questioned how much businesses can charge to cover labor costs, while co-hosts Jake Skorheim and Spike O’Neill discussed hiring opportunities and raises for experienced employees.

“At some point, I think everyone kind of understands there’s a limit to how much people will pay for whatever product or service that you’re offering,” Rantz said. “The same is true of a facial at a high-end spa. There’s only so much people will be willing to spend.”

Rantz details spa staffing changes

Rantz described changes the spa began making before the latest wage announcement.

“They’re getting rid of some of the support staff that previously were being employed,” he said. “They’re cutting down on the number of students that they bring on during the summer as a direct result of this. They started to do this before this increase was announced, and so it’s only going to get worse.”

Rantz also discussed the owner’s expansion plans.

“She’s looking at the cost of doing business here, and she’s saying she’s going to expand outside of the state of Washington as a direct result of this,” he said.

Jake raised a similar question about coffee shops.

“There’s only so much that you can charge for a cup of coffee,” he said. “They have to pay those employees with whatever they’re making from the coffee.”

Jake and Spike discuss who works minimum-wage jobs

Jake recalled an early construction job digging beneath homes so more experienced workers could reach the foundation.

“I was purely a grunt. I had zero experience,” Jake said. “He had to spend more of his time telling me what not to do than what to do. That was such a valuable experience for me, though, because it gets your foot in the door.”

Rantz discussed minimum-wage work in similar terms.

“These are starter jobs in a way. Not always, but in a way, in many cases they are,” he said.

Spike challenged that description.

“They’re minimum-wage jobs that are employing adults,” he said. “They’re not learning how to do work and how to meet a schedule or be accountable. This is the only job they can find these days, and it pays minimum wage even when they’re an adult.”

Rantz responded with an example of how he believes employers could choose applicants at the higher wage.

“Someone who’s coming with zero experience, I’m going to give it to the person who’s got a little bit more experience or a different kind of experience, just to justify this kind of pay,” he said.

Higher pay can extend beyond minimum-wage workers

Rantz also discussed workers already earning more than the minimum.

“Let’s say someone right now is making $23 an hour, and they’ve got a lot more experience,” he said. “But it’s just that next rung up.”

Rantz described the response he would expect from that employee.

“Wait, so now I only make a few cents more than the person who has no experience whatsoever getting in. So now I want a raise,” he said.

Spike recalled a restaurant operator in Maryland describing the same concern.

“It raises the cost of doing business across the board, not just for minimum-wage earners,” he said.

Jake questioned what happens when businesses cannot cover their expenses.

“You cannot force them to stay in business in a city where they will lose money,” he said.

Watch the full discussion in the video above.

Listen to “The Jake and Spike Show” weekdays from noon to 3 p.m. on KIRO Newsradio 97.3