What Constitutes a Livable Wage in This City?

Knute Berger asks: If $15 per hour is good enough for our citizens, what’s enough for city execs?
Knute Berger  |   September 2014   |  FROM THE PRINT EDITION
Seattle City Council member Kshama Sawant devoted a chunk of her salary to her pet causes

To insist on a $40,000 salary in Seattle is to take a vow of poverty.

That’s what City Council member Kshama Sawant has done. She has said that she’ll take home about that much of her $117,000 salary and devote the balance of it—some $70,000 per year—to her pet causes, in effect tithing most of her taxpayer-funded income.

I don’t know what Sawant’s overall financial picture is; maybe she has a trust fund. But I do know that living in Seattle on $40K per year—even with benefits—is a challenge these days.

Seattle has been patting itself on the back for adopting a plan to make $15 an hour the minimum wage, phasing it in over a number of years. And while that adoption reflects a moral victory for Sawant, who spurred the 15 Now campaign, and for the administration of Mayor Ed Murray, for forging a compromise acceptable to labor and representatives of the business community, when you put it in annual salary terms, the victory is both significant and hollow.

A wage of $15 an hour amounts to $31,000 a year for a very busy worker. It’s significantly better than the current state minimum wage of $9.32, but it’s still peanuts in an increasingly unaffordable town. The fact is, $15 an hour doesn’t pay the bills now, and it won’t in three years either. In terms of cost of living, according to one ranking, Seattle is the sixth-most-expensive major city in America, and 41st in the world—pricier than Los Angeles, Rome, Chicago, Seoul, Rio de Janeiro, Dubai…the list goes on. The cities we often seek to keep company with, such as New York, San Francisco, Boston and Vancouver in British Columbia, are even more expensive. Our costs are “world class,” not our affordability.

If Seattle deserves credit for trying to do something about lifting up the bottom wage earners, its behavior at the top of the public food chain seems to be out of step with its egalitarian rhetoric. Mayor Murray, for example, has been quick to pay more for key positions in his administration than his frugal predecessor, Mike McGinn. The economy is one reason: We’re through the recession, and good times and the construction cranes are back. Murray also believes that public employees should be decently paid and wants to attract top talent.

But during a June debate over the recently passed $15-an-hour minimum wage, we were also treated to the City Council, with the mayor’s support, approving a whopping pay increase for the CEO of City Light, Jorge Carrasco. The City Light superintendent has often been one of the highest-paid city employees. The salary paid to the incumbent was $245,000, and the council authorized a potential salary increase to nearly $365,000. The mayor said he planned to give City Light boss a mere $60,000 raise—equivalent to two, full-time $15/hour employees.

A majority of City Council members went along with the executive salary inflation on the notion that that’s what it takes to retain and hire talent these days. At the last minute, however, the raise was derailed, at least temporarily, by a series of stories that questioned some of Carrasco’s decisions, including his hiring of a firm at public expense to burnish the utility’s (and, by association, his own) online reputation.

The only council members to object to the raise in the first place—which, if nothing else, was an unseemly counterpoint to the arguments that raises for minimum-wage workers had to be slowly phased in—were Sawant and Nick Licata. Sawant cheered, saying, “This striking reversal is the outcome of strong public pressure on the city’s political establishment and a sign of the disgust working people feel about executive excess.”

Still, if “the market” gets to set public executive salaries as it does private ones, then government is hitching itself to the same self-serving inflationary mechanism that has made corporate CEO pay so excessive. Which is, a small group of individuals decides its capacity to run things makes it an elite group, and committees of its peers ratchet up the pay to outbid each other in displays of executive generosity. Sawant, on the other hand, recommends capping city pay at $150,000, a proposal that suggests top earners should be closer, in terms of salary, to the citizens, and that the spirit of public service, rather than market-rate compensation, ought to be reinjected into the system.