Seattle is expected to raise its minimum wage to $22.14 an hour in 2027, as the broader metro area faces a sharp decline in job openings and Seattle businesses face increasing cost pressures.
Starting in 2025, all Seattle employers, including small businesses, were required to pay the same minimum wage, adjusted annually for inflation. Several Seattle restaurateurs who have since closed their businesses cited rising labor costs among the financial pressures that contributed to their decisions.
In the first half of 2025, shortly after wage increases took effect for all businesses, 450 Seattle restaurants, or about 16% of the city’s total, closed their doors. Restaurant and retail transactions fell as much as 7% from a year earlier in some business and commercial districts around Amazon and Microsoft campuses, according to Square data cited by The Wall Street Journal.
If no other jurisdiction raises its minimum wage to match or surpass Seattle, the Emerald City will have the highest minimum wage in the country next year. A person working full-time at minimum wage in the city will earn just over $46,000 per year.
“If servers make $20 an hour, then I have to pay cooks $35,” a Seattle restaurateur said of Eater’s 2024 wage increases.
“Operators are making less money than ever and charging more than ever,” Anthony Anton, CEO of the Washington Hospitality Association, said last year, according to The Center Square.
A peer-reviewed study published by researchers at the University of Wisconsin-Madison found that simply announcing a minimum wage increase in Seattle decreased new business creation within the city limits while actually increasing new business creation in adjacent suburbs where minimum wages were lower.
Supporters of raising Seattle’s minimum wage, however, argue that the city’s high cost of living requires higher wages for people at the lower end of the economic spectrum to prevent more people from falling into poverty. They also say that higher pay can help companies retain staff.
Seattle’s degrading business environment predates the widespread implementation of its inflation-indexed minimum wage laws.
From the start of the COVID-19 pandemic in early 2020 through 2023, about 500 local businesses have closed, according to the Downtown Seattle Association. A year later, the association counted 543 vacant storefronts in the city. During this period, many business owners cited property crimes as well as local economic factors as reasons for leaving.
The decline in business creation comes at an inopportune time for Seattle residents, as job openings in the city’s metro area fell 35% between February 2020 and October 2025, a decline second only to that of San Francisco, according to an Axios analysis. Local business owners have reported that people with master’s degrees and those with experience at prestigious companies such as Microsoft are applying to work as baristas.
Seattle’s once-booming tech economy is now showing clear signs of strain, from a decline in hiring to an increase in vacancies in downtown offices.
In the fourth quarter of 2025, 35.6% of offices in downtown Seattle were vacant, up from 32.3% the year before, according to Cushman & Wakefield data. Some iconic Seattle companies, Starbucks, for example, have moved their operations out of the city.
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