What happened
Seattle is set to increase its minimum wage to $22.14 per hour by 2027. The city's minimum wage law, which is adjusted annually for inflation, has contributed to a sharp drop in job openings and mounting cost pressures for businesses. Since the law went into effect for all businesses in 2025, 450 local restaurants have closed, accounting for about 16% of the city's total. Restaurant and retail transactions have also fallen by as much as 7% in some areas.
The minimum wage increase has led to a decrease in the formation of new businesses in the city, while adjacent suburbs with lower wage floors have seen an increase in new business formations. Proponents of the increase argue that it is necessary to help low-income individuals keep up with the city's high cost of living, while opponents claim that it will lead to further business closures and job losses.
Seattle's business environment has been declining for several years, with about 500 local businesses closing between 2020 and 2023 due to factors such as property crime and economic conditions. The city's downtown office space vacancy rate has also increased, with 35.6% of space vacant as of the fourth quarter of 2025. Some iconic businesses, such as Starbucks, have shifted operations away from the city.
