Seattle’s minimum wage is set to rise to $22.14 an hour in 2027, a figure that would make it the highest minimum wage in the country if no other city or state catches up first. The increase comes as the broader metro area works through weaker job postings, rising office vacancies and a wave of restaurant closures.
Since 2025, every employer in Seattle, including small businesses, has been required to pay the same citywide minimum wage, which is adjusted each year for inflation. A full-time worker earning that wage would make just over $46,000 a year.
Some restaurant owners who closed their businesses this year pointed to rising labor costs as one of several financial pressures behind the decision. In the first half of 2025, about 450 Seattle restaurants — roughly 16% of the city’s total — shut down. Square transaction data cited by The Wall Street Journal showed retail and restaurant sales fell by as much as 7% year over year in some business districts near the Amazon and Microsoft campuses.
One Seattle restaurant owner described the ripple effect of the wage floor to Eater in 2024, saying, “If the servers are making $20 an hour, then I gotta pay the cooks $35.”
Anthony Anton, CEO of the Washington Hospitality Association, told the Center Square last year, “Operators are making less money than ever and are charging more than ever.”
Research points to a broader shift
A peer-reviewed study from researchers at the University of Wisconsin, Madison found that simply announcing Seattle’s minimum wage increase reduced new business formation within city limits, while increasing new business formation in neighboring suburbs with lower wage floors.
Supporters of the wage increase argue Seattle’s high cost of living requires higher pay to keep low-wage workers out of poverty, and that paying more can help businesses retain staff.
Broader economic strain
Seattle’s business challenges predate the citywide minimum wage law. From the start of the COVID-19 pandemic in early 2020 through 2023, about 500 local businesses closed, according to the Downtown Seattle Association. By the following year, the group counted 543 vacant storefronts across the city, with many owners citing property crime alongside economic pressures.
Job postings across the Seattle metro area fell 35% between February 2020 and October 2025, a decline second only to San Francisco nationally, according to an Axios analysis. Local business owners say job applicants now include people with master’s degrees and prior experience at companies like Microsoft applying for barista positions.
Downtown office vacancy reached 35.6% in the fourth quarter of 2025, up from 32.3% a year earlier, according to Cushman & Wakefield data. Some longtime Seattle employers, including Starbucks, have shifted operations away from the city.
