Credit unions in the state of Washington may be the test case towatch as minimum wage hikes begin to spread from state tostate.

Because their jobs typically pay above mandated minimums, creditunions there don't expect an immediate and direct impact onpayrolls, but will a higher minimum wage boost those already abovethe minimum? Will some members' paychecks grow to where they may beable to afford a loan they couldn't qualify for previously?

Washington currently has the nation's highest state wage floorat $9.32 an hour. Voters in the Seattle suburb of SeaTac approved ajump to $15 an hour, but the U.S. Supreme Court is now decidingwhether that should apply to workers at the airport run by the Portof Seattle.

A court challenge has also been filed against a vote by theSeattle City Council to raise the minimum wage there to $15 anhour.

Anne Shannon, SVP for human resources at the $12 billion BECU inTukwila, pointed out that Washington has one of the nation's lowestunemployment rates, about 6%.

“Right now our economy is pretty robust,” she said.

“Metro Seattle, along with a handful of other cities, has seen ahuge boom in technology,” added Todd Pietzsch, the credit union'smanager of public relations. Economics 101 suggests high demand forworkers means employers must offer attractive wages to lurestaff.

Shannon noted passage of the $15 minimum in Seattle has drawn alot of media attention.

As for BECU, “Our lowest-paid workers earn around $13 or $14 anhour,” she said. “That reflects our local market here in Seattle.When the $15-an-hour law is fully in place, we might have to raisesome people, but by then they would probably be over $15anyhow.

“When I was thinking about the effect of the $15 minimum wage, Ilooked at what we would have to do if it impacted the bottom wageearners. We did make a recommendation that we would actuallyincrease some other positions to higher pay rates to reflect thejob complexity and to keep relative pay in place. “

Another factor is job benefits. Shannon believes a credit unionwould be challenged to hire and retain employees without asignificant benefits package. She said the credit union pays about38% beyond the hourly rate in benefits including paid time off,medical insurance, dental and vision coverage, life insurance,retirement and long-term disability.

To educate employees about this, BECU issues a Total RewardsStatement showing the value of such benefits to the employee andhis or her family.

Looking beyond the credit union's employees, let's assume someBECU members see minimum wage hikes boosting their paychecks. Doesthat suggest the credit union will gain as those members qualifyfor loans they couldn't previously afford?

“Net income is obviously something that's looked at,” Pietzschresponded. “If somebody is making more money that's certainly goingto increase the probability they're going to qualify for a loan orpossibly a larger loan. That's true for anyone whose incomeincreases over their lifetime.”

Shannon offered another perspective. There are many wage-basedprograms that provide benefits such as food stamps. If the minimumwage increases, some people could see themselves no longerqualifying for certain assistance, leaving them with higher costsat the grocery store or elsewhere and less income for otherexpenses such as loans.

Jeff Adams is president/CEO of the $601 million Horizon CreditUnion in Spokane Valley. Although his credit union isn't affectedby the SeaTac or Seattle minimum wage laws, it does fall underWashington State's new $9.32 minimum.

Adams sketched a mixed outlook regarding employment in theSpokane area.

“The economy has moved in the right direction over the pastcouple years,” he observed. “There are a couple things that haveimpacted jobseekers. There are more jobs available becauseunemployment is lower. But in our area a couple of larger companieshave closed and there have been some mergers.”

Jodie Olson, vice president of human resources, confirmed HCUentry-level jobs start above minimum wage and agreed with commentsfrom BECU that a total compensation package is important.

As for the impact of minimum wage hikes on members, there aremany variables.

“Some people may be able to go out and get loans,” Adams said.“But if you get a $2 or $3 an hour raise, you usually don't run outand buy a car right away. You're going to see costs in other areasincrease.”

Just as all politics is said to be local, evidently the impactof minimum wage hikes varies from Seattle to the eastern side ofthe state.

Suzy Fonseca is president/CEO of the $64 million Lower ValleyCredit Union in Sunnyside, Wash. It's a rural area, relying heavilyon agriculture.

“Like many employers, we have always strived to pay higher thanminimum to attract and retain the best possible talent,” Fonsecasaid.

“With that said, the as minimum wage has increased our spreadshave decreased, and although we have managed nicely, it has made ita bit more challenging to stay ahead of the pack in thisrespect.”

Fonseca, whose credit union was the 2014 winner of the CU TimesTrailblazer Award for Outstanding Service to the Underserved,also doesn't see a minimum wage increase affecting LVCU's membersto any great extent.

“We serve a unique membership mix,” she explained. “Since we areagriculturally rooted we support our farmers as well as our farmlaborers. Their buying power is relatively unchanged due to thevolume of the workforce.”