Economy

Inflation-indexed minimum wages: Washington’s cautionary tale

November 24, 2025

Curtis Shelton

Washington state is another example of minimum-wage policy gone wrong.

Twenty-five years ago, Washington had the 15th-highest labor-force participation rate among young people ages 16–24, a strong 70.7 percent. Since then, the state has increased its minimum wage by 150 percent—raising it every year (except 2010, during the Great Recession).

Over that period, youth labor participation fell by 16 percentage points to 59.2 percent, dropping Washington to 23rd nationally. 

In 2021, Washington locked in those annual increases by passing a law similar to Oklahoma’s proposed State Question 832, tying the minimum wage to inflation. As a result, the state’s minimum wage jumped from $13.69 to $16.66 between 2021 and 2025, with a new $17.13 rate already set for 2026.

This sort of minimum-wage policy not only hurts workers but also small businesses, which have a harder time finding and affording employees. Washington, once known for being the birthplace of two massive success stories in growing a business with Amazon and Starbucks, has made it increasingly difficult for anyone else to enjoy that same success.