For 2011, Washington state’s minimum wage is $8.67 per hour. This is the country’s highest state minimum wage. Legislators are considering a misguided proposal to revise the manner in which the state’s minimum wage is indexed for inflation; this proposal would over time push the wage much, much higher.

Under the provisions of Initiative 688, approved by voters in November 1998, Washington state’s minimum wage is increased annually by a percentage equal to the percentage increase in the consumer price index for Wage Earners and Clerical Workers (CPI-W). (When the change in CPI-W is a decrease rather than an increase, the minimum wage does not change.) Under the current inflation indexing system, the state minimum wage has grown from $6.50 in 2000 to $8.67 in 2011, 33 percent, with an increase in every year except 2010.

Under HB 1597, the annual percentage increase in the minimum wage for 2013 and each subsequent year would equal the increase in CPI-W plus an additional 3 percent if Washington state’s per capita personal income two years prior is (1) greater than state per capita personal income three years prior and (2) greater than national per capita income two years prior. If either of these personal income tests is not met, the percentage increase in the minimum wage would be just the percentage increase in CPI-W. Both tests would have been met in 10 of the last 11 years.

Had this indexing provision been in place since 2000, I calculate that the state minimum wage would now be $11.65, $3.15 greater than Oregon’s current state minimum wage, which is the country’s second highest. Cumulatively, the $11.65 wage would be a 79 percent increase from 2000’s $6.50 wage. In comparison, per capita personal income grew a measly 37 percent from 2000 to 2011.