SEATTLE » Seattle Mayor Ed Murray on Thursday proposed a phased-in increase of the minimum wage to $15 an hour over the next seven years — a compromise endorsed by both business and labor that would make the city’s pay baseline the highest in the nation.

A group called 15 Now, led by socialist City Council member Kshama Sawant, wanted to see an immediate wage hike for large businesses and a three-year phase-in for organizations with fewer than 250 full-time employees. They are gathering signatures to get their competing $15 wage initiative on the November ballot.

The mayor’s proposal is the latest by cities and states nationwide to raise minimum wages. Last month, Minnesota raised the state’s guaranteed wage by more than $3, to $9.50, by 2016. California, Connecticut and Maryland also have passed laws increasing their respective wages to $10 or more in coming years, and other states are going well above the federal minimum of $7.25 per hour.

If Seattle’s plan is approved, the city would move toward having the highest wage of any U.S. city. San Francisco, at $10.55 an hour, has that distinction now.

The mayor’s proposal gives businesses with more than 500 employees nationally at least three years to phase in the increase. Those providing health insurance will have four years to complete the move.

Smaller organizations will be given seven years, with the new wage including a consideration for tips and health care costs over the first five years.

Once the $15 wage is reached, future annual increases will be tied to the consumer price index.

Murray said 21 of 24 members of his minimum wage task force, which included representatives of business, labor and community groups, voted in favor of the plan.

"I think that this is an historic moment for the city of Seattle," Murray said. "We’re going to decrease the poverty rate."

Howard Wright, CEO of the Seattle Hospitality Group and a co-chairman of the task force, said he thought the plan would have support from the business community.

"While I know not everyone in the employer community will be satisfied, I believe it is the best outcome given the political environment," he said.

The measure now goes to the City Council for discussion. Council member Nick Licata, a member of the task force, said he would work to get the proposal approved with minimal tinkering.

Washington state already has the nation’s highest minimum wage among states at $9.32 an hour. According to a chart prepared by the mayor’s office, many Seattle workers will reach $11 an hour by 2015. The state’s minimum wage is scheduled to be $9.54 at that time.

Business leaders had pushed for the phase-in and wage credits for tips and health care benefits.

Fewer than 1 percent of the businesses in Seattle have more than 500 workers in Washington state, according to a study for the city by the University of Washington. Those businesses have a total of about 30,000 employees, representing about a third of those earning under $15 an hour in Seattle.

Murray called the plan a compromise and dismissed concerns that he would face opposition at the city’s May Day events, which include a "15 Now" theme.

"I wanted 15, but I wanted to do 15 smart," he said.

Labor leaders congratulated the mayor for starting a national conversation, which many credit to Sawant, the socialist City Council member.

"Raising Seattle’s minimum wage to $15 reaches far beyond the 100,000 workers who will benefit with the city limits," said David Rolf, president of SEIU Healthcare 775NW and co-chair of the task force. "Today, Seattle workers send a clarion call to all working people in America."