Seattle's minimum wage hike hurting low-level workers, study says


The study done by the University of Washington showed that Seattle employers have had to cut their payrolls, delayed new hiring new employees, and reduced hours or laid off employees, altogether.

Seattle was the first city in the nation to pass a $15 minimum wage, and has been a model for Minneapolis.

Last year, NY passed legislation that will raise the minimum wage to $15 by 2018 for nearly all businesses in the Big Apple. According to one of the designers of the study, they "found no evidence that minimum wage increases were effective at reducing overall poverty rates or poverty rates among workers". Instead, some analysts say, lower wage earners have seen a paycheck bump because of natural economic trends. The study, which was funded in part by the city of Seattle, found that workers clocked 9% fewer hours on average, and earned $125 less each month after the most recent increase. "It can be the difference between being able to pay your rent and not being able to pay your rent". Past research suggests that raising the minimum wage modestly provides more good effects than bad, but there isn't yet enough research as to how employers would adjust for a larger raise in minimum wage.

The researchers then compared what happened in the real Seattle from June 2014 through September 2016 to what happened in the synthetic Seattle.

Other studies on minimum wage have typically used lower-wage industries, such as the restaurant sector, or lower-paid groups such as teenagers, as proxies to get at employment, they said.

This study has also not been peer-reviewed.

Michael Reich, a UC Berkeley economics professor who was lead author on the Berkeley report, said he found the UW team's report not credible for a number of reasons.

Also, the UW researchers had access only to the incomes and hours worked of employees within the state of Washington. Last year, California Gov.

Council Member Jacob Frey said he thinks small businesses should have more time than large businesses to phase in the wage increase.

One of the major limitations of the study, the Economic Policy Institute (EPI) points out, is that the data it analyzed excluded business with multiple locations, such as chain restaurants and big box retailers. Vigdor said multisite businesses were actually more likely to report staff cutbacks. It's unclear whether the study results will impact the ordinance that is expected to pass here. "The fact that we find zero employment effects when using methods common in prior studies - just as those studies do - amplifies these concerns".

It may still be too early to tell what the effects of a higher minimum wage on Seattle will be as the minimum continues to increase, but it does give a little insight to a possible negative outcome of the experiment.

Still, Seattle is a unique city in that it started with a high wage floor. Now, we might have some data to ponder. Don't blame it on the writer for reporting what's obvious to you (and me). but still not accepted by everyone.

The Fight for $15 operates on the faulty assumption that businesses will simply buck up and swallow the cost of rising labor expenses - that they can, essentially, already afford to pay more but simply choose not to.