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Seattle's Minimum Wage Hike Hurts Low-Income Workers

Skeptic Bob said:
I look forward to some unbiased peer review and seeing a well structured study that includes all types of employers. Right now it doesn't look great for smaller business owners.
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This.

The fact that this study isn't peer reviewed, and omits a large swathe of employers and low wage workers means it does not arrive at convincing or satisfactory conclusions about the net impact of the minimum wage increase.
 
Surrealistik said:
This.

The fact that this study isn't peer reviewed, and omits a large swathe of employers and low wage workers means it does not arrive at convincing or satisfactory conclusions about the net impact of the minimum wage increase.
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From the OP link:

Economists might not readily dismiss the new study as an outlier, however. The paper published Monday makes use of more detailed data than have been available in past research, drawing on state records of wages and hours for individual employees.

The complaints cited are actually just politically-derived excuses.
 
Jack Hays said:
From the OP link:

Economists might not readily dismiss the new study as an outlier, however. The paper published Monday makes use of more detailed data than have been available in past research, drawing on state records of wages and hours for individual employees.

The complaints cited are actually just politically-derived excuses.
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Not at all.

It is factually not peer reviewed, and it specifically omits multi-location/branch employers which constitute a large and substantial, perhaps even majority chunk of low-wage positions.

In order to arrive at a satisfactory conclusion on the impacts of min wage increases, a study needs to both survive the peer review process, and encompass the entirety or at least great majority of low-wage employers (among other things; these are the most prominent sins in relation to this specific study); showing a correlation between an increase in min wage and a reduction in net compensation (hours worked times wage per hour) for a subset of low wage workers is only just that. You also should at least try to control for things like low-wage jobs being reinvented into higher wage jobs that might be excluded from standard measurements and so on.
 
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Surrealistik said:
Not at all.

It is factually not peer reviewed, and it specifically omits multi-location/branch employers which constitute a large and substantial, perhaps even majority chunk of low-wage positions.

In order to arrive at a satisfactory conclusion on the impacts of min wage increases, a study needs to both survive the peer review process, and encompass the entirety or at least great majority of low-wage employers (among other things; these are the most prominent sins in relation to this specific study); showing a correlation between an increase in min wage and a reduction in net compensation (hours worked times wage per hour) for a subset of low wage workers is only just that. You also should at least try to control for things like low-wage jobs being reinvented into higher wage jobs that might be excluded from standard measurements and so on.
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We shall see.
 
Jack Hays said:
Your link was to the OP link. As pointed out earlier in the thread, the Berkeley study was a rush job of political first aid requested by Seattle's mayor when he learned his own researchers were about to turn in a negative assessment.
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The Berkeley Study, (https://www.washingtonpost.com/nati...480040-55f4-11e7-840b-512026319da7_story.html) confirms what other studies about the minimum wage cite, namely, that raising it does not impact jobs.

The way the OP's study went, it measured changes in small businesses but didn't measure changes in big businesses. So, if someone left being a busboy in a restaurant and got a job at WalMart, they were counted as a net loss of one job, instead of even.
 
Jack Hays said:
Ahem. Your ideology is showing. From the OP link:

"This strikes me as a study that is likely to influence people," said David Autor, an economist at the Massachusetts Institute of Technology who was not involved in the research. He called the work "very credible" and "sufficiently compelling in its design and statistical power that it can change minds."
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The ?high road? Seattle labor market and the effects of the minimum wage increase: Data limitations and methodological problems bias new analysis of Seattle?s minimum wage increase | Economic Policy Institute

“the employment responses estimated by the authors are well outside the bounds of most published research.”

This isn't the first time this subject has been studied buddy. All the other evidence proves you wrong, so I wouldn't cling to hope over one random study.
 
Jack Hays said:
We shall see.
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Yes, you shall. That's how science works. You study things repeatedly over time to arrive at an answer. And as I've pointed out..... we have raised the minimum wage in this country more than 20 times since the 1930's, and yet here we are today with sub 5% unemployment rate which is generally considered full employment.
 
MrWonka said:
The ?high road? Seattle labor market and the effects of the minimum wage increase: Data limitations and methodological problems bias new analysis of Seattle?s minimum wage increase | Economic Policy Institute

“the employment responses estimated by the authors are well outside the bounds of most published research.”

This isn't the first time this subject has been studied buddy. All the other evidence proves you wrong, so I wouldn't cling to hope over one random study.
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A labor propaganda mill.

Economic Policy Institute - Wikipedia

https://en.wikipedia.org/wiki/Economic_Policy_Institute


The EPI describes itself as a non-partisan think tank that "seeks to include the needs of low- and middle-income workers in economic policy discussions". It is affiliated with the labor movement, and is usually described as presenting a liberal viewpoint on public policy issues.‎History · ‎Areas of research · ‎EPI projects · ‎Policy proposals

The Economic Policy Institute is a 501(c)(3) non-profit American think tank based in Washington, D.C. that carries out economic research and analyzes the economic impact of policies and proposals. The EPI describes itself as a non-partisan think tank that "seeks to include the needs of low- and middle-income workers in economic policy discussions".[SUP][2][/SUP] It is affiliated with the labor movement,[SUP][3][/SUP] and is usually described as presenting a liberal[SUP][4][/SUP] viewpoint on public policy issues. The EPI has a sister organization, the EPI Policy Center, which is a 501(c)(4) organization for advocacy and education. The EPI advocates for policies favorable for low- to moderate-income families in the United States.[SUP][5][/SUP] The EPI also assesses current economic policies and proposes new policies that EPI believes will protect and improve the living standards of working families.[SUP][2][/SUP]

 
MrWonka said:
Yes, you shall. That's how science works. You study things repeatedly over time to arrive at an answer. And as I've pointed out..... we have raised the minimum wage in this country more than 20 times since the 1930's, and yet here we are today with sub 5% unemployment rate which is generally considered full employment.
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Incremental increases over decades are not to be confused with Seattle's unprecedented and sudden leap.
 
MTAtech said:
The Berkeley Study, (https://www.washingtonpost.com/nati...480040-55f4-11e7-840b-512026319da7_story.html) confirms what other studies about the minimum wage cite, namely, that raising it does not impact jobs.

The way the OP's study went, it measured changes in small businesses but didn't measure changes in big businesses. So, if someone left being a busboy in a restaurant and got a job at WalMart, they were counted as a net loss of one job, instead of even.
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Again, a rush job trotted out to provide cover for Seattle's mayor.
 
Jack Hays said:
"Facts" certainly change. "Lies, damn lies and statistics." --Mark Twain
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Facts don't change, the context of the facts change, and the facts your siting have been demonstrated to be almost certainly taken well out of context.
 
MrWonka said:
Facts don't change, the context of the facts change, and the facts your siting have been demonstrated to be almost certainly taken well out of context.
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The research team, which is ideologically diverse and was hired by Seattle to track the effects of the increase, had no reason to skew the data. You're just trying to trash an outcome that doesn't fit your partisan agenda.
 
Lessons from Seattle's Courageous Minimum-Wage Experiment
Long & Plotnick, ST

. . . What are the lessons of these findings for policymakers? We see three.
First, our findings should give some pause to other local governments that are considering setting a local minimum wage significantly above their state’s minimum wage. While we are surprised by the magnitude of the estimated loss in hours, we are not surprised to see some loss of low-wage employment caused by a local minimum wage. It is easier to relocate low-wage employment outside city boundaries than it is to relocate employment outside a state or country. Consequently, we should expect greater employment losses from a local minimum wage than from a state or national minimum wage. This means, in turn, that one should not assume our specific findings generalize to minimum-wage policies set at the state or federal level.

Second, local and state governments can use numerous other public policies to reduce inequality and promote economic opportunity. These include additional funding for pre-K child education and care, K-12 and higher education, apprenticeship programs, earned income tax credits and tax reform.

Third, just because one social experiment appears to be yielding disappointing effects to date is no reason to stop experimenting. Seattle, the state of Washington, and the nation face many challenging, long-standing social problems. Only by trying new ideas and carefully assessing their impacts can we hope to improve the social well-being of the nation.
Seattle has provided entrepreneurial leadership in many areas of social policy. We commend the city’s leaders for providing this policy leadership and having the willingness to fund research to evaluate impacts of policy changes. While the findings sometimes disappoint advocates for the policy, good governance relies on being receptive to new information and a willingness to adapt, if necessary.




 




This city is the capital of alternative facts


. . . Three years ago, the city council, adhering to another current tenet of progressivism, voted — unanimously, of course — to increase the city’s minimum wage incrementally from $9.47 to $15 an hour. The council rejected the contention that when the price of entry-level labor increases, employers buy less of it. The city commissioned a study from six University of Washington economists ranging from left to right, presumably expecting their findings to be congruent with other studies purporting to show that the demand for such labor, unlike the demand for sugary sodas, is price-inelastic. (And unlike in Denmark, where the minimum wage increases 40 percent when a worker turns 18, and the employment of young workers declines one-third.)
The University of Washington study, however, published as a working paper by the National Bureau of Economic Research, concluded that the costs to low-wage Seattle workers have been three times larger than the benefits. Using a richer trove of data and more sophisticated statistical methods than have been available for other studies of minimum wages, the report concluded that Seattle’s still-advancing increase has cost more than 5,000 jobs and that workers whose wages were increased to comply with the new minimum lost an average of $125 a month as employers reduced their hours. Although total employment in the restaurant industry, which hires a substantial portion of minimum-wage workers, did not decline, employers replaced less skilled, low- productivity workers with others able to produce higher-value work products. As one of the study’s authors said, “Basically, what we’re doing is we’re removing the bottom rung of the ladder.”
The city responded by seeking alternative facts. Forewarned about the six economists’ conclusions, it sought more congenial findings from some economists at the University of California at Berkeley, who are known for research that supports the agenda of the national “Fight for $15” movement. The Berkeley economists were so prompt that their findings were publicized before the University of Washington economists’ report was released.
Seattle’s city council is as undeterred by constitutional and statutory language as it is by social science. In July, it enacted — unanimously, of course — a city income tax, setting the tax rate on incomes below $250,000 at zero and a 2.25 percent rate on individuals’ incomes above $250,000 and on household incomes above $500,000. Washington, which has no state income tax, has a law that says: “A county, city or city-county shall not levy a tax on net income.” . . .













 
Jack Hays said:




This city is the capital of alternative facts


. . . Three years ago, the city council, adhering to another current tenet of progressivism, voted — unanimously, of course — to increase the city’s minimum wage incrementally from $9.47 to $15 an hour. The council rejected the contention that when the price of entry-level labor increases, employers buy less of it. The city commissioned a study from six University of Washington economists ranging from left to right, presumably expecting their findings to be congruent with other studies purporting to show that the demand for such labor, unlike the demand for sugary sodas, is price-inelastic. (And unlike in Denmark, where the minimum wage increases 40 percent when a worker turns 18, and the employment of young workers declines one-third.)
The University of Washington study, however, published as a working paper by the National Bureau of Economic Research, concluded that the costs to low-wage Seattle workers have been three times larger than the benefits. Using a richer trove of data and more sophisticated statistical methods than have been available for other studies of minimum wages, the report concluded that Seattle’s still-advancing increase has cost more than 5,000 jobs and that workers whose wages were increased to comply with the new minimum lost an average of $125 a month as employers reduced their hours. Although total employment in the restaurant industry, which hires a substantial portion of minimum-wage workers, did not decline, employers replaced less skilled, low- productivity workers with others able to produce higher-value work products. As one of the study’s authors said, “Basically, what we’re doing is we’re removing the bottom rung of the ladder.”
The city responded by seeking alternative facts. Forewarned about the six economists’ conclusions, it sought more congenial findings from some economists at the University of California at Berkeley, who are known for research that supports the agenda of the national “Fight for $15” movement. The Berkeley economists were so prompt that their findings were publicized before the University of Washington economists’ report was released.
Seattle’s city council is as undeterred by constitutional and statutory language as it is by social science. In July, it enacted — unanimously, of course — a city income tax, setting the tax rate on incomes below $250,000 at zero and a 2.25 percent rate on individuals’ incomes above $250,000 and on household incomes above $500,000. Washington, which has no state income tax, has a law that says: “A county, city or city-county shall not levy a tax on net income.” . . .













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Ouch!,
I wondered if they mentioned that rents have increased at almost the same rate as the minimum wage.
Rents were raising anyway, but now the market can bare more.
 
longview said:
Ouch!,
I wondered if they mentioned that rents have increased at almost the same rate as the minimum wage.
Rents were raising anyway, but now the market can bare more.
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There are too many people who believe that wishing can make it so.
 
longview said:
Well at least the evil land lords are seeing some relief.
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This is the same issue that parts of CA are having with the huge move in the IT industry. Wages soared through the roof and so did rent and development.
it priced a ton of people out of the area as land lord raised rent to match the wages people were making.
 
ludin said:
This is the same issue that parts of CA are having with the huge move in the IT industry. Wages soared through the roof and so did rent and development.
it priced a ton of people out of the area as land lord raised rent to match the wages people were making.
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The other side is that since Washington state does not have an income tax, one has to assume they are heavy
on ether property taxes or sales taxes.
I suspect the State or City found a way to extract their pound of flesh from the increased wages and rents.
 
longview said:
The other side is that since Washington state does not have an income tax, one has to assume they are heavy
on ether property taxes or sales taxes.
I suspect the State or City found a way to extract their pound of flesh from the increased wages and rents.
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The official state tax is 6.5% but cities can add their own so it can go to 8% but it doesn't include food or other essential items.

their property taxes are huge. 9-10 dollars per 1000 accessed.
that is wildly expensive.
 
ludin said:
The official state tax is 6.5% but cities can add their own so it can go to 8% but it doesn't include food or other essential items.

their property taxes are huge. 9-10 dollars per 1000 accessed.
that is wildly expensive.
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I have heard the song and dance, the cities do not increase the rate of the tax, but the revenue
increases because the assessment increases.
The added cost, if to a landlord, are reflected in the rents.
In many cases the normal homeowner is limited by how much the assessment can increase annually,
but usually commercial property (rental) has not such limitations.
I wonder how much of Seattle's minimum wage increase, ended up back in the cities budget, as increased tax revenue?
 
longview said:
I have heard the song and dance, the cities do not increase the rate of the tax, but the revenue
increases because the assessment increases.
The added cost, if to a landlord, are reflected in the rents.
In many cases the normal homeowner is limited by how much the assessment can increase annually,
but usually commercial property (rental) has not such limitations.
I wonder how much of Seattle's minimum wage increase, ended up back in the cities budget, as increased tax revenue?
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probably quite a bit as withholding and payroll taxes go up when it comes to that stuff as well.
 
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