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Thread: Seattle's Minimum Wage Hike Hurts Low-Income Workers

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    Seattle's Minimum Wage Hike Hurts Low-Income Workers

    This is not a surprising result. If workers cost more then employers will hire fewer of them.




    When Seattle officials voted three years ago to incrementally boost the city's minimum wage up to $15 an hour, they'd hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.
    The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.
    The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed.On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
    The paper's conclusions contradict years of research on the minimum wage. Many past studies, by contrast, have found that the benefits of increases for low-wage workers exceed the costs in terms of reduced employment -- often by a factor of four or five to one.
    "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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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    This was easily predictable and will accelerate the automation of many "entry level" positions. The up side is that one still gets more per hour if they can find any entry level work but the down side is that entry level work is harder to get. One may elect to use a lawn service if that costs $30 but may well decide to either do that "chore" themselves or have a neighborhood kid do it "off the books" if that price is bumped (by mandate) to $50. The article did not address whether "safety net" costs went up, down or remained the same - in other words, did this mandate actually change "poverty"?
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    Clealy what we need to do in america is continue the half century wealth redistribution scam and things will get better.

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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    Quote Originally Posted by Jack Hays View Post
    This is not a surprising result. If workers cost more then employers will hire fewer of them.




    When Seattle officials voted three years ago to incrementally boost the city's minimum wage up to $15 an hour, they'd hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.
    The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.
    The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed.On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
    The paper's conclusions contradict years of research on the minimum wage. Many past studies, by contrast, have found that the benefits of increases for low-wage workers exceed the costs in terms of reduced employment -- often by a factor of four or five to one.
    "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." . . .





    There's a bit more to it that all that, I fear.

    The City Knew the Bad Minimum Wage Report Was Coming Out, So It Called Up Berkeley | Seattle Weekly
    Well, he see this one particularly hot chick and not does she bag he slackjawed, but he lets a "Whoa" slip out

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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    Quote Originally Posted by Tanngrisnir View Post
    Apparently the mayor will keep asking for academics' views until he finds one he likes. Ironic that he's looking for counters to the views of the people he himself originally engaged.
    "It's always reassuring to find you've made the right enemies." -- William J. Donovan

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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    https://www.washingtonpost.com/news/...=.87f104b80706

    Two years after Seattle began increasing its minimum wage (for most businesses with 500 or more employees, it’s headed to $15 an hour next year), Seattle’s economy is as strong as ever. The Seattle unemployment rate in April, for example, was 2.6 percent, the lowest it has been in nine years.
    Wait what?

    And another study shows pretty much the opposite?

    http://irle.berkeley.edu/files/2017/...es-2015-16.pdf

    So which has more validity? Well not the OP one if this is true..

    First, their data exclude workers at businesses that have more than one location; in other words, while workers at a standalone mom-and-pop restaurant show up in their results, workers at Starbucks and McDonald’s don’t.
    That is 40% of businesses they just exclude? And then they also dont provide their whole data set .. err why is that?

    Funny thing about "higher minimum wage"... means people suddenly have more money and they actually use said money, that stimulates the economy.... who would have thought that?
    PeteEU

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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    Quote Originally Posted by PeteEU View Post
    https://www.washingtonpost.com/news/...=.87f104b80706



    Wait what?

    And another study shows pretty much the opposite?

    http://irle.berkeley.edu/files/2017/...es-2015-16.pdf

    So which has more validity? Well not the OP one if this is true..



    That is 40% of businesses they just exclude? And then they also dont provide their whole data set .. err why is that?

    Funny thing about "higher minimum wage"... means people suddenly have more money and they actually use said money, that stimulates the economy.... who would have thought that?
    I suggest you review the link provided in #4. The Berkeley study was was a rush-job of political first-aid requested by Seattle's mayor when he found out the researchers Seattle had engaged were bringing out a negative report.
    "It's always reassuring to find you've made the right enemies." -- William J. Donovan

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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    Did anyone else notice the bias of these universities? Seriously, who in the **** cares what the University of California finds on Minimum wage? Oh I'm sorry, what did the obviously biased university have to say about a topic they support? Oh, it's awesome in every way? Well, that was unexpected.

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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    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.
    Formerly BrewerBob

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    Re: Seattle's Minimum Wage Hike Hurts Low-Income Workers

    Quote Originally Posted by Jack Hays View Post
    I suggest you review the link provided in #4. The Berkeley study was was a rush-job of political first-aid requested by Seattle's mayor when he found out the researchers Seattle had engaged were bringing out a negative report.
    Yes so claim the anti-high minimum wage crowd. Still does not change the fact that the OP study does not provide all data sets and control sets, but most worryingly, excludes multi-location businesses... why? That would be like saying teen pregnancy in the US is low because we only surveyed whites in areas of the US that have incomes over 50k... I mean wtf?
    PeteEU

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