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Seattle's Minimum Wage Hike Hurts Low-Income Workers

Jack Hays

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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 The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed.On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.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." . . .





 
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"?
 
Clealy what we need to do in america is continue the half century wealth redistribution scam and things will get better.
 
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
 
https://www.washingtonpost.com/news...lly-working-just-fine/?utm_term=.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/Seattles-Minimum-Wage-Experiences-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?
 
https://www.washingtonpost.com/news...lly-working-just-fine/?utm_term=.87f104b80706



Wait what?

And another study shows pretty much the opposite?

http://irle.berkeley.edu/files/2017/Seattles-Minimum-Wage-Experiences-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.
 
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.
 
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.
 
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?
 
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?

From the link:

. . . And critics of the research pointed out what they saw as serious shortcomings. In particular, to avoid confusing establishments that were subject to the minimum with those that were not, the authors did not include large employers with locations both inside and outside of Seattle in their calculations. Skeptics argued that omission could explain the unusual results.
"Like, whoa, what? Where did you get this?" asked Ben Zipperer, an economist at the left-leaning Economic Policy Institute (EPI) in Washington.
"My view of the research is that it seems to work," he said. "The minimum wage in general seems to do exactly what it’s intended to do, and that’s to raise wages for low-wage workers, with little negative consequence in terms of job loss."

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.
As a result, the paper is likely to upend a debate that has continued among economists, politicians, businesses and labor organizers for decades. In particular, the results could exacerbate divisions among Democrats, who are seeking an economic agenda to counter President Trump's pitches for protectionism, reduced taxes and restrictions on immigration. . . .
 
From the link:

. . . And critics of the research pointed out what they saw as serious shortcomings. In particular, to avoid confusing establishments that were subject to the minimum with those that were not, the authors did not include large employers with locations both inside and outside of Seattle in their calculations. Skeptics argued that omission could explain the unusual results.
"Like, whoa, what? Where did you get this?" asked Ben Zipperer, an economist at the left-leaning Economic Policy Institute (EPI) in Washington.
"My view of the research is that it seems to work," he said. "The minimum wage in general seems to do exactly what it’s intended to do, and that’s to raise wages for low-wage workers, with little negative consequence in terms of job loss."

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.
As a result, the paper is likely to upend a debate that has continued among economists, politicians, businesses and labor organizers for decades. In particular, the results could exacerbate divisions among Democrats, who are seeking an economic agenda to counter President Trump's pitches for protectionism, reduced taxes and restrictions on immigration. . . .

Yes yes we know, the paper will be used by the corporatists to try to put slavery back on the table... after all people should not be allowed to make a living that they actually can live off!!!

Still does not change the fact, the study has massive flaws and was designed to prove that higher minimum wage is bad.
 
Yes yes we know, the paper will be used by the corporatists to try to put slavery back on the table... after all people should not be allowed to make a living that they actually can live off!!!

Still does not change the fact, the study has massive flaws and was designed to prove that higher minimum wage is bad.

There is no evidence the study was "designed" with any outcome in mind. That is just your ideological propaganda spin. Please keep in mind these are the researchers hired by the city of Seattle to track the impact of the increased minimum wage.
 
There is no evidence the study was "designed" with any outcome in mind. That is just your ideological propaganda spin. Please keep in mind these are the researchers hired by the city of Seattle to track the impact of the increased minimum wage.

"Still does not change the fact, the study has massive flaws and was designed to prove that higher minimum wage is bad."

Jack - do you think he applied the same crtitical standard to the Card- Krueger since they are liberals and in Krueger case a liberal Democrat?
 
"Still does not change the fact, the study has massive flaws and was designed to prove that higher minimum wage is bad."

Jack - do you think he applied the same crtitical standard to the Card- Krueger since they are liberals and in Krueger case a liberal Democrat?

I think he's following the scheme of the Red Queen in Alice in Wonderland: "Verdict first! Then the trial!"
 
MINIMUM WAGE
Seattle’s Minimum Wage Hike May Have Gone Too Far

By Ben Casselman and Kathryn Casteel

. . . The group’s first major report, released last year, looked at the first big increase under the law, in April 2015, in which the minimum wage went from $9.47 to $11 for large employers. The report found relatively little effect, for good or ill: The policy led to some lost jobs and hours, the report concluded, but those were more or less offset by the increased income enjoyed by workers. For workers who kept their jobs, the higher wage was a clear benefit; for low-wage workers as a whole, the impact was minimal. One reason for the muted impact: In high-cost Seattle, not many workers earned less than $11 an hour even before the law took effect.
Monday’s report looks at the impact of the second wage increase under the law: the January 2016 hike to $13 an hour for large employers. This time, the findings look very different: Compared to a counterfactual in which Seattle didn’t raise its minimum wage, the number of hours worked by low-wage workers (those earning less than $19 an hour) fell by 9.4 percent over the first nine months of 2016, and the number of low-wage jobs fell by 6.8 percent. Cumulatively, those add up to the losses of 5,000 jobs and 3.5 million hours of work. The average low-wage employee, they found, saw his or her monthly paycheck shrink by $125, or 6.6 percent. . . .

 
Clearly we need to help these low wage workers and cut their wages transferring that wealth to the "job creator" class and Wall Street so these poor souls can be more "successful".
 
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.


The study found that while wages for low-earners rose by 3 percent since the law went into effect, hours for those workers dropped by 9 percent. The average worker making less than $19 an hour in Seattle has seen a total loss of $125 a month since the law went into effect.

The "job creator" class in action.
 
There is no evidence the study was "designed" with any outcome in mind. That is just your ideological propaganda spin. Please keep in mind these are the researchers hired by the city of Seattle to track the impact of the increased minimum wage.

From the report: "The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed."

Are you still a big supporter of "Trickle Down" Reaganomics?
 
From the report: "The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed."

Are you still a big supporter of "Trickle Down" Reaganomics?

I would say I'm a supporter of whatever works.
 
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.

I saw a report on TV news. Everyone is doing great except the poor. It's a false boom.
 
Thank you for the compliment.

You are aware that Reagan was among the biggest buffoons that ever sat as prez. You are also aware that he was a war criminal and terrorist.
 
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