Shocker: Preliminary Report Shows Seattle's $15 Minimum Wage Laws Actually Screwed Over Workers

Matt Vespa
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Posted: Jun 26, 2017 6:00 PM
Shocker: Preliminary Report Shows Seattle's $15 Minimum Wage Laws Actually Screwed Over Workers

Addendum: Guy has a more in-depth post here. It should also be noted that it seems the City of Seattle knew that the report featured below by the University of Washington was going to throw more mud on their precious minimum wage initiative, so they sought more friendlier data crunchers because well, they didn’t like people telling them they don’t know economics (via Seattle Weekly):

There’s an old joke that economics is the only field where two people can win the Nobel Prize for saying the exact opposite thing. However, by all appearances these two takeaways on Seattle’s historic minimum wage law are not a symptom of the vagaries of a social science but an object lesson in how quickly data can get weaponized in political debates like Seattle’s minimum wage fight. In short, the Mayor’s Office knew the unflattering UW report was coming out, and reached out to other researchers to kick the tires on what threatened to be a damaging report to a central achievement of Ed Murray’s tenure as mayor.

[…]

To review, the timeline seems to have gone like this: The UW shares with City Hall an early draft of its study showing the minimum wage law is hurting the workers it was meant to help; the mayor’s office shares the study with researchers known to be sympathetic toward minimum wage laws, asking for feedback; those researchers release a report that’s high on Seattle’s minimum wage law just a week before the negative report comes out.

[…]

Those reports have previously grated advocates of the $15 minimum wage. In September, Coucilmember Kshama Sawant took the research group to task for various aspects of a report from last July, which Sawant argued cast the wage law in a poor light due to bad methodology and accused the director of the study, Jacob Vigdor, of “idelogical editorializing.”

In a brief interview Monday, Vigdor defended the group’s most recent study, saying it was based on far more granular data than the Berkeley team had access to. Specifically, the state provides his group special access to individual worker data while the Berkeley researchers have a “public use data set, which is basically a bunch of … summaries of this data.”

“Ours has a lot more details and depth to it, because we’re looking at individual workers,” he said.

Asked whether he thought the Berkeley report was a ploy by City Hall to preempt their report, Vigdor said: “I’m not going to comment on that.”

***Original Post***

Seattle’s minimum wage experiment has only resulted in fewer hours, less money, and fewer jobs for workers, according to a preliminary report by the National Bureau of Economic Research by researchers were from the University of Washington. Seattle passed the $15/hour passed in minimum wage hike in 2014. It’s supposed to be $15 in 2018; it’s currently $11 now. Yet, even at $11/hour, workers also had fewer hours and job opportunities. In all, it seems all of this was rather predictable (via Seattle Times) [emphasis mine]:

The UW team published its first report last July on the impact of the first jump in Seattle’s minimum wage, which went in April 2015 from $9.47 to $10 or $11 an hour, depending on business size, benefits and tips.

This latest study from the UW team looks at the effects of both the first and second jumps. The second jump, in January 2016, raised the minimum wage to $10.50 to $13. (The minimum wage has since gone up again, to the current $11 to $15. It goes up again in January to $11.50 to $15.)

The team concluded that the second jump had a far greater impact, boosting pay in low-wage jobs by about 3 percent since 2014 but also resulting in a 9 percent reduction in hours worked in such jobs. That resulted in a 6 percent drop in what employers collectively pay — and what workers earn — for those low-wage jobs.   

For an average low-wage worker in Seattle, that translates into a loss of about $125 per month per job.

 We’ve known for a while that minimum wage hikes kill jobs. In 2013, over 700,000 jobs were lost, with American Action Forum calculating that every $1 increase amounted to a 1.48 percent increase in the unemployment rate.