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Seattle's minimum wage experience - early results
I have been attempting to make the point that people who retain their jobs with the higher minimum wage are likely to also spend more as a consequence, but in the mean time, the $15 wage puts another group of people completely out of work. This is older news as The Seattle Times reporting on an ongoing study at University of Washington, attempting to analyze the employment effects of the Seattle minimum wage increase.
“Seattle’s experience shows that the city’s low-wage workers did relatively well after the minimum wage increased, but largely because of the strong regional economy,” it says. “Although the minimum wage clearly increased wages for this group, offsetting effects on low-wage worker hours and employment muted the impact on labor earnings.”
One of our local city council members has a critique -
“I’m not only concerned that we’re in danger of drawing erroneous conclusions about Seattle’s minimum-wage increase — I’m concerned about the consequences that could have on the nationwide fight for $15 (per hour),” said Sawant, who holds a doctorate in economics and was an instructor at Seattle Central College before winning office.
... which might be particularly focused atthis result from the study, as taken from the executive summary
In a region where all low-wage workers, including those in Seattle, have enjoyed access to more jobs and more hours, Seattle’s low-wage workers show some preliminary signs of lagging behind similar workers in comparison regions.
- The minimum wage appears to have slightly reduced the employment rate of low-wage workers by about one percentage point. It appears that the Minimum Wage Ordinance modestly held back Seattle’s employment of low-wage workers relative to the level we could have expected.
- Hours worked among low-wage Seattle workers have lagged behind regional trends, by roughly four hours per week, on average.
- Low-wage individuals working in Seattle when the ordinance passed transitioned to jobs outside Seattle at an elevated rate compared to historical patterns.
Ongoing controversy suggests this is not settled so here at least is a summary from Timothy Taylor
Thus, low-wager workers in Seattle were better off as a result of the higher minimum wage if they managed to keep their job or to keep working roughly the same number of hours. But the employment rate of low-wage workers in Seattle declined slightly, as did the hours worked, which would lead to lower total earnings. As the study group notes: "The major conclusion one should draw from this analysis is that the Seattle Minimum Wage Ordinance worked as intended by raising the hourly wage rate of low-wage workers, yet the unintended, negative side effects on hours and employment muted the impact on labor earnings. ... The effects of disemployment appear to be roughly offsetting the gain in hourly wage rates, leaving the earnings for the average low-wage worker unchanged. Of course, we are talking about the average result."
Those put out of work are likely to be the ones with the fewest skills, the ones most in need of a rung on the way to gain employment experience, perhaps to be unemployed for the rest of their lives. I don't think that is the outcome we want to see, but I wonder whether the sort of analysis being done at the UW will be able to distinguish such losses against the other aggregated data.
This entry was posted on November 28th, 2016 at 20:10:00 by Adumbrator and is filed under News, employment.
