New study casts doubt on the benefit of Seattle's $15 minimum wage

Seattle Councilwoman Kshama Sawant spearheaded rallies for a $15 minimum wage in Seattle

Seattle Councilwoman Kshama Sawant spearheaded rallies for a $15 minimum wage in Seattle. Credit KUOW File

Researchers say that while the new law is indeed resulting in higher wages, employers have reduced hiring and hours, reports the Seattle Times.

"Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees' earnings by an average of $125 per month in 2016", the group of economists at University of Washington wrote in the study.

"There is a large body of research that shows that modest increases in the minimum wage boost wages for low income workers without causing job loss, and nothing in the UW study suggests we should revise those conclusions", the Economic Policy Institute's Ben Zipperer said in a statement. Which brings us to Seattle's hard-left city counsel - home to such lovely characters as this woman - deciding in 2014 to ignore pleas from the business community and hike the minimum wage within their jurisdiction to $15 per hour. The first jump came in April 2015 after the Seattle City Council approved a bill to increase wages to $15 for everyone by 2021. The University of California, Berkeley, found in a study June 20 that the Seattle policy helped to increase wages while having little impact on employment.

The loss in hours easily negated the benefits of higher wages, reducing the average low-wage restaurant worker's paycheck by 6.6% a month. Many variables affect what a company pays workers and in a healthy economy those effects are less pronounced. The EPI study, for instance, notes the estimated job loss is even well above other critical reports. To build the model, the researchers compared the city to other communities that didn't increase their minimum wage, but they were limited to Washington, where other hourly wage data was available. However, it is deemed credible and detailed by economists and was contracted by the same city that mandated the hike in minimum wage. And they argued that the food service industry would be the most adversely affected. (It's now $13 for most businesses.) While advocates may be thrilled, a new study out of the University of Washington suggests that the rising minimum might actually be harming low-income workers in general. This means that the question of how high the minimum wage can go is an empirical one-and there's no special reason to think it's $15.

Employers with 25 or fewer employees or nonprofit corporations with 26 or more employees with approval to pay a deferred rate will go from $10 an hour to $10.50.

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The law also cost the city 5,000 jobs, the report said.

"You see the biggest difference in the effect when the minimum wage increased from $11 to $13", Mark C. Long, one of the study's authors, tells the Times.

Yet other executives in the fast-food business, including Andy Puzder, President Trump's first nominee for Labor secretary, say the industry is headed in that direction in part to keep labor costs down. Employers could be forced to reduce their staff or increase prices to overcome the added cost of labor. Many employers have multiple sites, some inside Seattle and some outside, and they have the option of reporting data for all their operations at once, instead of separately for each location.

As The Columbian has asserted editorially in the past, the most effective way for an employee to increase their wages is to develop skills that employers find desirable.

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