That new Seattle study is a big problem for fans of a higher minimum wage — or is it? – Los Angeles Times
No two ways about it: The University of Washington’s new study of the jobs effect of Seattle’s higher minimum wage spells trouble for supporters of minimum wage increases.
That’s not merely because the study released Monday found a steep reduction in jobs and income among the city’s lowest-paid workers following the minimum wage raise to $13 an hour in January 2016, on its way to a nation-leading $15 for most employers within four years. It also found a strong increase in employment of workers earning more than $19 an hour. In the restaurant sector, for instance, the study found a 10.7% reduction in jobs paying less than $19, but no overall change in employment, implying that jobs paying more than $19 increased by 20%.
As my colleague Natalie Kitroeff observes, the findings are likely to cause shudders among the promoters of the minimum wage increase in Los Angeles, which will rise to $12 on Saturday and reach $15 for all but the smallest employers by July 1, 2020. That’s because it seems to suggest that, even if a modest raise in the minimum wage — say to $12 or $13 — won’t cost jobs, a bigger increase will.
The real problem with the Washington report, however, isn’t economic but political: The UW economic team that produced it has been held up as the ultimate arbiter on the effect of Seattle’s minimum wage.
The group’s initial report, issued last July and covering the first phase of the wage increase in April 2015 to as much as $11 an hour, found that the city’s low-wage workers earned more, but that effect was muted by reduced hours, and the effects canceled each other out almost completely. This was hailed by the minimum wage lobby as a data point in its favor, especially because it was supplemented by a finding that the higher minimum wage hadn’t driven employers out of business. You don’t hear such huzzahs this time around, when the core takeaway from the report is that “the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016.”