Seattle’s Minimum Wage Hike Hurting Hours, Employment

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Politics Chatboard

Seattle's Minimum Wage Hike Hurting Hours, Employment

by EasTexSteve

Jun 26, 2017

Not all is rosy in Seattle as the city gradually pushes to raise the minimum wage to $15 per hour, according to a new study that suggests hiring and the number of hours worked among lower-wage employees took a hit last year as minimum pay rose.

The National Bureau of Economic Research unveiled a working paper on Monday that found the number of hours worked in low-skill professions dropped more than 9 percent in Seattle during the first three quarters of last year, while low-wage jobs declined by 6.8 percent, or by more than 5,000 positions.

https://www.usnews.com/news/articles/2017-06-26/study-seattles-minimum-wage-hike-hurting-hours-employment

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T.E.C. - Iowa This is an interesting study, and does need to be noted as such! However, there are some issues that need to be added to the mix.

1. "The idea that employers forced to pay higher wages to unskilled workers would eliminate jobs to keep their payroll from going over budget seems logical enough. But over the years, most studies of minimum wag...See MoreThis is an interesting study, and does need to be noted as such! However, there are some issues that need to be added to the mix.

1. "The idea that employers forced to pay higher wages to unskilled workers would eliminate jobs to keep their payroll from going over budget seems logical enough. But over the years, most studies of minimum wages and jobs have shown that doesn't happen."

2. "To avoid including employers that might not be subject to the new law, the UW researchers left out companies (like) Boeing, Microsoft, and Amazon. Amazon is a particularly meaningful omission because the bulk of its local jobs are within the city, and its warehouses employ large numbers of unskilled workers who might be directly affected by the new law. The online retailer is expanding rapidly in Seattle, building new offices and warehouses. It currently has 30,000 employees working in the city, and is trying to hire another 10,000."

Studying minimum wage law effects without including large companies completely skews the results, the (other) researchers argue

3. "UW's methodology is how it defines a low-paid worker, as someone earning $19 or less per hour. That threshold makes sense in that it would seem to leave out most people not affected by the minimum wage. On the other hand, the (other) researchers argue, some of the low-wage earners in the study may be getting work that pays more than that amount, which would also fail to show up."

4. "There's the question of what would have happened to wages and employment if the minimum wage hadn't been raised. Research such as this tends to assume everything would have remained unchanged, but given the rapidly evolving local economy, that probably isn't true here. Seattle is unique!"

Employers will always try to minimize the number of workers they need. IMHO, the increase in minimum wage is causing employers to experiment with fewer workers. Some of those experiments will fail, and those that succeed would have happened anyway.

Yet, the biggest point seems to be that increases in the minimum wage on a state wide level may be a bad idea. The part about Seattle being unique is true, and we see the same issue in Iowa. The rural areas cannot deal with the minimum wage paid in the capital. Yet, our Republican legislature in Iowa just passed a law saying that counties and cities may not have their own unique minimum wage.

In the end, we need to do more studies and look to see which side is corroborated.

All quotes are from the article, "Researchers 'Prove' Seattle's $15 Minimum Wage Kills Jobs--but Ignore the Existence of Amazon

Jun 28, 2017

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