# Seattle Minimum Wage Under Fire
**URL:** https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042
**Category:** Great Debates
**Created:** [June 28, 2017, 8:43am UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042 "2017-06-28T08:43:20Z")
**Posts on this page:** 20
**Page:** 1
### Author:  [@Salvor](https://boards.straightdope.com/u/Salvor)
#### Post date: [June 28, 2017, 8:43am UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/1 "2017-06-28T08:43:20Z")
> **[Analysis | A ‘very credible’ new study on Seattle’s $15 minimum wage has bad...](https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/)**
>
> Seattle officials wanted to help poor workers when they voted to boost the minimum wage, but a new study says they may have done the opposite.
Interesting results so far. Turns out, the data suggests that one the minimum wage hit around 13 dollars an hour (on a path to eventually hit 15) people making under 19 dollars an hour started to lose money by reductions in hours worked and some lost jobs.
This data contradicts previous looks specifically into the restaurant scene (where business is booming in Seattle with the well to do crowd eating out more and more) via a Berkeley study.
The above study is still not perfect, but assuming the data holds up, I think it’s more obvious than ever that higher minimum wages alone are no panacea, and taken too far will actually hurt poor people more. It’s also useful that this result was from Seattle since it’s a developed urban center, not some rural backwater that would not have the same kind of local economy to support higher wages.
More testing for a UBI needs to commence, in different states. I see that as a potential solution more than ever now. The increased demand from lower income tiers might be enough of a boost to the economy on its own to generate higher low end wages by itself, but we need to test it. I’d like to see the effects across an entire city or state.
---
### Author:  [@Kimstu](https://boards.straightdope.com/u/Kimstu)
#### Post date: [June 28, 2017, 8:59am UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/2 "2017-06-28T08:59:25Z")
> [@Salvor](#):
>
> Interesting results so far. Turns out, the data suggests that one the minimum wage hit around 13 dollars an hour (on a path to eventually hit 15) people making under 19 dollars an hour started to lose money by reductions in hours worked and some lost jobs.
It is interesting, and it speaks to the need for continued research as more states and communities increase their minimum wage. It’s worth pointing out, though, that your link notes many major caveats to the findings of that UW study, which is currently still in working-paper status pending peer review:
> [@](#):
>
> Experts cautioned that the effects of the minimum wage may vary according to the industries dominant in the cities where they are implemented along with overall economic conditions in the country as a whole.
>
> And critics of the research pointed out what they saw as serious shortcomings. In particular, to avoid confusing establishments that were subject to the minimum with those that were not, the authors did not include large employers with locations both inside and outside of Seattle in their calculations. Skeptics argued that omission could explain the unusual results. […]
>
> Economists have long argued that increasing the minimum wage will force some employers to let workers go. In 1994, however, economists David Card and Alan Krueger published research on minimum wages in Pennsylvania and New Jersey that contradicted this theory […]
>
> Since then, economists have brought better data and more sophisticated statistical methods to bear on the question of the minimum wage, but without resolving the debate. […]
>
> When the authors of the study took the same approach as Card and Krueger, measuring overall employment in the restaurant industry, they found similar results. The minimum wage did not substantially affect how many people were working in the industry or how many hours they were working. […]
>
> [UW study co-author] Vigdor said that restaurateurs in Seattle – along with other employers – responded to the minimum wage by hiring more skilled and experienced workers, who might be able to produce more revenue for their firms in the same amount of time. […] “Basically, what we’re doing is we’re removing the bottom rung of the ladder,” Vigdor said.
>
> There could be another explanation for the results, however: the fact that large employers are not included. […]
>
> “I think they [the UW study authors] underestimate hugely the wage gains, and they overestimate hugely the employment loss,” said Michael Reich, an economist at the University of California, Berkeley who was part of a group that published its own study of the minimum wage in Seattle last week. […]
>
> Their results from the University of California accorded with past research. The minimum wage increased wages for workers in the restaurant industry, without reducing employment overall – in contrast to the findings from the University of Washington. […]
>
> One way of explaining the disagreement could be that small businesses in Seattle have been forced to downsize in response to the increased minimum wage, while larger firms have expanded. […]
>
> There’s another explanation for the growth in high-paid jobs and the decrease in lower-paid ones. The authors of the study argue that that’s occurring because employers are focusing on high-paid workers and leaving low-paid workers out, but it’s possible that something far more positive is happening.
>
> Seattle’s economy is booming, and in a booming economy, more workers are likely to get raises or find jobs that pay better, and it may be that phenomenon – of workers getting raises, promotions or better paying jobs – that explains the shifts in the labor market the researchers see in Seattle. […]
>
> Vigdor agreed that the effects of increasing the minimum wage could differ by time and place.
>
> “The effect of the minimum wage depends on a lot of things. It depends on where you’re starting from. It depends on what kind of economy you’re raising it in,” Vigdor said. "There is no one ‘the effect of the minimum wage.’ "
Whooo golly. It’s complicated.
---
### Author:  [@Quartz](https://boards.straightdope.com/u/Quartz)
#### Post date: [June 28, 2017, 11:59am UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/3 "2017-06-28T11:59:58Z")
That article is paywalled for me. Here are two which aren’t: [this one](https://www.fastcompany.com/40434565/a-higher-minimum-wage-is-not-doing-the-bad-things-critics-said-it-would-do) saying it’s been good; and [this one](https://fivethirtyeight.com/features/seattles-minimum-wage-hike-may-have-gone-too-far/) saying it’s bad.
---
### Author:  [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)
#### Post date: [June 28, 2017, 12:04pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/4 "2017-06-28T12:04:24Z")
It’s entirely possible that $15 is too high for Seattle and would do more harm than good. I favor a minimum wage, but I believe that increases should be quite slow and gradual with lots of pauses to check and make sure it’s not doing more harm than good.
---
### Author:  [@ultimate11](https://boards.straightdope.com/u/ultimate11)
#### Post date: [June 28, 2017, 12:25pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/5 "2017-06-28T12:25:29Z")
Simple economics, when workers get more, businesses have to pay more, they can choose to either increase prices, fire workers or lower hours.
The Seattle mayor (and most mayors) clearly should have looked at this more closely.
---
### Author:  [@Ruken](https://boards.straightdope.com/u/Ruken)
#### Post date: [June 28, 2017, 12:38pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/6 "2017-06-28T12:38:16Z")
> [@Quartz](#):
>
> That article is paywalled for me. Here are two which aren’t: [this one](https://www.fastcompany.com/40434565/a-higher-minimum-wage-is-not-doing-the-bad-things-critics-said-it-would-do) saying it’s been good; and [this one](https://fivethirtyeight.com/features/seattles-minimum-wage-hike-may-have-gone-too-far/) saying it’s bad.
Why people can’t just link to the actual fucking study instead of a news article, I do not know. Here is the working paper from the OP:
> **[njmin-aer.pdf](https://davidcard.berkeley.edu/papers/njmin-aer.pdf)**
>
> 569.30 KB
---
### Author:  [@Blalron](https://boards.straightdope.com/u/Blalron)
#### Post date: [June 28, 2017, 12:43pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/7 "2017-06-28T12:43:49Z")
I used to wholeheartedly support a $15 an hour minimum wage. Now I’m starting to wonder whether we should set it at $12 and have the government subsidize workers through a higher Earned Income Tax Credit. That would achieve the same goal of giving workers on the bottom a living wage, without the possible negative effects on employment.
---
### Author:  [@Corry\_El](https://boards.straightdope.com/u/Corry_El)
#### Post date: [June 28, 2017, 2:34pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/8 "2017-06-28T14:34:42Z")
It really is Econ 101 that a minimum wage will do more harm than good, even to the people it’s directly targeted at helping, if you raise it too high. Nobody with a brain thinks you can create equality by raising it to $40/hr.
So where does the negative effect of mandating above-market\* wages on employment begin to outweigh the benefit of a higher wage for every hour of employment that remains? But also keeping in mind that’s only part of the equation. The negative effect of higher prices for low to middle wage consumers and/or lower returns for middle income small business owners doesn’t disappear because you don’t pay attention to it. You can weigh those latter costs as lightly as you like, but they also exist.
So if at $13 in Seattle the net effect on low wage worker income turns negative (again not counting that the local price increases in _their_ fast food meals and convenience store purchases, nor the downward pressure on the income of small business owners): not exactly a shock. Further studies might duel with it, but at some level relative to local median wages this is obviously going to happen, whereas $15 is pretty much out of the air, or what the workers’ affordable consumption ‘should’ be, same thing. What somebody ‘should’ make doesn’t have much to do with the actual market value of their labor.
I read an article recently on RCP where a case was made for a national $15 min wage by a liberal think tank…but after setting up the scenario ‘say we gain control of Congress and phase in a $15 min wage in the 2020’s (or something)’. IOW by the time the wage was significantly less than $15 in today’s dollars, there wouldn’t be many negative side effects. That’s the best you can do from analytical economic POV to defend an arbitrary number like $15, especially to be imposed nationally, with no regard for local price levels much lower than eg. Seattle’s.
The way to subsidize people whose skills aren’t worth a subjectively determined ‘living wage’ is to subsidize them directly, not distort the labor market with a high minimum wage. And it’s an illusion to think the cost is higher if you explicitly subsidize rather than mandate above market wages. Again unless the min wage doesn’t exceed market by a lot for many workers, then the effect gets lost in the noise, or there are even countervailing positive effects\*. But once it’s a big raise for a lot of people/hours over the market value of their labor, expect significant negative effects from the distortion, as in the hours going down.
\*for example it might create more incentive to train workers and raise their skills, if you have to pay them more anyway. But that’s going to be less true of a lot of jobs which command low wages than ones which already command higher wages. Better trained and experienced knowledge or skilled craft workers might be many as productive as people with equal potential but no training or experience in that job. Realistically, people can learn all they need to know in many types of low wage/low skill jobs very fast and further training or experience doesn’t raise the value of that labor very much.
---
### Author:  [@puddleglum](https://boards.straightdope.com/u/puddleglum)
#### Post date: [June 28, 2017, 3:03pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/9 "2017-06-28T15:03:44Z")
> [@iiandyiiii](#):
>
> It’s entirely possible that $15 is too high for Seattle and would do more harm than good. I favor a minimum wage, but I believe that increases should be quite slow and gradual with lots of pauses to check and make sure it’s not doing more harm than good.
If it is doing harm, shouldn’t the response be to stop it instead of doing it slower?
---
### Author:  [@Chimera](https://boards.straightdope.com/u/Chimera)
#### Post date: [June 28, 2017, 3:12pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/10 "2017-06-28T15:12:56Z")
Well, first things first. The “study” has not been peer reviewed or verified by anyone else.
So here’s a block of salt to take with it.
---
### Author:  [@XT](https://boards.straightdope.com/u/XT)
#### Post date: [June 28, 2017, 3:15pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/11 "2017-06-28T15:15:32Z")
> [@Chimera](#):
>
> Well, first things first. The “study” has not been peer reviewed or verified by anyone else.
>
> So here’s a block of salt to take with it.
What flaws do you see in it?
---
### Author:  [@Chimera](https://boards.straightdope.com/u/Chimera)
#### Post date: [June 28, 2017, 3:51pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/12 "2017-06-28T15:51:02Z")
There’s already an article out saying the opposite.
Let’s wait for more data.
---
### Author:  [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)
#### Post date: [June 28, 2017, 4:07pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/13 "2017-06-28T16:07:19Z")
> [@Ruken](#):
>
> Why people can’t just link to the actual fucking study instead of a news article, I do not know. Here is the working paper from the OP:
> [http://davidcard.berkeley.edu/papers/njmin-aer.pdf](http://davidcard.berkeley.edu/papers/njmin-aer.pdf)
It drives me nuts too. Thanks for the good link.
---
### Author:  [@Procrustus](https://boards.straightdope.com/u/Procrustus)
#### Post date: [June 28, 2017, 4:15pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/14 "2017-06-28T16:15:20Z")
> [@ultimate11](#):
>
> Simple economics, when workers get more, businesses have to pay more,\*\* they can choose to either increase prices, fire workers or lower hours\*\*.
>
> .
Bolding added. You forgot “take less profit.” Not an option for every business, but certainly it would be for some.
---
### Author:  [@treis](https://boards.straightdope.com/u/treis)
#### Post date: [June 28, 2017, 4:28pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/15 "2017-06-28T16:28:59Z")
> [@Ruken](#):
>
> Why people can’t just link to the actual fucking study instead of a news article, I do not know. Here is the working paper from the OP:
> [http://davidcard.berkeley.edu/papers/njmin-aer.pdf](http://davidcard.berkeley.edu/papers/njmin-aer.pdf)
Chain fast food restaurants have got to be the worst employers to examine for local minimum wage effects. The way those restaurants produce food is more or less determined at the national/corporate level. An individual Burger King in an area with a high minimum wage doesn’t have the flexibility of say cutting a labor intensive menu item because it’s now unprofitable. They are also run about as labor efficiently as they can possibly get. So there’s little wiggle room to cut staff. Nor can you just relocate your franchise to a lower waged area because you have to locate where your customers are.
---
### Author:  [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)
#### Post date: [June 28, 2017, 4:42pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/16 "2017-06-28T16:42:39Z")
> [@Chimera](#):
>
> Well, first things first. The “study” has not been peer reviewed or verified by anyone else.
>
> So here’s a block of salt to take with it.
BOOM!
OP: come back when you have something solid to talk about.
---
### Author:  [@Snowboarder\_Bo](https://boards.straightdope.com/u/Snowboarder_Bo)
#### Post date: [June 28, 2017, 5:03pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/17 "2017-06-28T17:03:39Z")
> [@Procrustus](#):
>
> Bolding added. You forgot “take less profit.” Not an option for every business, but certainly it would be for some.
Whoa WHOA whoa! That’s crazy talk! Let’s all just calm down before somebody says something they can’t take back!
😃
---
### Author:  [@Bone](https://boards.straightdope.com/u/Bone)
#### Post date: [June 28, 2017, 5:43pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/18 "2017-06-28T17:43:32Z")
> [@up\_the\_junction](#):
>
> BOOM!
>
> OP: come back when you have something solid to talk about.
Do not threadshit. Suggesting that the topic of a thread is not worthy of discussion, or that a topic is pointless is threadshitting.
[/moderating]
---
### Author:  [@CarnalK](https://boards.straightdope.com/u/CarnalK)
#### Post date: [June 28, 2017, 5:47pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/19 "2017-06-28T17:47:50Z")
> [@ultimate11](#):
>
> Simple economics, when workers get more, businesses have to pay more, they can choose to either increase prices, fire workers or lower hours.
>
> The Seattle mayor (and most mayors) clearly should have looked at this more closely.
Kind of hilarious. It’s a matter of great debate amongst professional economists who argue over a multitude of conflicting factors but to you, it’s simple and most mayors don’t know your simple obvious fact. You don’t think that perhaps you’re being hilariously and undeservingy arrogant?
---
### Author:  [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)
#### Post date: [June 28, 2017, 5:55pm UTC](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042/20 "2017-06-28T17:55:54Z")
> [@Bone](#):
>
> Do not threadshit. Suggesting that the topic of a thread is not worthy of discussion, or that a topic is pointless is threadshitting.
>
> [/moderating]
If it isn’t peer reviewed why isn’t it in IMHO?
[Next page](https://boards.straightdope.com/t/seattle-minimum-wage-under-fire/790042.md?page=2)