Last week, Seattle Mayor Ed Murray marked the 3rd anniversary of the city’s minimum wage hike, but a new University of Washington study shows there is little to celebrate for many of Seattle’s employers and employees. The report finds Seattle’s incoming $15 minimum wage has reduced hours, earnings and jobs for entry-level employees:
“Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. 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.”
To put this reduction in hours in context, the number of hours worked in Seattle for those in low-wage jobs fell by 3.5 million hours per calendar quarter. Employees in Seattle are losing more than they gain: While they see a bump in hourly pay, that bump isn’t translating into more money in their bank account each pay period because they’re working fewer hours–or no hours at all.
EPI profiled one affected Seattle business in a recent video. The owners were forced to slash staffing levels in response to the city’s new wage mandates.
Policymakers should heed the words of David Autor of MIT, one of the country’s leading labor economists, who reviewed the paper before it was published:
“This is a study that has the power to move people’s beliefs. It will have a substantial impact on the debate,” said David Autor of MIT, one of the country’s leading labor economists, who reviewed the paper before it was published. “It suggests we should be proceeding cautiously when we start pushing minimum wages into ranges where they are pretty significant.”