Seattle's $15 Minimum Wage May Be Hurting Workers, Report Finds (usatoday.com)

As companies look for ways to cut costs, Seattle's $15 minimum wage law may be hurting hourly workers instead of helping them, according to a new report. From a USA Today article: A report (PDF) from the University of Washington (UW), found that when wages increased to $13 in 2016, some companies may have responded by cutting low-wage workers' hours. The study, which was funded in part by the city of Seattle, found that workers clocked 9 percent fewer hours on average, and earned $125 less each month after the most recent increase. "If you're a low-skilled worker with one of those jobs, $125 a month is a sizable amount of money," Mark Long, a UW public-policy professor and an author of the report told the Seattle Times. "It can be the difference between being able to pay your rent and not being able to pay your rent."

Comments

Typical...

[Anonymous Coward]

If goes from "The science is settled!" to "may be doing something" when the results don't fit the popular narrative.

and you wonder how people can be skeptical? Geesh.

Re: Typical...

[Anonymous Coward]

Thomas Sowell (based Harvard / Stanford economist and academic) has researched this to death using actual data, minimum wage creates fewer jobs. Listen to his explanation https://youtu.be/6TGkfjaxFWs. He started as a Marxist until he actually did some research.

Please watch the video or even read his research, this isn't the answer.

Re: Typical...

[Anonymous Coward]

The solution is obvious to pay workers nothing, thus guaranteeing infinite work.

Re: Typical...

[GLMDesigns]

Why don't you stick it to the man and demand that everyone gets $100.00 / hr. That'll show them.

/sarc

Here's the f**king problem - reformulating the minimum wage to being a "living" wage hurts those with a low skill set.

Part of keeping a job is

- showing up every day
- showing up on time every day
- showing the will to this day in and day, week in and week out
- being clean and reasonably well groomed
- following directions
- being personable

You may take these "skills" for granted but they need to be developed. This is one of the invaluable benefits of minimum wage jobs. It's the first rung on the ladder. It's not meant, nor intended to be, a role that one can have to support ones family. It's the f**king MINIMUM.

Re: Typical...

[Anonymous Coward]

if you're putting in 40 hours a week to a job, then you have every expectation to be able to live off said job.

Not live well mind you, but you should be able to house, clothe, and feed yourself.

Re: Typical...

[Train0987]

If minimum wage has a negligible effect on employment then why not raise it to $100 hour? Serious question.

Re: Typical...

[e3m4n]

agreed, but there is always 2 sides of an equation... if you dont work both sides it wont balance, you just drive up costs. You said it yourself : "to be able to support themselves". Lets say that it costs $1000/wk to support yourself, your wife, and your kids living a meager lifestyle. You work for $400/wk and your wife works for $400/wk. Now one approach could be to raise minimum wage, but run the risk of the cost to support everyone increasing to $1100/wk, or you can focus on lowering the cost of living down to $800/wk. A lot less discussion ever happens about the latter yet we see examples of that sort of thing actually happening from time to time.

Not that I would count most things in the tech industry as essentials, but look at things like cell phone plans, internet plans, etc over the last 10yrs. Just the talking and texting part of cellphones has fallen all the way down to $15/mo for unlimited talk and texting. In 2003 sprint was selling 1000 minutes of air time for $100/mo. No texting included. This just illustrates that its entirely possible to lower the costs of essentials perhaps easier than it is to raise wages.

What is killing everyone, despite everyone insisting its good for the economy, is property booms. Before the big 2008 crash, my real estate area had experienced a 30yr trend where property values doubled every 10 yrs. No increase in wages but the cost of property doubling every 10yrs is a recipe for the poor house. Increase property values work against the affordable living scenario.

Re: Typical...

[Train0987]

Sowell isn't so much partisan as economic conservatives have adopted his theories. Before being brainwashed into dismissing anyone your betters have labeled for you, maybe read his work for yourself and make up your own mind? They label him because his theories are very difficult to dispute and they desperately don't want you researching it for yourself.

Re: Typical...

[interkin3tic]

No one said food. Childhood poverty, education performance, and crime later on in life are a whole mess that is not my field, but it does seem plausible that if you let one in five kids grow up poor, as we appear to be doing now, you might get a lot more criminals later on. You're going to be paying for their food, sure, but that's among the least of the costs of law enforcement and prisons that you as a taxpayer will be paying for.

We don't let poor, old, and/or sick people die in the street. They won't have preventative care or retirement, but they'll get emergency treatment for their medical emergencies. If they skip out on the bill or go bankrupt, the hospital pays it, passes it onto insurance companies who pass it onto you.

Or you could potentially pay more now in terms of welfare and maybe higher minimum wages, both of which have potential other benefits, like more people with money = healthier economy for everyone else since they can buy stuff.

I dunno, but I do know "MONEY MINE! NO TAXES!" is not a very sound economic theory.

Re: Typical...

[edx93]

One thing I've learned in social science is never trust research -- or at least give it a good read before making any comments. In fact, I actually left the econ PhD a decade ago after seeing that pretty much all research done in this field is a giant form of confirmation bias: "Keep working on it until it makes sense", they'd tell me. Or "Make sure the results are in line with what you'd expect and consistent with literature" and so on. I have yet to see someone confirm someone else's economic theories -- only their own. And it wasn't my school either: I wish I could remember the details, but I recall reading a paper way back when from Princeton that had methodological errors in it that I was amazed it was even taken seriously, much less published.

Personally, The reason that I like Hayek and Sowell is that it's based on logic and reasoning. Then again, I am biased, so there's that...

Re: Typical...

[GrumpySteen]

For the same reason that drinking an extra liter of water per day has a negligible affect on your health, but drinking an extra 100 liters of water per day is a terrible idea.

Re: Typical...

[ArmoredDragon]

Furthermore, when minimum wage first began under FDR, it was 25 cents an hour. Adjusted for inflation, that is $4.25 an hour today.

Most economists don't even like the concept of a minimum wage at all, and that includes famous Democrat economists like Paul Krugman.

Anyways, if you look in my post history, I personally predicted exactly this, and was downmodded as a troll post.

I told you so, slashdot.

Re: Typical...

[Anonymous Coward]

Cell phones and cars are not really optional in much of the US. The rest of the items you list are cheap entertainment. They are way, way cheaper than, say, going to the movies even once a month.

Re: Typical...

[dgatwood]

In fact, there are many potential jobs that are worth less than a living wage, and there are people who don't need a living wage who would like to have those jobs.

But are there, really? I can only think of two groups of people who don't need a living wage: People who get paid disability by the government (e.g. people with serious mental disabilities) and high school students. The problem is that most high school students don't really want a job, and more importantly, can't do a job during the most critical part of the workday except three months out of the year. So depending on them is not a viable way to sustain any sort of business.

Ostensibly, you could extend that to recent high school grads living with their parents, but the problem is that eventually those folks have to be able to move out of their parents' houses, which means they need additional education, which costs money—way more than a basic living wage if you want to afford even a basic two-year community college degree. And if you they don't earn enough money for that, then you've effectively created a permanent underclass that can never move out of their parents' houses, who thus eventually end up homeless when their parents retire and can no longer afford to pay their rent. This is simply not sustainable, either.

The notion of a group of people that doesn't need a living wage is, frankly, absurd. What you're really arguing is that there is a group of people who don't have enough clout to demand a living wage and/or don't understand that they're getting screwed. And that's not the same thing as not needing to make ends meet.

(Well, okay. Pedantically, there are a fair number of independently wealthy people who have enough money that they can afford to work for less than a living wage and still make ends meet. But they also don't need the money, and sure as h*** won't work for less than minimum wage, which makes that moot.)

Re: Typical...

[interkin3tic]

That's quite a false dichotomy. Either the kids are saying "My parents have under the poverty line therefore I think I will join a gang" or money has nothing to do with neighborhood or parenting skills whatsoever.

Poor people can't afford to live in lower crime areas or spend as much time with their kids.

Re: Typical...

[TheRaven64]

If you predicted this, then perhaps you can answer this question:

If it's possible to reduce the hours of all of your low-skill workers without impacting your business's competitiveness, then why did so many managers not do so before this? Reducing your labour costs by 9% would have a huge impact on most companies' bottom lines, yet apparently they were happy to waste this money until minimum wage went up.

And, on a related note, why do the managers that were wasting 10% of their payroll on inefficiency (that apparently can be trivially addressed) for years all still have jobs?

UW study contradicts...

[Uncle_Meataxe]

The University of Washington study comes to a very different conclusion than a UC Berkeley report.

How a Rising Minimum Wage Affects Jobs in Seattle
https://www.nytimes.com/2017/0...

Re:Only Temporary

[ageoffri]

Or as is more likely, any business that can will move outside of the city limits and pay the prevailing wage that is lower.

Re:Only Temporary

[Anonymous Coward]

It's humorous you think there's so many levels of disconnected management in small companies employing minimum wage workers.

Re:Special Advisory on invalidated study

[Anonymous Coward]

and I disregard anything Forbes says since I can't read any of their articles without risking a malware infection

Perfect!

[Seth Morabito]

Oh cool! Now we have two reports that draw opposite conclusions, so we can just pick whichever one we already agree with and ignore the other. Sweet!

Re:This has already been proven bunk

[WrongMonkey]

[citation needed]

Re:Only Temporary

[Train0987]

No, your "living wage" fantasy is what's not viable. You can't even define a "living wage". Put a number to that. Why not raise the minimum wage to $100/hr? Seriously, why can't anyone answer that question?

Re:Only Temporary

[Train0987]

Obamacare saw to it that all those jobs were cut to part-time years before the current $15/hr minimum wage mandate, which is killing them even more now.

Win, but not the way you think

[Solandri]

For service employers who interact with customers (e.g. fast food register operators), this basically means customers have to wait in longer lines. Having more employees working the registers means customers get faster service, but it also means you have more employees sitting idle when there aren't enough customers. Having fewer employees working the registers means customers have to wait longer, pushing some of those customers into time the employees would otherwise be sitting idle. Thus efficiency (in terms of reduced time employees spend idle) is increased.

For service employers who don't interact with customers (e.g. maids), it just means their hours were reduced. The office decides to have cleaning services come in every other day instead of every day. The floors are a bit dirtier, but it's considered preferable to the higher price of cleaning service. Thus efficiency is increased.

For production employees, they simply moved production out to someplace with a lower minimum wage. Thus efficiency is increased.

Flipping Burgers is an Entry Level Job

[jasontromm]

Minimum wage is not supposed to be a "living wage." McDonald's and the like are supposed to be the first job a person gets, not a lifetime career. You're supposed to learn a work ethic in a minimum wage job so you can move on and get a better job. $15 / hour prevents people from getting that first job because they have no skills and have to be taught everything. I might be able to support a minimum wage if there was a lower "training wage" for people with no skills in their first job.