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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."
They aren't just working more hours, many have been laid off altogether while many small employers just closed and moved outside the city limits. For the restaurant/service industry there's also been an increase in the number of illegals hired and paid even less than before under the table.
I'd order another study myself if I was given UW's pure BS. From your own cited source:
"Among other things, the UW study did not include multisite businesses in the study, which the UW researchers argued produced a cleaner data set but which Berkeley researchers said meant a huge portion of Seattleâ(TM)s low-wage work force was left out of the study. "
"Cleaner" as in is necessary to show the purported effect?
Interesting point, but the UCB report is not "pure BS." Actually, it's a pretty difficult problem to address and economists have been working on it for years. Like previous studies, it appears that the UW study has its own methodological problems. You probably quit reading before you got to this point in that seattleweekly.com post:
"Berkeley’s Reich did not return a phone call seeking comment, but in a memo released Monday he blasted the UW report, saying it was full of red flags.
Among other things, the UW study did not include multisite businesses in the study, which the UW researchers argued produced a cleaner data set but which Berkeley researchers said meant a huge portion of Seattle’s low-wage work force was left out of the study. Reich also notes that many of the UW team’s most dire conclusions fall outside what even highly critical research would suggest."
“The unlikely UW estimate of large negative employment effects likely results from the problems noted above. Their findings are not credible and drawing inferences from the report are unwarranted,” Reich wrote."
Ah, so all those climate models that show that the temperature is increasing due to CO2 emissions must be BS because they're based on "fantasy earth" where we didn't increase CO2 emissions. I agree, anything based on a model must be false: you either go to the parallel universe where the variable you're controlling for is different, or it's not science.
The math on this wasn't making any sense to me, an 18% or 32% wage increase (depending on whether you count one or both increases) ought to more than compensate for a 9% decrease in hours. So i dug through TFA a little and eventually found this:
"Seattle data show - even in simple first differences - that payroll expenses on workers earning under $19 per hour either rose minimally or fell as the minimum wage increased from $9.47 to $13 in just over nine months."
So they're including people making more than the new minimum wage, up to 46% more, in their calculations. Given the discrepancy noted above it seems likely that the higher wage employees are bearing the brunt of the reduction in hours
Most likely the wage increase helped the people it was directly targeted at but had a negative impact on others who were making above minimum wage but not enough above the minimum to escape the "low-wage" classification.
This Space Intentionally Left Blank
Fascinating how the article notes lower payrolls, which means the paychecks are somehow smaller or that there are fewer people employed. Do you want to defend either?
"His name was James Damore."
These are illuminating in regard to any discussion of the economic impact of the minimum wage:
http://thehill.com/homenews/ho...
And this:
https://boingboing.net/2017/06...
You are welcome on my lawn.
Because it has a negligible effect on employment at approximately it's current level.
At it's current level, raising the minimum wage causes a nearly one-for-one increase in consumption. That increased sales offsets the expense of the higher wage.
If it jumped to $100/hr, that would no longer hold true. Well, at least until inflation turned that $100/hr into the equivalent of $10-15/hr.
I'm thinking that "don't work at all" may be the lesser of two evils: A sub-livable wage exploits workers and amounts to an unorganized form of corporate welfare. If you keep people from working for such low pay, even if it means less income for them, it cuts off the corporate welfare stream that was available to all companies paying sub-livable wages and ensures that those who still have jobs can support themselves.
As for those who can't find work anymore? Well, what to do with the ever-increasing number of ever-more-skilled people our lovely capitalist system has no need for is another question, and we won't answer it any faster by papering the problem over with sub-livable-wage jobs...
"When information is power, privacy is freedom" - Jah-Wren Ryel
Not at $15/hr. In many parts of the country skilled labor is making that and living comfortably. Once the low-skilled minimum wage in their neighborhood for unskilled labor increases to the same level as their skilled labor what do you think will happen?
How many of them have these things? Go on, give me a percentage of people living in economic poverty who have these items. Surely you must have an actual statistic, right? I mean, you wouldn't just be making it up for effect, right?
The world's burning. Moped Jesus spotted on I50. Details at 11.
Well, that really depends on what things you factor in when adjusting for inflation. I would argue that the primary metric when setting minimum wage should be based on the cost of getting an education to allow someone to move beyond a minimum wage job. In 1938, tuition at Harvard was $420 per year. Using that as a metric, minimum wage should be $25.76 per hour today, or about $54,000 a year.
Other possible metrics range from significantly less than minimum wage to significantly more:
That first one is pretty important, because both that and the cost of education are solid indicators of whether someone can possibly make enough money to make a crucial leap in personal financial development—from minimum wage to better wage, from renting to home ownership. When low-end wages fail to keep up with inflation in those areas, even though the day-to-day survival items remain affordable, it means that the people at the bottom are more likely to be kept permanently at the bottom with no opportunity for advancement, effectively growing the divide between rich and poor and eroding the middle class. This, in turn, leads to much more serious societal problems.
And there's also another critical number that this ignores: 15. That's the improvement in years of life expectancy since 1938. In 1938, on average, people lived only about 63 years, which means most people never reached what we would consider retirement age. Now, they live for more than a decade after retirement, on average, and those years are significantly more expensive in terms of average healthcare costs.
I can't find average healthcare cost statistics for the 1930s, but if we compare against 1958, the cost has roughly quadrupled after adjusting for inflation. So if we used the cost of healthcare in 1938 as the metric for computing inflation, I could easily see thirty or forty bucks an hour as a reasonable minimum wage.
Really, minimum wage is way too low. Way, way too low. And if that means that there are jobs that aren't worth what businesses have to pay, they will have to adapt—either by finding more efficient ways to use personnel or by adding automation to replace personnel with machines. And the result will be that certain categories of jobs will cease to exist. And it will ultimately be the government's responsibility to find a way to subsidize the cost of their education so that they can be qualified for jobs that pay more. But that's really the only realistic future. We simply cannot continue to live in a society where a sizable percentage of workers can never realistically afford to go to college.
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Well, that really depends on what things you factor in when adjusting for inflation. I would argue that the primary metric when setting minimum wage should be based on the cost of getting an education to allow someone to move beyond a minimum wage job.
Usually I try to be respectful of other people's opinions but no, I'm sorry it's not. I think it's very sympathetic to the plight of the lower classes but overall it's a terribly misguided idea to track inflation to education costs and only education costs. You can't pretend the rest of economy and society doesn't exist. Not everyone in poverty is capable/interested/planning on obtaining a post secondary education. So what happens if education costs go down and they can't afford other basic living expenses? Oh, they should all just go to college? Really? No, minimum wage should track the whole basket they use today for measuring the CPI because these are things people need to live everyday.
The truth is, already education is free in the US. You don't have do anything to obtain except show up. I have to assume you're talking about post secondary education? If so, you're making it sound like all you have to do to get into the middle class is go to college. Sounds a lot like today's problem of kids obtaining college degrees and not being able to find gainful employment afterwards... Yes having a degree is a good indicator of your place in society. Yes, it'll raise your odds, statistically speaking. However there are still NO guarantees on this. The nuances are much more complex. Location, type of degree, you as a person, life skills, all of these details are important but more challenging to track and measure. As time goes on, society is beginning to realizing that post secondary education is neither an autopilot for success nor is it always even necessary to do well. Sure it's anecdotal, but just ask my plumber/electrician/landscaper/contractor. You don't need a college degree to be in the middle class. You just don't. The solution to "fix" society is not sending everyone to college. The really difficult question is how do you built up a society in such a way that everyone strives and works hard to obtain meaningful and gainful employment. It's a really, really hard problem to solve. Especially if you already have existing paths for people to do so, but they aren't doing it. Altering minimum wage is very easy and yet ineffective way of solving this problem. You can put more and more carrots in front of people to persuade them to go where you want them to go. But when do you stop adding carrots and instead figure out why they're not chasing the carrots?
Besides, post secondary education is way overpriced right now for all the wrong reasons compared to Harvard 1938. If you could break down the cost of your college bill, you'd be surprised how much of it is not even academic in nature. No way in hell we should be pegging something bloated like that as a measure for minimum wage.