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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."
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...
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.
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.
Negative --- Forbes just came out with the counter-argument that this study was invalid since they didn't research all the workers, just 60%. Must cover all the workers or at least 95%.
Multi-national and nationwide chains are excluded from the study by NBER.
Surprise!
Those are the target audience of tax-supported employers
Worthless "Study"
If you exclude all the employees from businesses that have multiple locations, then focus only on single-location businesses that are under pressure by the excluded businesses, you're pretty much guaranteed to get that result.
The UW study is a BS. Instead of just looking into the actual data (it's not compatible with the aim of the study as it shows improvements in wages and jobs) they created a "fantasy Seattle". Then they compared the growth of wages and employments in this "fantasy Seattle" with the reality. Then they tweaked the model to produce the numbers they want - they omitted minimum-wage workers from chain franchises.
And lo and behold! The model shows slightly more growth than the real Seattle.
Or as is more likely, any business that can will move outside of the city limits and pay the prevailing wage that is lower.
-- Slashdot, making the Left look conservative since 1997.
The solution is obvious to pay workers nothing, thus guaranteeing infinite work.
It's humorous you think there's so many levels of disconnected management in small companies employing minimum wage workers.
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.
If you're scared of your govt then you need to further restrict its powers
Vote 3rd Party in 2016 and beyond
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
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.
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.
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!
If minimum wage has a negligible effect on employment then why not raise it to $100 hour? Serious question.
30% of the entire U.S labor market is low-wage service jobs and that number has been steadily climbing. There just isn't enough jobs up the "ladder" for everyone that works hard and plays by the rules. FYI research shows a strong correlation between higher minimum wage and lower rates of turnover, something about people getting a decent wage makes them more likely to appreciate their jobs. Who knew
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.
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?
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.
[citation needed]
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.
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.
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...
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.
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.
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.
Absolutely conclusive evidence until you read the rebuttals. Like the fact that his data excluded all restaurants (almost 35% of minimum wage jobs), excluded any business with more than one location, etc, etc, etc. Just remember, figures never lie but liers can figure.
The data set the researcher used was substandard at best, someone might even argue the data set was cooked to extract the desired result.On top of that he refuses to provide the data to outside users and reviewers making his "research" a fucking black box. But he was at least honest and listed all the problems with the data, just didn't include why excluding more than a 1/3rd of low wage jobs in the study area was a good idea.
https://www.washingtonpost.com...
When I was starting my family out my neighbor was section8 + all the other social support.
She was the stereotype to a T. Three kids by three different men, all spaced 5 years apart (First 5 California), had cable, had a car, had a cell phone.
She needed help with her paperwork one day and asked me to help, so I saw all the numbers. I did a P&L for her and compared it with a P&L for me and you know what? I was working my ass off for $13/hr (1999) and she was bringing home about $100 per month more than me sitting at home doing nothing. Hugely frustrating to me, but of course if she actually got a job it would be min wage and she'd lose at least twice as much in benefits as she'd have earned. The system is desperately broken, but I haven't the foggiest how to fix it.
Now, where I live public transit is shit. Jobs are spaced out. A car is kinda needed. A low end cell phone on a cheap plan is cheaper than a land line now. I get it, but the system still keeps people dependant.
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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.
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.)
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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. 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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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?
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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.
"Politicians always tell the truth, when they're calling each other liars."
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.
Working hard and playing by the rules has never been a recipe for anything but modest success at best
Yet this is the delusion under which a large number of Americans labor, and the ruling class perpetuates.
"What the American public doesn't know is what makes them the American public." -Ray Zalinsky (Tommy Boy)