At this morning's city council briefing, Council Member Kshama Sawant passed around copies of this New York Times opinion piece, on some evidence favoring higher local minimum wages, for her colleagues to read; Council President Tim Burgess had already linked to it on Facebook and called it "insightful."
And where will its authors, Michael Reich and Ken Jacobs of U.C. Berkeley, be this Thursday? Why, right here in Seattle, at the all-day Income Inequality Symposium convened by the city, with a host of politicians, academics, local business leaders, and other people who the city likes to classify as "stakeholders" in this minimum-wage debate. See more details and register for the free event right here.
From the NYT:
One city we have studied in detail, San Francisco, has passed a dozen labor standards laws since the late 1990s. After adding the effects of other local laws mandating employers to pay for sick leave and health spending, the minimum compensation standard at larger firms in San Francisco reaches $13. Our studies show that the impact of these laws on workers’ wages (and access to health care) is strong and positive and that none of the dire predictions of employment loss have come to pass. Research at the University of New Mexico on Santa Fe’s floor (now $10.66) found similar results.
These are not isolated cases. Research on the effects of differing minimum wage rates across state borders confirms the results of the city studies. But how can minimum wage increases not have negative effects on employment? After all, according to basic economic theory, an increase in the price of labor should reduce employer demand for labor.
That’s not the whole story, though. A full analysis must include the variety of other ways labor costs might be absorbed, including savings from reduced worker turnover and improved efficiency, as well as higher prices and lower profits. Modern economics therefore regards the employment effect of a minimum-wage increase as a question that is not decided by theory, but by empirical testing.