Researchers at the University of Washington published a new study this week on the effects of Seattle’s minimum wage, and their results were mixed: While some Seattle workers have benefited from the increased minimum wage, which increased from $11 to $13 in 2016 (and is at least $15 for larger employers as of 2018), others, they found, have not.
The researchers analyzed data on employment rate, work hours, and earnings over an 18-month period, before and after the minimum wage increase. They found that for workers whose hourly rate increased with the change in minimum wage, while their hours, on average, slightly decreased, their earnings, on average, increased by $19 a week for workers with above-average experience.
Less work for more money sounds pretty good to me, but the benefits weren’t universal. The study also found that “employers responded to high minimum wages by shifting their workforce towards more experienced workers.” In other words, workers without much experience or those just entering the workforce are less likely to get to hired, and workers already in the workforce are less likely to leave their jobs: The study found that over the 18-month study period, turnover declined by 8 percent.
The researchers caution that their findings are specific to Seattle and should not be used to make broad policy changes elsewhere: Seattle is one of the fastest growing—and most expensive—cities in America, and the minimum wage increase occurred during boom years. What happens here isn’t necessarily what would happen in Omaha.
The study, however, is not without its critics, in part because it follows up on a study from 2017 that was widely condemned on the left (including in this paper). That study concluded that wages would decrease as employers cut back workers’ hours. According to a New York Times article on the new study, the authors “flipped.” Jacob Vigdor, on of the study authors, however, told the Times the two studies were largely consistent and told me
that he’s “comfortable letting readers decide for themselves whether our team flipped.”
Vigdor also says that for those who benefit, the increase in the minimum may lead to greater job satisfaction:
In an email, he said, “[I]f we offer people two jobs that feature the same weekly paycheck but one requires fewer hours per week, we’d expect everybody to take the job requiring fewer hours. So yes, the implication is that moving workers in the direction of earning the same pay in fewer hours is a good thing.” This however, comes with a caveat. “The only catch is if there’s something else about that fewer-hours job that makes it less desirable—if it offers fewer benefits/perks, if it’s a less safe workplace, if the job is more physically/mentally draining, and so forth.” Study researchers are now following up with both workers and employers to see if benefits have been cut back.
