A year after Seattle started incrementally increasing its minimum wage to $15 an hour, researchers have found little evidence of higher prices. That was one major takeaway from a team of University of Washington researchers who presented some of the first available data on Seattle's minimum wage increase to the city council this morning.
Around the time the minimum wage increase took effect last spring, researchers from the UW schools of public policy, social work, and public health surveyed 567 Seattle businesses where some workers made less than $15 an hour and 55 workers making less than $15 an hour. Over the last year, they've also examined price data by looking online and visiting grocery stores, restaurants, and other retail locations.
"By and large, across most retail sectors, we have found little or no evidence of price increases in Seattle relative to the surrounding area," the researchers write in their first report.
The data comes with a few caveats (more on those later), but it's big news after years of opponents fretting that minimum wage increases would cause prices to skyrocket and businesses to shutter.
Here are a few takeaways from the researchers' first report, starting with what they found on prices:
•The minimum wage doesn't appear to be making food more expensive. Of the employers surveyed, 85 percent of those in "food and accommodation" said they planned to raise prices. However, the researchers found that costs of grocery store food, gas prices, rents, and retail prices in Seattle hadn't increased any faster than in the rest of King County. For restaurants, they found price increases in Seattle but don't have enough data to say definitively whether those increases are happening any faster than in the rest of the county.
"The bottom line is if there's any place we can find price impacts, it is in restaurant sector," Jake Vigdor from the Evans School told the council. When researchers went into the field to study restaurant prices before the minimum wage increased in Seattle, they didn't visit enough restaurants outside of the city to make a comparison.
The researchers also did not distinguish restaurants that are adding service charges to replace tips, though they said that only made up a small portion of the restaurants surveyed.
• Many workers have only a vague awareness about what they're owed. Of the workers surveyed, 62 percent had a vague understanding of the law and 10 percent had no understanding. Those percentages were higher among immigrant workers.
But researchers were careful to explain their worker data isn't representative of all low-wage workers. They deliberately chose participants with low incomes and at least one child to focus on workers trying to raise a family on the minimum wage.
Meanwhile, the overwhelming majority of businesses—92.1 percent—said they were aware of the law. That said, the business survey didn't measure just how detailed that awareness was. (Some businesses believed they had to pay $15 an hour right away.)
This is an indication that there's work to be done in educating workers about their rights. The first year of minimum wage law implementation was focused on making sure businesses knew what they should be paying workers. Now, labor groups want to see similar focus on making sure workers know what they should be getting paid. Unions want to tax businesses to pay for that education; Mayor Ed Murray doesn't seem interested.
• The minimum wage law could increase health care benefits for some workers. Some businesses said they are adding health care benefits or encouraging employees to enroll in those benefits because it allows them to pay lower wages.
Other businesses said they would "eliminate another benefit" (we still don't know what that means) in order to pay for the wage increases. Researchers won't know how many businesses actually add or take away benefits—or which specific benefits are affected—until they do follow up interviews this summer and next year.
• Workers are still struggling to get by. As living costs have increased in Seattle, minimum wage increases over the last two years haven't necessarily been enough to keep up. Of the small group of 55 workers surveyed, some were worried that making more money would mean they were eligible for fewer housing subsidies or other public benefits. Others worried "everything will go up" as their wages increase. Here are some of the things UW researchers heard from workers:
Researchers won't know how many of these fears come true for another year or two. Read the full report here.