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Here are some recent reports below on the results of Seattle’s “radical minimum wage experiment” so far. Depending on the size of the firm, Seattle’s minimum wage is currently between $10.50 to $13 an hour, and will increase to $15 an hour between January 2017 and January 2021. The chart above displays the history of the minimum wage in Seattle in both nominal terms (light blue line) and inflation-adjusted 2016 dollars (dark blue line) for those firms that will be forced to pay $15 an hour in less than five months. Adjusted for inflation, the highest previous minimum wage in Seattle was in 1968, when the minimum wage was $11.12 an hour in 2016 dollars. Therefore, the $15 an hour minimum wage that will go into affect on January 1, 2017 will be almost 35% above the previous all-time record high minimum wage. In light of that reality, when Seattle Mayor Ed Murray called his city’s $15 minimum wage a “radical experiment” he couldn’t have been more right. When Mayor Murray claimed that Seattle’s “action will serve as a model for the rest of the nation to follow,” I predict that he’ll learn eventually that he couldn’t have been more wrong. Expect more of the early disappointing results outlined below.
1. “Why raising the minimum wage in Seattle did little to help workers, according to a new study,” from the Washington Post:
Although some workers are earning more, fewer of them have a job than would have without an increase. Those who do have a job are working fewer hours than they would have without the wage hike.
2. “Early data show $15 minimum hurting Seattle’s poor” from the Washington Examiner:
The minimum wage hikes resulted in modest declines to their employment rates and hours worked. While the workers did experience boosts in earnings overall, the report found the increases would have happened without the higher minimum thanks to the region’s growing economy. The higher rate in fact probably reduced the gains that they would have otherwise received. The city’s employment rate was 4.3% percent in April 2015 when the $11 rate went into effect. By May of this year, Seattle unemployment had climbed to 4.8%.
3. “Study: Seattle minimum wage workers have hours cut, lose jobs” from the American Thinker:
But the study also shows that those workers are working fewer hours. And many of them lost their jobs. I have one word to describe that: Duh.
4. “Seattle’s Minimum-Wage Education: When a wage floor goes up, hours worked and employment go down” from the Wall Street Journal:
Few ideas have been so thoroughly dismantled by reality as minimum-wage laws, which price some jobs out of existence and some workers out of jobs. Yet progressives keep expecting different results, and on Thursday Hillary Clinton endorsed a national increase. So let’s check in on the latest experiment: Seattle’s increase last year seems to be reducing employment.
None of this will surprise anyone who understands that increasing the cost of something will reduce the demand for it. Then again, that concept seems to elude both major presidential candidates, who have floated national minimum-wage increases. The results will be the same as in Seattle: Fewer opportunities for the people the law is intended to help.
5. “Higher Local Minimum Wages: Early Results from Seattle” from Timothy Taylor at the Conversable Economist blog:
Low-wager workers in Seattle were better off as a result of the higher minimum wage if they managed to keep their job or to keep working roughly the same number of hours. But the employment rate of low-wage workers in Seattle declined slightly, as did the hours worked, which would lead to lower total earnings.
The early evidence from Seattle is that a higher minimum wage at the city level doesn’t raise total earnings by much, because low-skilled workers end up with fewer hours on the job.
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