retail news in context, analysis with attitude

by Kevin Coupe

The New York Times has a story about how two studies looking at how an increase in the minimum wage to $15 in Seattle has impacted the city - and how they've reached differing conclusions.

"The first study," the Times writes, "by a team of researchers at the University of California, Berkeley, supports the conclusion of numerous studies before it, that increasing the minimum wage up to a level that is about half or less of an area’s typical wage leads to at most a small reduction in employment."

But, "the second study, which a group of researchers at the University of Washington released on Monday, suggests that the minimum wage has had a far more negative effect on employment than even skeptics of minimum-wage increases typically find ... The University of Washington authors held one significant advantage over other economists studying the issue: detailed data on hours and earnings for workers affected by the increase.

"This data allowed the researchers to measure the effects of the minimum wage on workers in all industries rather than relying on restaurants as a stand-in, a common technique. It also allowed them to measure a change in hours worked, a potentially more complete indication of the effect of a minimum-wage increase than the employee head count that many studies use."

The details and rationales behind the two studies can be found here.

I'm glad they're looking at this, and I'm not really surprised that they've reached different conclusions ... the story even has anecdotes from real people illustrating each of the conclusions.

Seattle is actually a tough market to do such a study - the economy is booming, and there are a lot of companies there paying more than minimum wage because they have to in order to attract people, as opposed to because the government mandates it.

I'm perfectly willing to accept the notion that a higher minimum wage might cause some companies to slow down hiring, but I also continue to believe that there is a public policy problem when the minimum wage is so low. It'd be great if people of varying political persuasions could get together to have a mature, nuanced discussion of the problem and possible shared solutions.

It'd be great. It's also incredibly unlikely, if not impossible.

Which is itself an Eye-Opener.
KC's View: