Seattle’s minimum-wage increase made the most vulnerable workers poorer
qz.com
qz.com
https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-s...
Top comment:
>A non-peer reviewed study that left out all large employers. Seriously! I can't believe the Post did a story on this. Wait for it to actually get published, and then we can talk about how any study on employment that leaves out all the national chain stores is totally bogus. Really this is very shoddy work. I'm disappointed with the Post for highlighting it. At least wait until it got published. This is one step above click-bait.
if anyone read the paper, they subjected exclusively fast food workers, and excluded employers that have locations out of state.
now let that sink in. exclusively local fast food places.
yet lots of places were probably forced to report it. one newspaper even reported it ironically. the title had a quotation in quotes to read something like "a 'very credible' study says..." .
Instead, they just looked at the number of hours worked for under $19/hour before and after the wage increases. Since $19 is close to the new minimum wage, it could be that the pay scales of everyone shifted up a bit, and jobs below $19 are now a lower percentage of all jobs.
Unless I'm missing something, this study is too sloppy to be newsworthy.
1. Even though it made some people better off, and others worse off, did it reduce the number of people who need assistance?
2. Even if the amount of assistance is the same, if the number of people who need assistance is reduced, this would be a win.
To put it another way: if some people are not getting a living wage, and raising the minimum wage doesn't help them, then the only way to help them is direct payments (and, maybe education which has to paid for).
But if raising the minimum wage reduces the total number of these, it sort of "clarifies" who needs the help and who has skills that can be deployed.
http://www.thestranger.com/slog/2017/06/26/25238844/the-morn...
Michael Reich, a UC Berkeley economics professor who was lead author on the Berkeley report, said he found the UW team’s report not credible for a number of reasons.
He said the UW researchers’ “synthetic” Seattle model draws only from areas in Washington that are nothing like Seattle, and the report excludes multisite businesses, which employ a large percentage of Seattle’s low-paid workforce. The latter fact was also problematic, he said, because that meant workers who left single-site businesses to work at multisite businesses were counted as job losses, not job gains in the UW study.
Reich also thought the $19 threshold was too low, and he said the UW researchers’ report “finds an unprecedented impact of wage increases on jobs, ten times more than in hundreds of minimum wage and non-minimum wage studies. … “There is no reason,” he said, that Seattle’s employers of low-paid workers “should be so much more sensitive to wage increases.”
The "economics 101" ideas applied to price floors (which ie what a minimum wage is) predicts lower volume (fewer jobs/hours). It doesn't predict how much, so it still might be worth having a minimum depending on the demand curve (which is never really known). OTOH, even the biggest proponents of minimum wage would admit that at some level minimum wage makes things worse. Most would agree that a $1,000 minimum wage would cause unemployment. Still, there's no real way of determining the "correct" amount, and even proponents seldom come up with a figure.
Anyway, being the dismal science economists just don't have any good way of settling this. This isn't the first study on the topic. If you look at it from a meta-research perspective, it looks like a null result with findings on both sides.
https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...
You'll notice that's just the opposite of "supply side economics".
Now most will latch onto the study (and their priors) and politicians will abandon any attempt to raise Minimum wage citing this and round and round we go...