Opponents of a $15 minimum wage have suggested that efforts to achieve it would backfire, with employers cutting hours and people.
Some new research says that argument has validity.
Researchers at the University of Washington studied Seattle’s phased-in increases — first from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016 — and found the second wage increased reduced work hours in low-wage jobs by 9 percent while wages increased only 3 percent.
They concluded that the reduction in hours cost the average employee $179 per month, while the wage increase added only $54.
“You’ve got to watch out because at some point you run the risk of harming the people you set out to help,” Jacob Vigdor, a University of Washington economist who was one of the study’s authors, tells FiveThirtyEight.
But this might not be data you can take to the bank.
The study did not include large employers who have locations both inside and outside of Seattle. And critics of the study say it did not take into consideration Seattle’s booming economy in which employers “bid up” wages, effective replacing low paying jobs with higher paying ones, the New York Times says.
“You see the biggest difference in the effect when the minimum wage increased from $11 to $13,” Mark C. Long, one of the study’s authors, tells the Times. “The timing suggests it’s the minimum wage” as opposed to a booming economy.
Last week, the Institute for Labor and Research on Employment released a study of restaurant workers which showed wages increased much less among full-service restaurants, indicating that employers made use of the tip credit component of the law. But it says employment in food service was not affected and that wages increased.
“My view of the research is that it seems to work,” Ben Zipperer, of the liberal Economic Policy Institute (EPI) in Washington, tells the Washington Post. “The minimum wage in general seems to do exactly what it’s intended to do, and that’s to raise wages for low-wage workers, with little negative consequence in terms of job loss.”
“Of the 20 restaurateurs I am close friends with in Seattle,” one Seattle restaurateur says, “none have told me they are hiring fewer staff due to the increased minimum wage.”
Minneapolis is among the nation’s cities pushing to increase the minimumw wage to $15 an hour. It would be implemented over five years. Large employers would be required to hike minimum wages by $1 per year until 2022.