Few things get economists more excited than tracking the outcomes of major policy shifts like minimum-wage increases.
“We have this incredible economic laboratory going on right now,” said Scott Bailey, the Southwest Washington regional economist for the Employment Security Department and an organizer of this week’s Pacific Northwest Regional Economic Conference.
Friday morning’s minimum-wage talk packed a room at the Hilton Vancouver Washington during the second day of the conference, a traveling yearly gathering of economic experts and their ideas.
Bailey unloaded statistics about minimum wage in Washington state, which among states making moves on the wage floor is “still making up its mind,” as cities like Seattle and SeaTac have taken the lead for now.
The percent of total jobs that pay minimum wage have been on the rise for decades, Bailey said, as fast growth in lower-wage industries has increased the number of those jobs.
“In general, there’s been a shift to more low-wage jobs … over the past 40 years,” Bailey said.
More than half of all minimum-wage jobs are in food service, hospitality, retail trade and agriculture, and Washington’s rural counties have the highest percentage of minimum-wage jobs. Bailey’s data shows Clark County is a little above the state average for those jobs, while Skamania County joins north-central and eastern counties with one of the highest rates.
He showed that a minimum-wage hike to $12 would constitute less than a 1 percent average increase in payroll expenses for employers in the state. However, during minimum-wage increases in the past 15 years, low-but-not-minimum wages have not seen “upward pressure” in reaction to wage hikes, Bailey said.
University of Washington professor Jacob Vigdor talked through ongoing research at the university that shows, so far, that only restaurant prices are rising substantially after Seattle’s minimum wage started increasing. Large employers will start paying $15 an hour starting Jan. 1, while smaller businesses will see that rate phased in through 2021.
As for what businesses think of the wage hike, Vigdor said: “There’s some skepticism in general about some of the advertised benefits.”
Vigdor added that a minimum-wage increase would likely allow people to live the way they already are but without going into as much debt.
Oregon Employment Department economist Will Burchard walked the audience through that state’s tiered minimum-wage rise that sets three different wage floors. In Portland’s urban growth boundary, wages will increase to $14.75 by 2022; urban counties will go up to $13.50 in that time; and rural counties will reach $12.50.
When asked how or why some counties were picked for the law passed this year, Burchard’s answer drew laughter: “You’ll have to ask a legislator.”
