Seattle’s Minimum Wage Ordinance, passed by the city council in 2014 and designed to phase in a $15-an-hour wage floor, should be viewed as an important long-range experiment. And, as with any meaningful experiment, it requires time for the consequences — both intended and unintended — to play out.
Because of that, there is little that can be learned from a new report about the wage increase by a team of researchers affiliated with the University of California. Assessing and applying the lessons from Seattle’s enterprise will require years of empirical evidence that goes beyond the rhetoric that typically surrounds debate over the minimum wage.
That rhetoric can be cacophonous. Critics of the minimum wage insist that increases will lead to fewer jobs if employers are compelled to pay workers beyond the value those workers provide to a business. Supporters insist that placing more money in the pockets of low-wage workers will provide them with more purchasing power and boost the local economy.
The discussion is a worthy one, but last week’s report does little to enhance it. The Berkeley group conducting the study, as reported last year by the Albany (N.Y.) Times Union, has conducted numerous studies, often funded by labor groups, while always concluding that an increase to the minimum wage would provide economic benefits. So it is no surprise that the study of Seattle, commissioned by the office of Mayor Ed Murray, was greeted by headlines such as, “Seattle minimum wage hasn’t cut jobs” and “$15 minimum wage in Seattle working fine so far.”
The truth is more nuanced, and unearthing it requires the kind of study being conducted by a team at the University of Washington. As part of ongoing research, that group concluded last year that the early stages of Seattle’s minimum-wage law resulted in the desired pay increases for low-wage workers but a slight decrease in employment levels. The report also said, “We do not find compelling evidence that the minimum wage has caused significant increases in business failure rates” — which is a favorite talking point of those who oppose wage increases.
Most important, the University of Washington study is continuing, eventually covering both boom and bust times. That will be essential to gauging the long-term impact of a debate that typically relies primarily upon economic theory at the expense of evidence. For example, a much-repeated article in 2015 claimed that an inordinate number of Seattle restaurants were closing because of the wage increase, but a follow-up article by The Seattle Times found that to be blatantly misleading. One restaurant owner cited in the original article told the Times that she was closing one restaurant but opening two others: “I’m totally on board with the $15 min. It’s the right thing to do … Opening more businesses would not be smart if I felt it was going to hinder my success.”
As The Columbian has asserted editorially in the past, the most effective way for an employee to increase their wages is to develop skills that employers find desirable. Through experience or education, a worker can enhance their value to those who do the hiring and determine the wages.
In the meantime, discussion will rage over what is an appropriate minimum wage and the impact such a wage has upon the economy. Washington voters in November approved incremental increases raising the statewide minimum to $13.50 by 2020. It all will add to the petri dish that is Seattle’s experiment with the minimum wage.