Academic Study of Seattle Minimum Wage Law

Posted: March 5, 2019 in minimum wage, Uncategorized
Tags: , , , ,
I find the concept of a minimum wage morally repugnant. It’s the mob telling a business owner how to run their business. You people wouldn’t have jobs or anything if it wasn’t for business owners who continue put up with your whining and crap.
Now for my policy hat. While there may be some small benefit for a subsegment of the low wage population, overall a minimum wage increase harms the very population it claims to help. And thanks to Team Blue! cities we are going to get a great opportunity to study this policy error. (Let’s not forget that ignorant Missouri voters did their part this last election to add to the research database. SMH…)
Russ Roberts hosts a weekly podcast called EconTalk. It’s quite academic in nature and he tends to have great conversations with people that challenge his Liberty oriented perspective.
This week he had on Jacob Vigdor from the University of Washington. Seattle actually put out an RFP for someone to study their minimum wage hike. Vigdor and others from the Evans School of Public Policy won the RFP and conducted the study. 
What did he find?
  • This is the only study of the Seattle minimum wage increase that study the affect on the entire low wage population.
  • Experienced low wage workers saw some net benefit, on average seeing their weekly paychecks go up a super-duper, incredibly large, $20 a week.
  • Inexperienced low wage workers pretty much experienced a wash, reduction in hours, but an increase in pay left them pretty much in the same spot. But…
  • Employers are now hiring less inexperienced workers and looking for more experienced workers. And…
  • Employers are looking for ways to hire less workers and replace them with technology and different business models (i.e. Restaurants that don’t have waiters, you order at a counter, you pick up the food when called. Oh, you want a refill, get it yourself!)
  • Of course, the hiring of less inexperienced workers has a negative effect on young people who are wanting to gain work experience. Also, the quest for more efficient business models either through technology or business structure will reduce employment long term.
  • Job creation does appeared to be reduced. Nothing says helping the masses by reducing the availability of jobs.
  • I especially enjoyed the little tidbit about how numerous people tried to report on Vigdor’s research. Some got it completely wrong, some reported only tidbits of what they found, and some tried to bend it to their ideological narrative. Modern American reporting at its finest. Of course, the problem is most reporters haven’t ever read an article on economics, but somehow they’re supposed to report on it. LOL…

The bottom line: The policy change is recent, so it warrants more study, but it appears that any broad positive benefits are limited (shocker…), and the negative impacts may outweigh any positives.


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