Two new studies published last week, one from UC Berkeley and one from the University of Washington’s Seattle Minimum Wage Study Team, are showing near-universal positive results. These results run contrary to dire predictions made when Seattle first signed a $15 minimum wage into law, as local restaurant owners and conservative pundits predicted a massive wave of restaurant and small-business closures.
Of course, many don’t see it that way; the Washington Post declared the UW study to be “bad news” for living wage advocates, while the Seattle Times declared that the minimum wage increase is “costing jobs.”
But according to Paul Constant of Civic Ventures, those publications only examined the study’s abstract, which does sound dire. The paper’s abstract indicates a 9 percent drop in hours worked, and suggests that low-wage worker pay dropped by $125 per month.
Constant says that’s just not true.
“There are a whole bunch of caveats in this working paper, most of which won’t get any attention in the conservative press. And the caveats are important.”
According to Constant, the study ignored multi-location establishments completely, that includes chains like McDonald’s, Starbucks, Walmart, in other words, all of the city’s largest minimum wage employers were completely ignored. The study also incorporates workers earning up to $19 per hour; Seattle’s current minimum wage is $13. Finally, they drew their conclusions by comparing the city to an imaginary model called “Synthetic Seattle,” a theoretical version of the city in which the minimum wage wasn’t increased.
The reality, says Constant, is somewhat different. Seattle’s unemployment rate is currently 2.6 percent, the lowest ever recorded. Median household income has skyrocketed, and local restaurants — most of which, again, were not even examined in the UW study — added 3,000 jobs in 2016, and gave King County, in which Seattle resides, not only the largest growth in 2016 employment in the United States, but also the only county in the country to show an over-the-year increase in wages.
In addition, says Constant, prices have not changed in the city, while new businesses are opening regularly.
“The only way you can make Seattle’s exceptional growth look bad is by comparing it to a fake Seattle where everything is even better.”
What Constant says is actually happening is that the city’s low-wage jobs are disappearing, but they’re not vanishing into thin air: they’re becoming higher-wage jobs and moving beyond the scope of the study. He cites an example of Jimmy John’s drivers in Seattle being hired at $20 per hour; they’re working in food service, but Jimmy John’s is increasing their wages to remain competitive in a high-wage environment, and as such, they’re outside of the scope of a study which only examined jobs earning up to $19 per hour.
Meanwhile, the National Bureau of Economic Research has confirmed the UC Berkeley findings that Seattle’s wage increase has had no negative impact on employment in the city.
The lesson, perhaps, is not to take anything at face value, or trust others’ conclusions too readily. All available data suggests that Seattle’s $15 minimum wage is having nothing but positive results.
[Featured Image by Dan Callister/Getty Images]