Reference is made to this seed, posted June 28: Seattle's Minimum Wage Hike May Have Gone Too Far - FiveThirtyEight
The seeded article cites a study by the University of Washington indicating negative impacts from Seattle's increased minimum wage. The viner also added links to his own articles asserting negative impacts, failing to note, however, that neither the seeded article nor the study on which it's based claim the findings to be dispositive of the issues.
Since the study's publication, the response has been predictably heated and mixed. Below are three critiques (linked and excerpted with minor edits) of the study's methods and conclusions. There is also information about what may be the most important issue of all: how higher minimum wages can and do lift millions of workers and their families out of poverty. With that in mind, I hope you all find the following enlightening and a basis for further discussion about the minimum wage for Seattle in particular and the U.S. in general:
WaPo: Seattle’s higher minimum wage is actually working just fine: Here's what's wrong with a University of Washington study that found it hurt low-wage workers.
Seattle’s economy is as strong as ever. The Seattle unemployment rate in April, for example, was 2.6 percent, the lowest it has been in nine years.
The University of Washington's findings are out of step with a large body of research. A recent University of California study shows that Seattle’s minimum wage is having its intended effects. As economists Ben Zipperer and John Schmitt have noted, Seattle’s increase “is within the range of increases that other research has found to have had little to no effect on employment."
Analysis suggests that UW's "mehodology fails to account properly for the booming Seattle labor market
UW's data exclude workers at businesses that have more than one location, such as Starbucks and McDonald’s. Almost 40 percent of Washington state workers are at multi-location businesses. In UW's earlier work, including workers at multi-location businesses made the effects of the minimum wage look more positive.
UW does not present enough data to assess its “synthetic control” in Washington — areas to which they compare Seattle. The Seattle labor market is not necessarily comparable to others.
UC researchers take a better approach, using a synthetic control akgorithm that matches Seattle with similar counties across the US, public data from the Bureau of Labor Statistics, ’ and multi-location businesses in their analysis.
The Seattle minimum wage increase, like every minimum wage increase in American history, has lifted the wages of low-wage workers and been perfectly fine for the economy
[Note: If you are unable to view the WaPo article, the Santa Fe New Mexican has reprinted it @ http://bit.ly/2s5H6La]
EPI: The “high road” Seattle labor market and the effects of the minimum wage increase: Data limitations and methodological problems bias new analysis of Seattle’s minimum wage
The employment responses estimated by the authors are well outside the bounds of most published research, and indeed all of the research cited by the authors implies much smaller and even no employment changes in response to wage increases similar to those experienced so far in Seattle. After accounting for Seattle’s much higher wage structure, the increase of the minimum wage to $13.00 in the city is within the range of increases that other research has found to have had little to no effect on employment.
The study implausibly finds employment changes due to the minimum wage in parts of the labor market where there should have be none. The study’s own estimates inaccurately imply the minimum wage caused large gains in the number of jobs paying above $19.00 per hour and in the number of hours worked in those jobs—even though those jobs are well above the wage range where the $13.00 minimum wage should be having measurable effects. These spurious results strongly suggest that the study’s methodology fails to account properly for the booming Seattle labor market during the period being studied—a labor market that has been shifting employment from lower-paid to higher-paid jobs.
The study excludes an important group of workers, representing roughly 40 percent of the workforce: those working for employers with businesses in multiple locations. By omitting all multi-location businesses, such as chains, in Seattle, the authors bias their results toward showing job loss if there has been a shift in employment from small, single-location establishments toward larger firms with multiple locations.
[Note: This is an extensive peer review with a great deal more information and analyses.]
The research has significant flaws—most glaringly that its data excludes 40% of the Seattle workforce. It also stands in contrast to a massive trove of actually credible studies showing that raising the minimum wage is a boon for working class families and the communities they live in.
Employers see big benefits, too. Workers stay on the job longer, reducing turnover and training costs. They’re also significantly more productive, according to researchers studying wage increases in the United Kingdom.
There are big benefits for broader society as well. Poverty goes down, as does reliance on public assistance programs—one of the few things both Democrats and Republicans can agree is a net positive. Also improved are infant healthand adult mental health outcomes, including a significant reduction in depression. (At a time when one in six Americans pops an anti-depressant every day, this seems particularly important.)
All images via Creative Commons