
Seattle’s minimum-wage increase made the most vulnerable workers poorer - paradygm
https://qz.com/1014759/seattles-minimum-wage-increase-made-the-most-vulnerable-workers-poorer/
======
res0nat0r
I assume it is the study referenced below, I'd wait for more peer review.

[https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-s...](https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-
study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/)

Top comment:

>A non-peer reviewed study that left out all large employers. Seriously! I
can't believe the Post did a story on this. Wait for it to actually get
published, and then we can talk about how any study on employment that leaves
out all the national chain stores is totally bogus. Really this is very shoddy
work. I'm disappointed with the Post for highlighting it. At least wait until
it got published. This is one step above click-bait.

~~~
gcb0
this made the rounds yesterday.

if anyone read the paper, they subjected exclusively fast food workers, and
excluded employers that have locations out of state.

now let that sink in. exclusively local fast food places.

yet lots of places were probably forced to report it. one newspaper even
reported it ironically. the title had a quotation in quotes to read something
like "a 'very credible' study says..." .

------
hedora
Unless the article is wrong, the authors of the study didn't actually track
people that were paid low wages before and after the minimum wage increase.

Instead, they just looked at the number of hours worked for under $19/hour
before and after the wage increases. Since $19 is close to the new minimum
wage, it could be that the pay scales of everyone shifted up a bit, and jobs
below $19 are now a lower percentage of all jobs.

Unless I'm missing something, this study is too sloppy to be newsworthy.

------
startupdiscuss
It would be interesting to see a few other things:

1\. Even though it made some people better off, and others worse off, did it
reduce the number of people who need assistance?

2\. Even if the amount of assistance is the same, if the number of people who
need assistance is reduced, this would be a win.

To put it another way: if some people are not getting a living wage, and
raising the minimum wage doesn't help them, then the only way to help them is
direct payments (and, maybe education which has to paid for).

But if raising the minimum wage reduces the total number of these, it sort of
"clarifies" who needs the help and who has skills that can be deployed.

------
sgwealti
Counterpoint:

[http://www.thestranger.com/slog/2017/06/26/25238844/the-
morn...](http://www.thestranger.com/slog/2017/06/26/25238844/the-morning-news-
ignore-the-report-about-how-15-an-hour-is-hurting-seattles-poor-weekend-heat-
breaks-records)

Michael Reich, a UC Berkeley economics professor who was lead author on the
Berkeley report, said he found the UW team’s report not credible for a number
of reasons.

He said the UW researchers’ “synthetic” Seattle model draws only from areas in
Washington that are nothing like Seattle, and the report excludes multisite
businesses, which employ a large percentage of Seattle’s low-paid workforce.
The latter fact was also problematic, he said, because that meant workers who
left single-site businesses to work at multisite businesses were counted as
job losses, not job gains in the UW study.

Reich also thought the $19 threshold was too low, and he said the UW
researchers’ report “finds an unprecedented impact of wage increases on jobs,
ten times more than in hundreds of minimum wage and non-minimum wage studies.
… “There is no reason,” he said, that Seattle’s employers of low-paid workers
“should be so much more sensitive to wage increases.”

------
dalbasal
This is one of those topics that really shows economics being the "dismal
science."

The "economics 101" ideas applied to price floors (which ie what a minimum
wage is) predicts lower volume (fewer jobs/hours). It doesn't predict how
much, so it still might be worth having a minimum depending on the demand
curve (which is never really known). OTOH, even the biggest proponents of
minimum wage would admit that at some level minimum wage makes things worse.
Most would agree that a $1,000 minimum wage would cause unemployment. Still,
there's no real way of determining the "correct" amount, and even proponents
seldom come up with a figure.

Anyway, being the dismal science economists just don't have any good way of
settling this. This isn't the first study on the topic. If you look at it from
a meta-research perspective, it looks like a null result with findings on both
sides.

~~~
anonacct37
Some quick clarification. In the US we don't have to rely as much on guess
work. We have data on based on 20 years of $9-$10/hr minimum wage (in
inflation adjusted dollars).

[https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_Sta...](https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States#/media/File:History_of_US_federal_minimum_wage_increases.svg)

~~~
dalbasal
A little further down the same article is "economic effects" where they cite
some studies relating to this data. Results & interpretations fall on both
sides of the equation. Whatever the effect of minimum wage is, we don't know
from empirical research.

------
scarface74
The answer is really simple -- get rid of the minimum wage entirely, let the
free market determine how much someone should pay and increase the earned
income tax credit amount and eligibility and make it easier for employers to
distribute the credit with their employees paycheck. If that means slightly
higher business taxes so be it. But, on the other hand, I'm a strong believer
in "trickle up economics". If more poor people have money to spend it should
help the economy.

~~~
manicdee
How does your solution give poor people more money?

~~~
scarface74
It gives poor people more money by a) "increasing the earned income tax
credit" \- a direct benefit from the government. b) Lower minimum wage makes
it cheaper to hire people than to automate. C) More money flowing through the
economy increases demand. Where there is demand, people find a way to start
business to increase supply.

You'll notice that's just the opposite of "supply side economics".

------
lastflowers
Whoops: [http://www.epi.org/publication/the-high-road-seattle-
labor-m...](http://www.epi.org/publication/the-high-road-seattle-labor-market-
and-the-effects-of-the-minimum-wage-increase-data-limitations-and-
methodological-problems-bias-new-analysis-of-seattles-minimum-wage-incr/)

Now most will latch onto the study (and their priors) and politicians will
abandon any attempt to raise Minimum wage citing this and round and round we
go...

------
klarrimore
Better article imo
[https://www.bloomberg.com/view/articles/2017-06-26/seattle-s...](https://www.bloomberg.com/view/articles/2017-06-26/seattle-
s-painful-lesson-on-the-road-to-a-15-minimum-wage)

------
amelius
I wonder how this result translates to universal basic income.

