Current Events > Seattle's large minimum wage increases a disaster

(+) Yeah! (+)

https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers
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A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals

lol that's how they title an article?
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Could you pose a site that isn't awful?
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>Washington Post

FAKE NEWS
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more like
>Washington Post

pay us money or you can't read this article
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I posted this study earlier, just not journalistic coverage of it
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well, I assume, I'm paywalled from WaPo
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Dustin1280 posted...

Could you pose a site that isn't awful?

https://fivethirtyeight.com/features/seattles-minimum-wage-hike-may-have-gone-too-far/
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if you google the title and go through there you can read it

When Seattle officials voted three years ago to incrementally boost the city's minimum wage up to $15 an hour, they'd hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.

The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.

The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed.

to quote myself in my other topic:

Balrog0 posted...

http://www.nber.org/papers/w23532

This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.

interesting

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Thanks, for the links and posts.

Not really surprised, you raise minimum wage and suddenly corporations will cut their budget so they don't have to pay as much.
SHOCKER
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Another ProudClown topicwhere he never read the actual article
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Washington Post is fake news so we have to be consistent

I don't think $15 minimum wage is a good idea tho. If it doesn't work in Seattle it won't work anywhere. And the entire state of California is going to $15 minimum wage by 2022 I think...
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There has to be some way to make something work.

You have to make over double minimum wage to even qualify for a modest rental where I live
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Balrog0 posted...

if you google the title and go through there you can read it

When Seattle officials voted three years ago to incrementally boost the city's minimum wage up to $15 an hour, they'd hoped to improve the lives of low-income workers. Yet according to a major new study that could force economists to reassess past research on the issue, the hike has had the opposite effect.

The city is gradually increasing the hourly minimum to $15 over several years. Already, though, some employers have not been able to afford the increased minimums. They've cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study found.

The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, conducted by a group of economists at the University of Washington who were commissioned by the city. The study, published as a working paper Monday by the National Bureau of Economic Research, has not yet been peer reviewed.

to quote myself in my other topic:

Balrog0 posted...

http://www.nber.org/papers/w23532

This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.

interesting

Does the study say which kind of minimum wage jobs this is affecting the most? Thay last sentence is saying this increase isn't impacting​ restaurants right?
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hockeybub89 posted...

There has to be some way to make something work.

You have to make over double minimum wage to even qualify for a modest rental where I live

Yes, there is a way to make it work. Get a better job or get roommates.
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I have read several surveys on this and the results are so mixed that it is hard to find a conclusive result on this
secondly most economists are solidly right leaning on economic issues so.......
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for instance here is the Times questioning the methodology
https://www.nytimes.com/2017/06/26/business/economy/seattle-minimum-wage.html
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Obvious things are obvious.

coolboy11 posted...

for instance here is the Times questioning the methodology
https://www.nytimes.com/2017/06/26/business/economy/seattle-minimum-wage.html

Now we wait
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people are now getting by with slightly less money but for moderately less time spent working and this is an outrage

Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.

But...but...this was supposed to make it so poor people can buy more things putting more money into the economy. What happened?

Oh yeah, they got their hours and benefits slashed just like anyone with a brain said would happen.
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I guess no one cares about Coolboy's link, lol.
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I've never been in favour of these minimum wage increases because they're just going to fast track the death of small businesses in favour of franchises.

Overly simplistic, but economies of scale are a big problem here. Starbucks won't suffer. The little mom and pop on the corner that does the really nice breakfast rolls and puts a little biscuit on the side of your latte will, though.
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tehzeldafanboy posted...

I guess no one cares about Coolboy's link, lol.

it's not that I don't care about it, it's just that their complaints are sound. similarly, the complaint against them (their overreliance on restaurant labor data) is also a valid complaint. Like most 'scientific' studies, the authors of these results aren't claiming to have certain knowledge, they are using a novel method for exploring the impact a minimum wage has in different contexts.

I'm still waiting to review the paper myself, but actually I don't see the main complaint they bring up (the booming economy in Seattle) to be a very good rejoinder since their complaint is that there aren't any other places in Washington that are like Seattle. That's true, but a synthetic control doesn't seem inherently more misleading to me than comparing Seattle to, say, Denver. It's not like you wouldn't need to use various controls either way to attempt to make it an apples to apples comparison

the big knock on it is the lack of chain-level data, but would people who are pro-raising the minimum wage really prefer, "minimum wages kill mom and pop shops, walmart hiring soars" as a better headline?

In any case anyone who is picking on this study and saying its obvious is just an ideological shill. Just like any one who latches on to any study just because it confirms their bias. That goes both ways
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Balrog0 posted...

it's not that I don't care about it, it's just that their complaints are sound.

I'm mainly making a jab at the ideologically-driven people you mentioned who are saying "well duh!" instead of addressing the valid criticisms of TC's study found in Coolboy's article. Obviously you don't have a reason to address it.
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ideologues suck bro

jmo though
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Balrog0 posted...

ideologues suck bro

qft

FrenchCrunch posted...

You obviously love great journalism.


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Several combinations of browser configs and useragent spoofing couldn't get that to happen for me.

Are you using an adblocker?
Wipe your washpo cookies and see what happens.

voldothegr8 posted...

Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.

But...but...this was supposed to make it so poor people can buy more things putting more money into the economy. What happened?

Oh yeah, they got their hours and benefits slashed just like anyone with a brain said would happen.

So should the min wage never be raised? It's about finding the correct minimum for the area.

CruelBuffalo posted...

So should the min wage never be raised?

No.
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Balrog0 posted...

ideologues suck bro

jmo though

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CruelBuffalo posted...

It's about finding the correct minimum for the area.

The Invisible Hand will work it out, if left alone to do so.

Questionmarktarius posted...

CruelBuffalo posted...

It's about finding the correct minimum for the area.

The Invisible Hand will work it out, if left alone to do so.

When left alone the invisible hand crushes employees.
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CruelBuffalo posted...

So should the min wage never be raised?

Not really. If you think about it, there is never a scenario where raising the minimum wage does more good than harm. If you raise it a small manageable amount, it has a negligible effect either way since most businesses pay higher than minimum wage. But some jobs WILL be lost. If you raise the minimum wage by 1 cent across the U.S., probably like 50 people will lose their jobs. On the other hand, as you raise it by larger increments, you price out larger chunks of the unskilled labor pool, which is a very very bad thing. So, best case scenario: nothing happens. Worst case scenario: layoffs, automation, hours cut, benefits cut, prices raise, job growth slows, businesses close, and the list goes on.

creativerealms posted...

Questionmarktarius posted...

CruelBuffalo posted...

It's about finding the correct minimum for the area.

The Invisible Hand will work it out, if left alone to do so.

When left alone the invisible hand crushes employees.

Even if we were to accept this nonsense, they would still be employees under the Invisible Hand.

Unlike the socialism model that leaves them unemployed
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Annihilated posted...

CruelBuffalo posted...

So should the min wage never be raised?

Not really. If you think about it, there is never a scenario where raising the minimum wage does more good than harm. If you raise it a small manageable amount, it has a negligible effect either way since most businesses pay higher than minimum wage. But some jobs WILL be lost. If you raise the minimum wage by 1 cent across the U.S., probably like 50 people will lose their jobs. On the other hand, as you raise it by larger increments, you price out larger chunks of the unskilled labor pool, which is a very very bad thing. So, best case scenario: nothing happens. Worst case scenario: layoffs, automation, hours cut, benefits cut, prices raise, job growth slows, businesses close, and the list goes on.

You know that same study TC posted spoke about how the cities that only mariginally raised min wage near Seattle by a less drastic amount saw an increase in monthly salary for low income workers right?

CruelBuffalo posted...

You know that same study TC posted spoke about how the cities that only mariginally raised min wage near Seattle by a less drastic amount saw an increase in monthly salary for low income workers right?

What did their unemployment rate do?
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Of course it doesn't. Now business owners will raise prices of items in that city or the owners will let go workers and overload their current workers to prevent pay loss.

There's no way a minimum wage increase would help.The wage takes one step up the ladder, the price of goods takes one step up the ladder. This only leaves those who can't climb the ladder to stay in poverty and not move as it gets harder.
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Mal_Fet posted...

CruelBuffalo posted...

You know that same study TC posted spoke about how the cities that only mariginally raised min wage near Seattle by a less drastic amount saw an increase in monthly salary for low income workers right?

What did their unemployment rate do?

I'm assuming since it's looking at the overal picture and they didn't mention it didn't change much, but I'd have to find the article again. They were discussing it on NPR this morning.

CruelBuffalo posted...

Annihilated posted...

CruelBuffalo posted...

So should the min wage never be raised?

Not really. If you think about it, there is never a scenario where raising the minimum wage does more good than harm. If you raise it a small manageable amount, it has a negligible effect either way since most businesses pay higher than minimum wage. But some jobs WILL be lost. If you raise the minimum wage by 1 cent across the U.S., probably like 50 people will lose their jobs. On the other hand, as you raise it by larger increments, you price out larger chunks of the unskilled labor pool, which is a very very bad thing. So, best case scenario: nothing happens. Worst case scenario: layoffs, automation, hours cut, benefits cut, prices raise, job growth slows, businesses close, and the list goes on.

You know that same study TC posted spoke about how the cities that only mariginally raised min wage near Seattle by a less drastic amount saw an increase in monthly salary for low income workers right?

A lot of SeaTac employees, who have been on $15 an hour for years now, bitched about and still are bitching about these same things, their perks and benefits got slashed and hours cut.
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@JustMyOpinion posted...

What a shock. Businesses tend to function better with less restrictions.

John Galt died.

He mentioned you being wrong.
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Imagine thinking you deserve $20 an hour for flipping burgers at a McDonalds
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creativerealms posted...

Questionmarktarius posted...

CruelBuffalo posted...

It's about finding the correct minimum for the area.

The Invisible Hand will work it out, if left alone to do so.

When left alone the invisible hand crushes employees.

The Heavy Hand swatted employees out of the workforce entirely

https://www.theatlantic.com/business/archive/2017/06/seattle-minimum-wage/531714/

The University of Washington researchers looked at a more detailed pool of data than some minimum-wage researchers before them, combing through numbers collected for the local unemployment-insurance program. When compared to data from other parts of Washington state, which represented a similar economy with no minimum-wage hikes, these numbers indicated that the hike had a major effect. The number of jobs paying less than $13 an hour dropped by 39 percent, they found, with the number of jobs paying less than $19 an hour falling by a smaller amount. At the same time, overall employment in Seattle increased by 13 percent, judging by headcount, and 15 percent, judging by hours. But many low-wage workers suffered from hours, job, and earnings losses. The wage hike pulled the bottom rung off of the ladder, in other words.

All that's been accomplished is increasing the size of an "unhireable" class whose time is just not worth $13 or $15 an hour, for various reasons.
As prices go up in response to rising labor costs, and demands for public assistance go up from people who just cannot get a job anymore at the mandated wage floor, everyone has ended up slightly worse off overall.

I love how people who don't even live near Seattle do research about it.
That would be like me preaching about Boston.

TBQH, the minimum wage has effected the game in ways not even mentioned.

Big business has felt nothing at all, as most hire above $15/hr.

More than any state I have ever worked in, Washington is a very competitive workplace.
Take up slack or go home. People even conspire to kick others to the curb. It's fairly cutthroat from low wage all the way up.

So imagine what happened when employees get paid more. Your connections that got you the job won't save you from the fire. Perform or get shitcanned.

Aside from smaller food related establishments, (bakeries, niche eateries), the amount of employees hasn't lowered as much as people think.

What a lot of companies are trying to do is send the wagers home early to compensate. Oh he had a full day Monday, so maybe call him/her off one day or send home early on Tuesday.

Running a tight ship at any given moment while keeping spending down.

Meanwhile Seattle itself is becoming the land of 6 figures. Such a giant tech boom that some companies have other hq in Tacoma just to handle it.

So what of the burger flippers? It's rare to see anyone without braces in the drivethru now.
You can be certain that instead of raises, it will just be a new face next time you stop by. Save for Starbucks that actually has a lil love for their employees. (a lil)

Most importantly, Seattle and the rest of the state are in the middle of a major shift. Washington hasn't even agreed on the 2017-19 budget.

All in all though, plenty of work to be found in Washington, and the state government is even setting up jobs in Seattle just for low income families in the near future.

People who are writing these articles aren't taking everything into consideration either.
My home's value is increasing $40k per year. Write about that Washington Post.
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