The city’s escalating minimum wage has meant a slight increase in pay among workers earning up to $19 per hour, but the hours worked in such jobs have shrunk, a study commissioned by the city found. It estimates there would be 5,000 more such jobs without the Seattle law.
The UW team published its first reportlast July on the impact of the first jump in Seattle’s minimum wage, which went in April 2015 from $9.47 to $10 or $11 an hour, depending on business size, benefits and tips.
This latest study from the UW team looks at the effects of both the first and second jumps. The second jump, in January 2016, raised the minimum wage to $10.50 to $13. (The minimum wage has since gone up again, to the current $11 to $15. It goes up again in January to $11.50 to $15.)
The team concluded that the second jump had a far greater impact, boosting pay in low-wage jobs by about 3 percent since 2014 but also resulting in a 9 percent reduction in hours worked in such jobs. That resulted in a 6 percent drop in what employers collectively pay — and what workers earn — for those low-wage jobs.
For an average low-wage worker in Seattle, that translates into a loss of about $125 per month per job.
“If you’re a low-skilled worker with one of those jobs, $125 a month is a sizable amount of money,” said Mark Long, a UW public-policy professor and one of the authors of the report. “It can be the difference between being able to pay your rent and not being able to pay your rent.”
The report also estimated that there are about 5,000 fewer low-wage jobs in the city than there would have been without the law.
The researchers focused on “low wage” jobs — those paying under $19 an hour — and not just “minimum wage” jobs, to account for the spillover effect of employers raising the pay of those making more than minimum wage.
For instance, an employer who raised the pay of the lowest -aid workers to $13 from $11 may have then given those making $14 a boost to $14.50. (The team had also tested lower- and higher-wage thresholds for the study, and the results did not change, members said.)
To try to isolate the effects of the minimum-wage law from other factors, the UW team built a “synthetic” Seattle statistical model, aggregating areas outside King County but within the state that had previously shown numbers and trends similar to Seattle’s labor market.
The researchers then compared what happened in the real Seattle from June 2014 through September 2016 to what happened in the synthetic Seattle.
In addition to earnings, the report analyzes data on work hours— relatively rare in minimum-wage studies, the researchers said, since Washington is one of only four states that collects quarterly data on both hours and earnings.
Chosen excerpts by Job Market Monitor. Read the whole story at UW study finds Seattle’s minimum wage is costing jobs | The Seattle Times