Seattle’s decision to hike its minimum wage up to $13 an hour—on its way to $15—ended up costing its low-wage workers time on the job, hundreds of dollars of annual income, and a shot at a better livelihood.
That is a reasonable conclusion one could draw from a blockbuster, if not yet peer-reviewed, new study on the city’s famed minimum-wage increases. The research, performed by a group of academics from the University of Washington, looks at detailed data on the earnings and hours of workers affected by the hike of the wage floor from $9.47 an hour to $11 in 2015, and from $11 an hour to $13 an hour in 2016. It concludes that, for low-wage workers, that second wage increase reduced hours worked by nearly 10 percent and earnings by an average of $125 a month. The findings, though preliminary, call into question years of economic research and the decisions of dozens of states and cities to bump their wage floors up.
Granted, there are reasons to think that the study’s results might differ from the reality on the ground. The paper excluded a number of larger Seattle businesses from its analysis, for one, and could not cleanly disaggregate whether the changes in the structure of the labor market were due to the booming local economy or to the minimum-wage hike. Still, it underscores an uncomfortable truth for liberals pushing for wage hikes across the country: There is some minimum wage at which the costs outweigh the benefits, and Seattle might have found it.