We're wrapping up the first year of Seattle's increased minimum wage. Critics say it's killing jobs. The evidence says otherwise, but there's a catch.

Share story

Earlier this year, the city of Seattle’s ordinance requiring a $15 minimum wage took effect and since then the right-wing blogosphere has been filled with predictions of doom.

The reality: We don’t know how it is affecting employment yet.

Here’s what we do know: Employment in food service and drinking places, establishments with large numbers of minimum-wage jobs, was 110,000 in October, the most recent month available. This is slightly higher than in April, when the new law was passed. It is well above the 96,700 peak before the Great Recession.

Retail trade employment hit a record 171,500 in October, compared with the pre-recession high of 148,700.

This week, save 90% on digital access.

This good news comes with a big caveat. The data are for the Seattle-Bellevue-Everett metropolitan division. They aren’t broken out for the city.

Also, we have a ways to go before the wage really hits $15. The largest employers must pay it beginning in 2017; smaller companies may have until 2021.

So, as I wrote earlier, it is an experiment and if any city is prosperous enough to attempt it, that city is Seattle.

We know a few things about the minimum wage. For example, the federal minimum peaked in 1968 adjusted for inflation. A new report from the Federal Reserve Bank of San Francisco summarizes the academic research. In general, it shows minor job losses for teens and the lowest-skilled from a higher minimum. More recent research is more ambiguous, indicating there may not be a negative effect at all.

Stay tuned.


Today’s Econ Haiku:

 Animal spirits

Will Seattle overbuild?

Run, ask a lemming


 

Custom-curated news highlights, delivered weekday mornings.