Researchers interviewed 40 low-wage workers with children.
THIS month marks the beginning of Seattle’s multiyear transition to a $15 minimum wage. Depending on whom you are inclined to believe, higher wages might reduce inequality and make low-wage workers better off, or drive businesses and jobs out of the city.
Although proponents and opponents have argued forcibly for their positions, the simple truth is that we don’t know what will happen. As members of the nine-person team charged by the City of Seattle to study the effects of the minimum wage, we aim to find out.
Evidence from other places and other times, collected by labor economists over decades, is contested. And no locality to date has raised wages as substantially as the Seattle wage scale promises to do over the next few years. Moreover, the economic evidence has mostly focused on employment effects without carrying the analysis forward to study poverty and inequality.
That’s bad news for those who like firm forecasts. The good news, however, is the city is committed to rigorously studying the effects of the minimum-wage scale. The City Council passed a resolution calling for a study the same day it passed the ordinance raising the wage.
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Our team, selected after the city issued an open request for proposals, seeks to provide an accurate and comprehensive view of the costs and benefits of the minimum-wage policy to the citizens and leaders of the city, as well as to other local governments considering similar legislation.
How are we going about this? Our methods run the gamut from “big data,” which is comprehensive but impersonal, to “small data,” which may not be fully representative but is capable of capturing greater nuance and building understanding of why we observe what we observe.
We will be able to comprehensively examine trends in employment, earnings, workers’ hours and the number of businesses. Every quarter, almost all employers report earnings and hours to the Washington State Employment Security Department (ESD). Our research team includes two ESD economists who will scour this data with us, looking for changes in key outcomes.
Applying advanced statistical methods to census and other national data will let us examine how Seattle’s experience compares to a control group made up of cities and regions where wages stayed the same.
Another source of information comes from talking to those affected. University of Washington research staffers are calling and emailing more than 600 Seattle employers, asking about their current staffing, compensation scales and business models, and how they plan to adjust to the wage changes.
We chose participating businesses at random from all firms licensed to do business in the city. This ensures we get a representative group of employers, not just those who are politically active. We are focusing on employers most likely to be affected — restaurants, retailers, small manufacturers, immigrant-owned businesses and nonprofit human services.
Research team members are also interviewing 40 low-wage workers with children. These families will tell us whether, and how, the minimum wage has made good on its promise to improve well-being. Higher incomes might ease and enrich parents’ and children’s lives. However, higher hourly earnings might come with shifting schedules, changing prices, different job opportunities or adjustments to public supports such as food assistance or subsidized housing. To complement these reports, we are also tracking prices by checking websites and in-person visits to retailers.
All of our research follows strict confidentiality protocols, and the UW has state-of-the-art data security in place. The city will not know which individuals and companies are participating. Updated information about our study and its findings will be available at our website.
We don’t yet know what the impact of today’s wage increase will ultimately be. As social scientists, our role is simply to report what happens and to leave it to the citizens and leaders of Seattle to decide whether the effects are good or bad.