Another study shows the Seattle $15 minimum wage isn't causing an economic meltdown. How it would play elsewhere remains an open question.
My colleague Janet I. Tu reported on a new study of Seattle’s $15 minimum wage by the Institute for Research on Labor and Employment at the University of California, Berkeley.
Focusing on restaurants, the sector with the most minimum-wage jobs, it found that employees were enjoying higher pay while overall employment levels have not been affected. So far, the predictions of doom have not come to pass. Seattle’s economy outperforms nearly every peer in the country. And the step-up to a $15 minimum wage has not made the city stumble. Indeed, by the “virtuous circle” theory popularized by venture capitalist Nick Hanauer, people with better pay spend more, helping businesses and their employees.
Few minds will be changed (are they ever in today’s America?). Today Forbes published a push-back column from the right-wing Employment Policies Institute. Party affiliation and race play a big role in people’s views. According to a poll last year by the Pew Research Center, 52 percent of voters surveyed nationally favored a $15 federal minimum wage. But only 21 percent of Trump supporters did so, vs. 86 percent of Clinton backers. Eighty-nine percent of blacks and 71 percent of Hispanics backed it. But only 44 percent of whites did.
The federal minimum, at $7.25 an hour, these days only applies to 21 states. Even conservative Arizona and West Virginia have higher minimums, $10 and $8.75 respectively. The remainder, plus the District of Columbia, as well as many cities, have enacted higher minimums. Still, it is an influential “wage floor” for millions. The national minimum has been badly eroded by inflation. It reached its peak, in real dollars, in 1968. Republicans in control in D.C. will not raise it.
Most Read Business Stories
- All flights in and out of Paine Field canceled Monday as 5G bars regional jets
- Washington attorney general sues Google over location tracking
- Amazon Go is moving toward the suburbs, starting in Mill Creek
- Seattle home-price growth heats up a bit as much of U.S. cools
- Can anyone satisfy Amazon’s craving for electric vans?
Seattle has an enormous economic wind at its back. This helps the virtuous cycle, too. Such a prosperous city has plenty of people with money to eat out. Admittedly, $15 might not have the same benign effects in smaller, poorer areas. There, more franchisees might eliminate jobs in favor of automation. Teenagers might have fewer entry-level opportunities — although only 45 percent of hourly workers age 16 to 24 were in this category. But $12 an hour? In 2015, the Economist estimated the United States could afford that as a higher floor.
We’re early into this experiment. More years of data will be needed for conclusive information. But so far, the “blue-city hellhole” is doing well.
Today’s Econ Haiku:
When Boeing wants incentives
They’ll have our number