A Tale of Two Cities

So, Seattle’s minimum wage is now $13/hr.  What effect has that had?

According to one story, nothing bad:

The city of Seattle is in the process of gradually phasing in a $15-per-hour minimum wage: It has now reached $13 for workers at large companies and will move up to $15 in 2021 for all workers. As the wage rises, the city is providing a lot of data on the effects of the policy, and that data is continually proving helpful to activists as they work to raise the wage in other cities, states, and nationally (and embarrassing to the economists who sounded alarm bells about how damaging a living wage would be for the city).

One common critique of higher minimum wages is that they also raise the cost of living. But last year, an initial study from the University of Washington found that retailers, despite having to pay their workers more, weren’t raising prices. Another is that higher pay will lead to fewer shifts and fewer jobs. And while those same UW researchers are analyzing the data, other researchers at UC Berkeley’s Institute for Research on Labor and Employment (IRLE) used an innovative model to prove that the city’s increased minimum wage has had no negative effect on job availability.

According to another, nazzo fast, Guido:

In January 2016, Seattle’s minimum wage jumped from $11 an hour to $13 for large employers, the second big increase in less than a year. New research released Monday by a team of economists at the University of Washington suggests the wage hike may have come at a significant cost: The increase led to steep declines in employment for low-wage workers, and a drop in hours for those who kept their jobs. Crucially, the negative impact of lost jobs and hours more than offset the benefits of higher wages — on average, low-wage workers earned $125 per month less because of the higher wage, a small but significant decline.

$125/month is $1,500/year or about a 6% drop for a full-time minimum wage worker at $11/hr. Not to mention that “steep decline in employment for low-wage workers.”

Which story do you believe? The one sourced out of a UC Berkeley report, or the one sourced out of a University of Washington report?

And how many jobs were lost due to closed businesses related to the minimum wage increase?

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