A new study on the minimum wage increase in Seattle could upend the national debate on raising hourly pay for the low-income workers, The Washington Post reports.
When Seattle officials voted three years ago to incrementally boost the city’s minimum wage up to $15 an hour, the aim was to improve the lives of low-income workers. But the new study conducted by University of Washington economists indicates the hike has had the the opposite effect. On the whole, the study estimates the average low-wage worker in Seattle lost $125 a month because of the hike in the minimum.
Though Seattle is gradually increasing the hourly minimum to $15 over several years, some employers already have not been able to afford the staggered increases. They’ve cut their payrolls, putting off new hiring, reducing hours or letting their workers go, the study finds.
The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one, according to the study, which was commissioned by the city and published Monday by the National Bureau of Economic Research. The findings have yet to be peer reviewed.
Meanwhile States and cities around the country are continuing to implement increases in the minimum—Gov. John Bel Edwards’ has twice pushed unsuccessfully to raise the minimum wage in Louisiana.
Many studies have previously found the benefits of increasing the minimum wage outweigh the costs in terms of reduced employment—often by a factor of four or five to one.
“This strikes me as a study that is likely to influence people,” says David Autor, an MIT economist was not involved in the latest research. He calls the work “very credible” and “sufficiently compelling in its design and statistical power that it can change minds.”
