by Robert Carbery
Seattle, Washington, with its highest-in-the-nation minimum wage, has discovered how high is too high.
In January 2016, Seattle’s minimum wage jumped to $13 an hour from $11 for large companies. New research released in late June by a team of economists at the University of Washington points to the wage hike having come at a significant cost to low wage employees: The increase led to steep declines in employment for low-wage workers and a drop in hours for those who kept their jobs. The slashing of jobs and hours resulted in, on average, $125 less per month because of the higher wage floor.
The socialist city of Seattle is experimenting in economics and are ultimately hurting the very people they are intending to help. Some conservative states have stepped in to stop the minimum wage hike expansions, with some moving to block cities from increasing their local minimums. But most cities on the West Coast are moving full speed ahead in increasing the minimum wage thinking there are nothing but benefits to come from doing so.
Most past research has found that modest increases to the minimum wage have had little impact on employment, however, those studies are nowhere near comparable to what is going on in the stupid-liberal city of Seattle where an experiment in democracy has gone horribly wrong. Sure, it’s a high cost city to live in, but the minimum wage is not a paycheck one is meant to live off of forever. Seattle has gone too far and are destroying low-wage jobs, hours, and accelerating the push for robots to take over these low-skill jobs.
Even some liberal economists have expressed concern that employers might respond differently to a minimum wage of $12 or $15, which affects many part-time fast-food and retail employees who usually make up most of the ranks of minimum wage earners. Other economists point to there not being enough evidence yet to predict the impact of minimum wages that high. The new laws in Seattle and other cities, then, could provide an ideal testing ground. The laboratories of democracy are now providing us the early returns, and they’re far from positive for low-wage workers as the market will adapt to higher costs as it always does.
Seattle’s minimum wage has been setting the pace nationwide. In 2014, the city passed the law raising the minimum from $9 an hour, then the nation’s highest, to $15 an hour over the next few years. Economists are studying the effects of this ridiculous measure that liberal lawmakers claim are helping the working poor. But it only helps them if they keep their job and continue working sufficient hours to make enough to feed themselves and their families.
Liberal commentator and former Secretary of Labor, Robert Reich, says that Seattle is right in its aggressive move to $15.
He makes a theoretical argument about how the gains from a higher minimum wage extend beyond those making more money, leading to more sales, growth, and jobs. Increased purchasing power would surely help spur economic growth but not at the expense of jobs and hours worked by low-wage workers. With higher costs come market consequences that many liberals do not seem to comprehend.
At least Reich says that he would not advise raising the minimum from the current federal wage of $7.25 an hour to $15, calling it “too big a leap all at once.” But he still applauds Seattle’s efforts moving incrementally to $15 and segmenting the increases based on company size. He does not seem to be concerned about the loss of employment whatsoever, errantly claiming that an increased labor force will result as more people flock to the city for the $15 an hour retail job that they did not already have.
Reich references another Reich (no relation), Michael Reich of UC Berkeley in recent research pointing to the success of the spiked minimum wage in Seattle. However, Mr. Reich probably did not know that a union PR firm and Seattle Mayor Ed Murray’s office coordinated with the other Mr. Reich on countering the damning UW research mentioned previously.
Recently published emails reveal that the mayor’s office coordinated with academics and a public relations firm to rush a study out to downplay the job and wage losses discussed in the UW study.
The mayor’s office asked Berkeley economist Michael Reich to remove any reference to the Washington study to prevent it from receiving exposure.
“Leave the critique of the UW study until later,” mayoral staffer Carlo Caldirola-Davis said in an email obtained through a public records request from the pro-free market think tank Employment Policies Institute. “The release still calls out the UW study. Don’t want your positive news to serve as a teaser for the UW study.”
This news shows that Reich is far from a disinterested and unbiased academic.
“These emails are further proof that the Berkeley team is motivated by ideology, not evidence,” Michael Saltsman of the Employment Policies Institute told the Washington Free Beacon. “The contrast with the University of Washington team is not a flattering one: While Berkeley rushed its results to meet a political timeline, the UW team took its time to solicit scholarly feedback to refine its results.” Politicians will do anything to hide the truth, using economists and academics to do their dirty work.
Sure, the rent is too damn high here in Seattle. But an increased minimum wage will end up hurting more people in the end. We are already seeing companies adapt in a negative way for low-wage employees and it’s only going to get worse from here as more firms are affected year after year.
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by Robert Carbery