Study Reveals Workers Earn Less After Minimum Wage Hike
Posted: 06-29-2017 08:49 PM
A substantial boost in the minimum wage in Seattle actually hurt low-wage workers by reducing hours and income, a bombshell study found — raising concerns about the impact of New York’s decision to raise its wage.
Like New York, Seattle is steadily increasing the minimum wage to $15 an hour.
The analysis, conducted by the University of Washington, said Seattle’s most recent increase to $13 per hour increased pay in low-wage jobs by 3 percent since 2014. But the change also resulted in a 9 percent reduction in hours worked, leading to an overall 6 percent pay drop — offsetting the benefits of the pay hike.
The study estimated that the typical low-wage worker in that city lost $125 a month. Analysts said the wage hike cost Seattle at least 5,000 jobs.
New York state’s minimum wage also goes to $15 by 2021. In New York City, it will reach that target on Dec. 31, 2018.
Critics said the bad news shouldn’t come as a surprise. “This is what we predicted would happen in New York,” said Zach Hutchins, a spokesman for the Business Council of New York. “That there would be fewer hours and fewer jobs around.”
He said the phased-in hikes approved by Gov. Cuomo and the Legislature last year — with the strong backing of labor unions — has led fast-food restaurants like McDonald’s to automate more jobs and reduce employment.
Michael Saltsman of the pro-business Employment Policies Institute said, “The fight for $15 is colliding with economic reality in Seattle and San Francisco, with credible reports from top-notch economists demonstrating that wage hikes do indeed cost jobs . . . in short, there are no economic rationales for pursuing an extreme wage hike — only ideological ones.”
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Like New York, Seattle is steadily increasing the minimum wage to $15 an hour.
The analysis, conducted by the University of Washington, said Seattle’s most recent increase to $13 per hour increased pay in low-wage jobs by 3 percent since 2014. But the change also resulted in a 9 percent reduction in hours worked, leading to an overall 6 percent pay drop — offsetting the benefits of the pay hike.
The study estimated that the typical low-wage worker in that city lost $125 a month. Analysts said the wage hike cost Seattle at least 5,000 jobs.
New York state’s minimum wage also goes to $15 by 2021. In New York City, it will reach that target on Dec. 31, 2018.
Critics said the bad news shouldn’t come as a surprise. “This is what we predicted would happen in New York,” said Zach Hutchins, a spokesman for the Business Council of New York. “That there would be fewer hours and fewer jobs around.”
He said the phased-in hikes approved by Gov. Cuomo and the Legislature last year — with the strong backing of labor unions — has led fast-food restaurants like McDonald’s to automate more jobs and reduce employment.
Michael Saltsman of the pro-business Employment Policies Institute said, “The fight for $15 is colliding with economic reality in Seattle and San Francisco, with credible reports from top-notch economists demonstrating that wage hikes do indeed cost jobs . . . in short, there are no economic rationales for pursuing an extreme wage hike — only ideological ones.”
FULL STORY
