July 30, 2016
Max Ehrenfreund had an interesting piece reporting on a new analysis of the first round of wage increases from Seattle’s $15 an hour minimum wage law. The higher wage is being phased in between 2015 and 2020. The study found modest average wage gains of 73 cents an hour for low wage workers. The effect was limited in part because the strong economy helped to boost wages, so the minimum wage had less effect than otherwise might have been expected.
But the piece also notes the finding that average work time fell by roughly 15 minutes per week and employment by 1.2 percent. It is important to recognize that this drop in employment does not mean that 1.2 percent low wage workers will have jobs over the course of the year.
These are high turnover jobs. The 1.2 percent drop in employment means that at a point in time, 1.2 percent fewer workers will be employed. What this means for low-wage workers in Seattle is that they can expect to spend more time looking for a new job when they lose or quit their prior job. If they get roughly 7.0 percent more for the hours that they work, but they put in 1–2 percent fewer hours over the course of the year, then they will likely consider themselves better off.
In other words, the finding of some reduction in employment is not necessarily a bad thing. It doesn’t mean that 1.2 percent of Seattle low-wage workforce has been condemned to go the whole year without a job.
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