WASHINGTON, DC - DECEMBER 12: U.S. President Donald Trump departs on the South Lawn of the White House, on December 12, 2020 in Washington, DC. Trump is traveling to the Army versus Navy Football Game at the United States Military Academy in West Point, NY. (Photo by Al Drago/Getty Images) AUCKLAND, NEW ZEALAND - JANUARY 12: Alexis Olympia, daughter of Serena Williams and husband Alexis Ohanian congratulate Serena Williams after she won her final match against Jessica Pegula of USA at ASB Tennis Centre on January 12, 2020 in Auckland, New Zealand. (Photo by Hannah Peters/Getty Images) U.S. President Joe Biden addresses a joint session of congress as Vice President Kamala Harris (L) and Speaker of the House U.S. Rep. Nancy Pelosi (D-CA) (R) look on in the House chamber of the U.S. Capitol April 28, 2021 in Washington, DC. A pedestrian walks by a now hiring sign at Ross Dress For Less store on April 02, 2021 in San Rafael, California. According to a report by the Bureau of Labor Statistics, the U.S. economy added 916,000 jobs in March and the unemployment rate dropped to 6 percent. Leisure and hospitality jobs led the way with 280,000 new jobs followed by restaurants with 176,000 jobs and construction with 110,000 new positions. (Photo by Justin Sullivan/Getty Images) Biden on disappointing jobs report: More help is on the way Used cars sit on the sales lot at Frank Bent's Wholesale Motors on March 15, 2021 in El Cerrito, California. Used car prices have surged 17 percent during the pandemic and economists are monitoring the market as a possible indicator of future increased inflation in the economy overall. (Photo by Justin Sullivan/Getty Images) A house's real estate for sale sign is seen in front of a home in Arlington, Virginia, November 19, 2020. - The US real estate market is booming even as the coronavirus crisis intensifies, and the seemingly insatiable appetite for new and older homes has sent prices soaring -- meaning more and more families with modest incomes are seeing their dreams of owning property shattered. (Photo by Saul Loeb/AFP/Getty Images) Employees pull pallet trucks at the Amazon.com Inc. fulfillment center in Robbinsville, New Jersey, U.S., on Monday, Nov. 27, 2017. The holiday shopping season is off to a strong start and retailers appear to be continuing the momentum today -- Cyber Monday -- the biggest online spending day of the year. Photographer: Victor J. Blue/Bloomberg via Getty Images (CNN Business) — As states and cities have forged ahead in raising their minimum wages, early evaluations have found fears of widespread job loss to be mostly unfounded. It’s been less clear, however, which workers have benefited more than others. A new study out of Seattle, one of the earliest jurisdictions to adopt a path toward $15 an hour, offers a look under the surface. The economic ripple effects of the wave of minimum wage increases are hard to measure precisely, making the Seattle experience an important test case. Congress hasn’t raised the federal minimum wage since 2009. Instead, local politicians and voters have led the way in the past few years. Ten large cities and seven states have passed minimum wages to between $12 and $15 through August. Seattle has served as a national guinea pig for the policy since 2014, when its voted to gradually raise its minimum wage from $9.47 to $15.45 for large employers this year and $16 in 2019. The latest research, released Monday, shows that workers made more money despite getting fewer hours — but that experienced workers made out the best. The study, conducted by economists at the University of Washington using state unemployment insurance data, found that the increase added about $10 per week on average to the earnings of low-income workers through 2016, even while reducing weekly hours slightly. But more experienced workers made $19 more per week, the research found, partly by making up for lost hours in Seattle at second jobs worked outside city limits. In addition, employee turnover decreased, which the authors believe suggests that employers tried harder to retain their most productive staff members as wages went up. That’s a plus for existing workers, but potentially an obstacle for inexperienced or new workers trying to get that first line on their resume. Indeed, the study showed that fewer new workers entered Seattle’s low-wage labor market compared to the rest of Washington. “Seattle’s minimum wage ordinance appears to have delivered higher pay to experienced workers at the cost of reduced opportunity for the inexperienced,” the study’s authors wrote. The authors noted that younger workers priced out of fast-food or other low-wage industry jobs by the higher minimum wage are in the best position to get the training they would need to find better jobs. At the same time, higher minimum wages help make cashier, dishwasher or janitorial work into viable long-term employment for those who can’t move up the career ladder. Critics say studies overstated loss of new workers The new findings update an initial study released last year by the same team of University of Washington researchers that found a net decrease in the earnings of low-wage employees in Seattle, drawing fire from some economists over methodology. A critique published Monday by the left-leaning Economic Policy Institute says problems with the first study haven’t been fixed, and thus the new study overstates the reduction in new entrants to Seattle’s labor market. Since it defines “new entrant” as someone making less than $15 an hour, the study would count someone who got hired at $16 or $17 an hour as a lost job instead of a better one. In response, the University of Washington team says that even counting new workers making up to $19 an hour, Seattle still saw a decrease in its rate of new entrants compared to the rest of the state. A different study released last month by the Institute for Research on Labor and Employment at the University of California at Berkeley showed no employment loss in six cities that had raised wages above $10 by 2016 — Seattle, San Francisco, Chicago, Washington D.C., Oakland and San Jose. Rather, that study found that average weekly earnings for workers in the food service industry went up between 1.3% and 2.5% for every 10% increase in the minimum wage. “Recent studies of restaurant workers have arrived at a consensus: They find little to no detectable negative effects of minimum wages on restaurant employment,” the authors wrote. States lead the way, and Congress may follow The findings come as the political calculus around the minimum wage has been shifting, with inequality on the rise and ballooning housing costs eating up more and more of the average worker’s paycheck. Amazon’s plan to increase its minimum wage to $15 on November 1 has added corporate heft to efforts to raise pay nationally. If Democrats regain control of the House, they will prioritize a bill to raise the minimum wage to $15 by 2024, and then index it to inflation, according to a spokeswoman for the minority staff of the House Education and Workforce Committee. Democrats believe some Republicans might get on board, giving it a shot at passing the Senate even if Democrats don’t control the chamber. Meanwhile, state and local efforts continue. This year, ballot initiative efforts have failed in North Dakota and Michigan. But a $15 minimum wage bill was signed into law by Massachusetts Governor Charlie Baker, a Republican, and labor unions have won increases of up to $19 for workers at ports and airports. Voters in Arkansas and Missouri will decide on more modest increases on Election Day. Although raising local minimum wages has so far appeared to deliver benefits for workers, researchers caution that all recent studies have taken place in the midst of an economic expansion, and in particularly hot urban areas. Bringing a small town in New Mexico up to the same level, for example, might not yield similarly positive results. And even some supporters of Seattle’s minimum wage ordinance worry about the future.<doc-sep>A team that includes economists from the University of Washington found minimum wage increases were either beneficial or had no significant impact on many workers in Seattle. The same research team that found Seattle's $15-an-hour minimum wage law negatively impacted low-wage workers says their latest findings "contrast" with some of their earlier work. The team that includes economists from the University of Washington found minimum wage increases were either beneficial or had no significant impact on many workers. That contradicts their previous study, which found that while the law boosted pay for low-wage jobs, it also led to employers cutting hours for some. In their first report, an average low-wage worker in Seattle was seeing a loss of about $125 per month because their hours were being cut. Not necessarily, the same group says in the latest report. "Our analysis of over 14,000 workers employed at wages under $11/hour in early 2015, as well as some 25,000 employed at wages under $13/hour at the conclusion of 2015, documents the expected and intended impacts of Seattle's minimum wage ordinance on hourly wages," the report reads. "Evidence indicates that these workers experience no significant decline in their likelihood of being employed and a modest reduction in their hours worked ... following the first and second wage increases." Workers employed at least nine months ahead of the law going into effect benefited the most, according to the report. Those who didn't work as much leading up to the minimum-wage law going into effect saw a decrease in hours worked, but that was offset by their gain in wages, "leaving no significant change in earnings." Additionally, 'both less and more experienced workers were more likely to remain employed by their baseline Seattle employer, implying an 8% reduction in labor turnover rates." The report notes that there was a decline in the number of entry-level jobs available and employers responded to higher minimum wages by shifting their workforce to include more experienced workers.<doc-sep>Even so, how can this year’s study be squared with last year’s study? Mr. Vigdor said the two studies were broadly consistent when considering the effect both on workers employed at the time of the increases and workers who might soon seek employment. The minimum-wage increases helped people who were already working low-wage jobs, hurt people who weren’t yet working, and had a somewhat negative effect on pay over all. (Mr. Vigdor and his colleagues have revised the earlier paper so that the large negative effect they initially found after the second minimum-wage increase was smaller: an average loss of $74 a month instead of $125.) Other researchers were more skeptical. When last year’s study came out, Ben Zipperer, an expert on the minimum wage at the liberal Economic Policy Institute, pointed out that it failed to adequately account for the fact that Seattle’s economy was growing rapidly when the minimum wage increases took effect. In a booming economy, Mr. Zipperer argued, we would expect to see fewer workers employed at low wages — not because employers decide it’s not worth hiring people, but because the competition for workers bids up wages, and many low-paying jobs disappear and are replaced by somewhat higher-paying jobs. Alternatively, many potential low-wage workers may decide it’s too expensive to live and work in Seattle even with the benefit of a higher minimum wage, leading them to leave the city or not migrate there in the first place. In either case, it would be the boom, and not a minimum-wage increase, that was reducing the number of hours worked at low wages. In an interview, Mr. Zipperer said he was unconvinced by the authors’ attempt to square this year’s findings with last year’s. He said that the relatively low number of people making less than $15 an hour in Seattle, the linchpin of the effort to reconcile the results, is consistent with the city’s booming labor market, which the authors still haven’t properly addressed.<doc-sep>
This image was removed due to legal reasons. Last year, researchers at the University of Washington released an alarming study purporting to show that a minimum wage increase in Seattle was harming the workers it intended to help. The paper reported that average pay for Seattle workers fell by $125 a month after two increases to the minimum wage. This was a controversial finding, bolstering conservatives like Ted Cruz who are against increasing the minimum wage. But now, the same researchers have published a new study showing exactly the opposite result, according to the New York Times. “We’re prepared to have a lot of people come out and say we’re contradicting ourselves,” Jacob Vigdor, a University of Washington economist and an author of the study told the Times. “That we’re flip-flopping.” What the new study found is essentially that the effects of raising the minimum wage are complex and need to be studied with nuance. It turns out that Seattle’s minimum wage increase—to $11 an hour from $9.47 an hour in 2015, and up again to $13 an hour in 2016—had different effects on different types of workers. Who would have thought. The researchers learned that low-wage employees who worked the most in the nine months leading up to the wage increase saw the biggest benefits. The Times writes that those workers “saw a significant increase in their wages and only a small percentage decrease in their hours, leading to a healthy bump in overall pay—an average of $84 a month for the nine months that followed the 2016 minimum-wage increase.” Workers who worked less in those preceding months were relatively unaffected by the minimum wage increase, making about $4 more a month on average. Finally, workers who were considered possible “new entrants” into the workforce fared worse. “For folks trying to get a job with no prior experience, it might have been worth hiring and training them when the going rate for them was $10 an hour,” Vigdor told the Times. This is all to say that though raising wages has complicated effects, they’re still not as dire, at least in Seattle, as Vigdor and his colleagues reported last year. So what happened? Economist and expert on minimum wages Ben Zipperer believes the original study was flawed. From the Times: In a booming economy, Mr. Zipperer argued, we would expect to see fewer workers employed at low wages—not because employers decide it’s not worth hiring people, but because the competition for workers bids up wages, and many low-paying jobs disappear and are replaced by somewhat higher-paying jobs. Alternatively, many potential low-wage workers may decide it’s too expensive to live and work in Seattle even with the benefit of a higher minimum wage, leading them to leave the city or not migrate there in the first place. In either case, it would be the boom, and not a minimum-wage increase, that was reducing the number of hours worked at low wages. “At the end of the day, it really to me points to the hazards of a single case study,” Zipperer told the Times. “If something contaminates the case study, like a shock to Seattle, you’re out of luck. There’s no counterbalance you can use.” In a blog for the Economic Policy Institute on Monday, Zipperer said that he thinks even the new study has flaws: By comparing workers in Seattle with workers elsewhere in Washington state, the study incorrectly assumes that the low-wage labor market in Seattle would have grown like other areas in Washington, were it not for the city’s 2015-2016 minimum wage increases. This comparison is unreasonable because, as other researchers have demonstrated (Dube 2017, Rothstein and Schanzenbach 2017, Zipperer and Schmitt 2017), Seattle experienced much faster wage gains for reasons that had nothing to do with the minimum wage. Indeed, the authors of the new study find that Seattle had faster wage growth and diverged from other regions prior to the city’s minimum wage increases. Vigdor said that one possible takeaway from the new study is that minimum wage increases may only help certain groups of people. In this case, that would be families working for years in low-paying jobs. At the same time, it could hurt workers like college students trying to find short-term, part-time jobs while they’re in school. “Whatever you think about that trade-off depends on your values,” Vigdor told the Times. “We want to illuminate those trade-offs, make them as clear as possible.