Seattle's $15 Minimum Wage is Hurting the Workers It's Intending to Help
A new study reminds us that the law of supply and demand still applies to labor
Three years ago, the city of Seattle voted to gradually raise its minimum wage to $15 an hour in the name of human decency and basic fairness. Several cities, including New York and Los Angeles, have done the same thing. Critics argue that boosting wages by bureaucratic diktat leads to fewer hours and jobs for low-income and low-skilled workers.
Now what The Washington Post calls a "very credible" study from researchers at the University of Washington finds that the critics are right. The Post calls this bad news for liberals. But the real victims are low-skilled workers.
The study finds that when wages were increased to $13, employers cut hours by 9 percent. That means that low-skilled workers saw their monthly compensation decrease by an average of $125.
Studies that downplay the effects of minimum wage hikes have mostly focused on teenagers and fast food workers. But the study at the University of Washington paper looks at the impact on workers spanning all ages and all demographics.
The findings may surprise progressives who believe that the only limit to higher pay for workers is the greed and selfishness of business owners. But it doesn't come as a surprise to those who remain unconvinced that the law of supply and demand can be amended by city councils. Labor is simply another cost for any business, and when the price of something goes up, we tend to buy less of it.
Another takeaway from the study is that if you want to raise the income of low-skilled workers, taxpayers should pay for that burden through direct cash payments or other forms of welfare. Offloading the cost to employers has unintended consequences, even though it's a lot easier to demonize business owners for being greedy cheapskates than to build a consensus around raising taxes.
The lesson from Seattle that all cities should pay attention to is that forcing business to pay more hurts the very people minimum wage hikes are supposed to help. That such ordinances are usually passed in the name of low-income, low-skilled workers only makes that reality all the worse.
Edited by Todd Krainin. Written by Nick Gillespie. Cameras by Jim Epstein and Kevin Alexander. Still photos by SEIU Local 99 on a Creative Commons license. Seattle video by Max Seigal on a Creative Commons license.
