Seattle Times: UW Minimum-Wage Study Doesn’t Reflect Reality of Work in Seattle

When you see blaring headlines announcing something way out of the bounds of the normal, your alarm bells should be ringing. In this era of fake news, social-media bubbles and data manipulation, it pays to have a critical eye—to be suspicious of sweeping claims, to analyze the underlying assumptions behind any piece of research, and to check the data carefully.

Last week, a University of Washington study team released a working paper on Seattle’s increased minimum wage. This working paper has inspired eye-popping headlines. Not surprisingly, outlets that have traditionally agitated against minimum-wage increases—like the American Enterprise Institute, the National Review and Forbes—all made sure to trumpet the paper’s claim that there was a loss of jobs for workers who earn less than $19 per hour. Some have pointed to Seattle’s alleged “failure” as a cautionary tale for the many cities and states across the country that are raising their minimum wages.

How can these findings be squared with the reality of Seattle’s economy? At 2.5 percent unemployment, Seattle is very near full employment. A Seattle Times story from earlier this month reported a restaurant owner’s Facebook confession that due to the tight labor market “I’d give my right pinkie up for an awesome dishwasher.” Earlier this year, Jimmy John’s advertised for delivery drivers at $20 per hour.

Conservative sources are focused on writing alarming headlines, not reflecting the reality of Seattle’s labor market or the many caveats in the study. Those caveats are politically inconvenient for minimum-wage opponents, but they’re vitally important to people who live and work in Seattle, so let’s take a look at them now.

Specifically, let’s look at all the workers who are simply left out of the analysis. By the UW team’s own admission, nearly 40 percent of the city’s low-wage workforce is excluded from the data: workers at multisite employers like Nordstrom, Starbucks, or even restaurants with a few locations like Dick’s. Even worse, any time a worker left a job with a single-site employer for one with a chain, that was treated as a “lost job” that was blamed on the minimum wage—and that likely happened a lot since the minimum wage was higher for those large employers.

Similarly, every time an employer raised its pay above $19 per hour—like Jimmy John’s did—it was counted not as a better job, but as a low-wage job lost as a result of the minimum wage.

The truth is, low-wage workers are making real gains in Seattle’s labor market. In almost all categories of traditionally low-wage work, there are more employers in the market than at any time in the city’s history. There are more coffee shops, restaurants and hotels in Seattle than ever before. The work is getting done. And the largest (and best-paid) workforce in the history of the city is doing it.

Nor can the study be reconciled with the wide body of rigorous research—including a recent study of Seattle’s restaurant industry by University of California economist Michael Reich, one of the country’s foremost minimum-wage researchers—that finds that minimum-wage-increases studies have not led to any appreciable job losses.

I look forward to the next phase of this process, when we move past the blare of the headlines and get to work understanding why the study team drew their sweeping conclusions based on such seemingly flimsy data. The UW team’s working paper has yet to be peer-reviewed, and in that process the findings will likely be modified and the headline-grabbing claims will likely be toned down. In the meantime, we are likely to see more evidence from more places about what the real impact that the new higher minimum wages are having.

But regardless of what the headlines say, Seattle is enjoying unprecedented growth and prosperity. The consensus that Seattle and its workers, as well as other cities and states representing 18 percent of the U.S. workforce, have reached is that a $15 an hour minimum wage is necessary to ensure that everyone can participate in a vibrant economy.

Rebecca Smith lives in Seattle and is deputy director of the National Employment Law Project. 

This op-ed was originally published in the Seattle Times.

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Rebecca Smith

Director of Work Structures, National Employment Law Project

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