Instead of alleviating poverty, Seattle’s minimum wage experiment is creating a system of winners and losers. A new study from economists with the University of Washington show that Seattle’s recent minimum wage mandate is marginalizing workers still looking to establish themselves in the Emerald City, while more experienced workers have seen modest income increases.
The economists also found that, in addition to slashing hours for the already employed, Seattle’s citywide minimum wage policy is creating “a significant reduction in the rate of new entries into the workforce.” – especially when compared to the rest of the state. The researchers arrived at these conclusions after receiving access to workforce data gathered by Washington state’s Employment Security Department.
Unfortunately, decision makers may have let grandiose visions – and not Seattle’s best interest – inspire the choice for a $15 wage hike. One council member remarked that “$15 in Seattle is just a beginning. We have an entire world to win.” Falling far short of a global, or “national game changer,” some workers have seen their “historic” wage increase essentially wiped out by lost hours.
This new analysis only adds to the growing mountain of empirical evidence that minimum wage mandates – regardless of geographic limitation – often hurt more than help. Researchers from American and Cornell Universities found that 28 state and federal minimum wage increases between 2003 and 2007 failed to reduce poverty.
While this study only had access to information from April 2016 to January 2017, decades of data shows that wage hikes limit opportunity. Policymakers should consult the experts before pushing for more policies that isolate the economically vulnerable.