The city of Seattle is in the news because of a recent hike in its minimum wage to fifteen dollars an hour, and because of a study by the University of Washington which concludes that it has hurt the very workers it was intended to help. The numbers appear to show that the increase has led both to the laying off of low skilled employees, and the cutting of hours for lower skilled employees . In their place higher skilled workers have been hired for slightly more than the minimum wage, because they offer greater productivity for the dollar.
The higher the increase, the more potential there naturally is for adverse effects. Now lower minimum wage increases have been studied in the past, and as many readers of this blog will know, I have always had a problem with the premise of these types of studies. The idea that job loss from any kind of minimum wage increase should manifest itself as an immediate symphony of firings is baseless. What you do when you raise the minimum wage is introduce an additional burden or cost that the business must bear from that point on. The problem does not necessarily arise the moment the hike occurs, the problem arises at some later date when the business inevitably encounters financial challenges due to other factors, and the higher wage costs lead things to the breaking point. This will necessarily be at different times for different businesses.
The exact effects of a minimum wage increase are naturally ellusive, and therefore Progressives convince themselves that they can wish away the basic laws of economics: that to increase the cost of a thing is to decrease the demand for it. But we all understand (both Liberals and Conservatives alike) that there is a height to which the minimum wage can be raised that will in fact result in that immediate symphony of job losses. The question is, has this University study in question shown that this has been reached in Seattle at 15 dollars an hour?
Nice read found HERE