Wapo: New Study on seattle minimum wage is bad news for liberals

[Matty]

https://www.washingtonpost.com/news/wonk/wp/2017/06/26/new-study-casts-doubt-on-whether-a-15-minimum-wage-really-helps-workers/?utm_term=.46e91741ffcb

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[Mr. Reactionary]

Muh demand creates jobs.

[Person Man]

Didn't  this study basically a "control" out of its ass?

[Crumpets]

Then again, our unemployment rate is 2.9% so... ¯\_(ツ)_/¯

[Ebsy]

Actually, the study found something that should interest liberals greatly. Though, it hasn't even been peer reviewed yet.



So the study concludes that the rise in the minimum wage ended up creating more higher wage jobs.

[BudgieForce]

Why is "very credible" in quotes?

[Matty]

Ummm, that is NOT what the study concluded.

First off, why would the government mandating wages be 13/hour cause an employer to increase it even more?

Here is the 538 blog succinctly putting it.

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[KingSweden]

Actually, the study found something that should interest liberals greatly. Though, it hasn't even been peer reviewed yet.



So the study concludes that the rise in the minimum wage ended up creating more higher wage jobs.

This is good news objectively, but does little to help low-skilled workers $15 minimums are supposed to help. (I'm agnostic on the matter personally. Think it's a wash either way)

[publicunofficial]

lol

[publicunofficial]

Here's a breakdown of Seattle's unemployed population:



Those demographics don't fit the narrative of young inexperienced workers being unable to find work because of the minimum wage requirements.

[RI]

Didn't  this study basically a "control" out of its ass?

That's how synthetic controls work. It's a pretty common and recognized method for studying discrete policy changes. The methodology is pretty solid.

[Person Man]

Didn't  this study basically a "control" out of its ass?

That's how synthetic controls work. It's a pretty common and recognized method for studying discrete policy changes. The methodology is pretty solid.

But is there a Seattle in Seattle? They couldn't have done San Fransico?

Anyways, it would be interesting to see how this automates low wage industries and how that effects employment in technology and how it effects undercapitalized entrapanuers. Would productivity go up if undercapitalized business owners became employees that had similar compensation?

[7,052,770]

The federal government should subsidize the minimum wage increase to $12 - $15 so it doesn't hurt small businesses or cut jobs.

Solved.

[RI]

The federal government should subsidize the minimum wage increase to $12 - $15 so it doesn't hurt small businesses or cut jobs like this.

Solved

Or we could just scrap the minimum wage and implement an NIT. It would be far more efficient and solve the same problem.

[Person Man]

The federal government should subsidize the minimum wage increase to $12 - $15 so it doesn't hurt small businesses or cut jobs like this.

Solved

Or we could just scrap the minimum wage and implement an NIT. It would be far more efficient and solve the same problem.

NIT?

[RI]

The federal government should subsidize the minimum wage increase to $12 - $15 so it doesn't hurt small businesses or cut jobs like this.

Solved

Or we could just scrap the minimum wage and implement an NIT. It would be far more efficient and solve the same problem.

NIT?

https://en.wikipedia.org/wiki/Negative_income_tax

[Person Man]

The federal government should subsidize the minimum wage increase to $12 - $15 so it doesn't hurt small businesses or cut jobs like this.

Solved

Or we could just scrap the minimum wage and implement an NIT. It would be far more efficient and solve the same problem.

NIT?

https://en.wikipedia.org/wiki/Negative_income_tax

Isn't that just welfare?

[Hollywood]

It is my opinion that the King County Minimum Wage Ordinance was completely irrelevant for almost the entire population of Seattle, Washington and surrounding areas within King County, Washington.    

First, the vast majority of employers would not have had to cut jobs, because employees already receive salaries that exceed the minimum wage/compensation guidelines in the new ordinance. When you take a look at the average salaries provided to employees in each industry, and even the employees earning salaries in the 25th percentile of employees in a particular job, you'll notice that all jobs/positions paid above minimum wages in 2013. Thus, an increase in minimum wage would not have any effect on the vast majority of people.  

Second, employers could count tips in calculating salaries, so small business (<500), where tips to employees are prevalent (restaurants), would not have had to increase salaries if Employees could make $13 an hour with tips.  As of 2017, a small business employer in Seattle is only obligated to a minimum wage of $11.00, but must pay a total compensation of $13.00 to employees.  Eventually all employers will have to pay $15.00 an hour, but the interesting part of the analysis is when salaries increase based on the consumer-price index (CPI) for Seattle area.  

Third, unemployment has decreased throughout the United States.  Both the United States and the Seattle area saw .08% decrease in unemployment from April 2016 to April 2017.  

We need to see what happens in a several years from now when all businesses are paying >$15 per hour.  

[KingSweden]

The impression that I get from this report is that Seattle has been gentrifying so rapidly that its minimum wage law probably has not mattered much at all. It's a place that his increasingly limited room for minimum wage work and the people who do those job.

These findings would not be especially generalizable even if this were showing an obvious and smashing success for the minimum wage increase. Which success, arguably, this does show - i.e. high-wage jobs displaced low-wage jobs, albeit mostly for totally different reasons.

What we should be interested in asking, because it's less is obvious is how would a minimum wage increase affect a place that lacks a growing economy, that lacks high-end services, or that lacks a highly educated workforce? How would it affect a place on that is on the periphery of the national economy?

(Either way, reducing both employee- and employer-side payroll taxes on low-wage employment would be a better way to put more money in the pockets of the working power without making it more expensive to employ them.)

Yes!

[Alaska2392]

Also, can't two different study methodologies (both reasonable in their own right) just produce different results?  Below the author of the Berkley study critiques the UW methodology.  Though I'm sure both could agree to disagree.

http://irle.berkeley.edu/files/2017/Reich-letter-to-Robert-Feldstein.pdf

I think I once remember reading a quote that was something like "You can get an economist to find any conclusion you like".  I'm sure there are so many conservative groups out there that could sponsor a study that shows Seattle is doomed.  

University academic studies produce conflicting results all the time.  It's kind of hard to make clear cut determinations of which one is "right" and which is "wrong".

[JA]

The impression that I get from this report is that Seattle has been gentrifying so rapidly that its minimum wage law probably has not mattered much at all. It's a place that his increasingly limited room for minimum wage work and the people who do those job.

These findings would not be especially generalizable even if this were showing an obvious and smashing success for the minimum wage increase. Which success, arguably, this does show - i.e. high-wage jobs displaced low-wage jobs, albeit mostly for totally different reasons.

What we should be interested in asking, because it's less is obvious is how would a minimum wage increase affect a place that lacks a growing economy, that lacks high-end services, or that lacks a highly educated workforce? How would it affect a place on that is on the periphery of the national economy?

(Either way, reducing both employee- and employer-side payroll taxes on low-wage employment would be a better way to put more money in the pockets of the working power without making it more expensive to employ them.)

Yes!

[Shadows]

Actually, the study found something that should interest liberals greatly. Though, it hasn't even been peer reviewed yet.



So the study concludes that the rise in the minimum wage ended up creating more higher wage jobs.

This is good news objectively, but does little to help low-skilled workers $15 minimums are supposed to help. (I'm agnostic on the matter personally. Think it's a wash either way)

It is not peer reviewed & I don't why it should even be discussed. Forget the good aspects,non-peer reviewed studies are largely considered junk in the academic world! This isn't credible by any standards !

Edit - Also unsurprisingly WaPo posts this. Jeff Bezos who owns Amazon has a huge share of minimum wage workers in warehouses & what not. What a clear conflict of interest in pushing through a non-peer reviewed study as a "Very Credible new" study !

[136or142]

Also, can't two different study methodologies (both reasonable in their own right) just produce different results?  Below the author of the Berkley study critiques the UW methodology.  Though I'm sure both could agree to disagree.

http://irle.berkeley.edu/files/2017/Reich-letter-to-Robert-Feldstein.pdf

I think I once remember reading a quote that was something like "You can get an economist to find any conclusion you like".  I'm sure there are so many conservative groups out there that could sponsor a study that shows Seattle is doomed.  

University academic studies produce conflicting results all the time.  It's kind of hard to make clear cut determinations of which one is "right" and which is "wrong".

I don't know the details of either of these studies, but in general in economics a great deal of the equations depend on the assumptions behind the numbers.  I've linked here before to the CBC Radio program Ideas' It's the Economists, Stupid which discussed this with left leaning Australian economist Richard Denniss and he said something like "Many times when an economist - especially one with an ideological agenda - tells you that his the numbers in the equations are 'best guesses' what they really mean is 'we made the numbers up.'"

Edit:  CBC usually takes episodes of their radio programs down after awhile, so I assumed it was no longer available, but here it is: http://www.cbc.ca/radio/ideas/it-s-the-economists-stupid-1.3219471

It says the episode first aired in September of 2015 and I heard it sometimes in early 2016, so this was, at least, the third airing of this program.

[Lachi]

Coming from a country that has a minimum wage of 13.83 USD, I find it laughable that the US is still having an argument over whether a high min wage is a good thing...
(Hint, it is.)

[RI]

Christ, there's a lot of ignorance of academic economics is this thread.

It is not peer reviewed & I don't why it should even be discussed. Forget the good aspects,non-peer reviewed studies are largely considered junk in the academic world!

This is so incredibly wrong it makes my head hurt. Working papers (especially NBER working papers, which this was) are the most commonly discussed and covered type of economic paper, mostly due to the fact that they tend to be very high quality and publishing in economics takes forever. From the time a paper is done being written to publication can take years in economics; journals take forever even on the most basic desk rejection. Econ working papers are often better than the published versions of the same paper and receive more citations. Further, econ isn't the only field where working papers are the lingua franca; math and many of the hard sciences use extensive commenting on working papers through arXiv and the like.

Also, can't two different study methodologies (both reasonable in their own right) just produce different results?  Below the author of the Berkley study critiques the UW methodology.  Though I'm sure both could agree to disagree.

http://irle.berkeley.edu/files/2017/Reich-letter-to-Robert-Feldstein.pdf

I think I once remember reading a quote that was something like "You can get an economist to find any conclusion you like".  I'm sure there are so many conservative groups out there that could sponsor a study that shows Seattle is doomed.  

University academic studies produce conflicting results all the time.  It's kind of hard to make clear cut determinations of which one is "right" and which is "wrong".

The UW paper is clearly superior to the Berkeley paper given that UW replicated Berkeley's results and then showed why they painted an incomplete picture of the situation. UW simply had better data than Berkeley; their methodologies were barely any different! Berkeley's hemming and hawing is the academic equivalent of being a sore loser.