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

[TheDeadFlagBlues]

I see a lot of discussion regarding the politics of this study and little discussion of the study itself - which is clearly flawed for reasons pointed out by Arindrajit Dube in an Upshot article. Is it possible for a "synthetic control" to be constructed when Seattle is experiencing unprecedented economic growth such that quarterly earnings per worker have increased by 20% since 2014? There's no such synthetic control in existence nor could one be constructed. The fact that when one looks at increases in employment for positions that pay up to 40 dollars an hour, there was substantial/sustained increases in all categories suggest that this study is flawed.

It's not as if economists have not studied this subject before. There are so many studies conducted on the minimum wage that a well-done meta-analysis would contain dozens of such studies. These can easily be found online - none show anywhere close to what this Seattle study shows in terms of the relationship between job loss and unemployment. "Occam's razor" suggests that the astonishing finding stems from the fact that many service employees are being paid more than the cutoff shown by the authors - this strikes me as being credible and is aligned with anecdotal experience from Seattle and the Silicon Valley.

Opponents of the movement to use the minimum wage as a social policy tool to combat poverty can rely on this study if they like - it's the only one they possess. There have been dozens of similar studies and there's a mountain of evidence from the past that suggests that the trade-offs make increasing the minimum wage worthwhile if other measures aren't feasible. More studies will be conducted in the future and in locations that aren't as unrepresentative of the country - meaning that even "synthetic control" methods are rendered useless - as Seattle. If you want to learn from a policy experiment, Seattle is your worst bet...

edit: obviously, economics is important because we like to compare "like cases to like cases" to see the effect of some action such that we can evaluate the value/merit of that action. That said, if one wants to see Seattle as some sort of horror story or if one wants to promote it as a boogeyman, one must realize that Seattle's economy is booming, that people throughout the Northwest, the US and the country are flocking there. This UW study isn't going to persuade anyone outside of the hard right against the merits of increasing the minimum wage...