Report: Minimum Wage Hike in Seattle Causing Job Losses,
Lower Paychecks
By Alice Greene
In June 2014, Seattle became the first city in the nation
to increase its minimum wage to $15 per hour.
The increase, pushed for by the "Fight for 15"
movement, is designed to be implemented in phases over the course of seven
years (to be completed by 2021).
Seattle's minimum wage is currently at $13, and
we’re already seeing the negative effects.
According to a University of
Washington report, low-level workers are taking home less money than they were
before the wage hike.
Employers have dealt with the 3% increase in minimum wage
by reducing the number of employees and cutting the hours of those still
employed.
On average, minimum wage workers are now making $125 less per month
than they were before the increase. Meanwhile, Seattle has lost a whopping
5,000 jobs.
“This is a two-edged sword,” explains Jacob Vigdor, a
researcher currently studying the effects of the wage hike. “If you raise this
minimum wage the way Seattle did you run the risk of actually taking money away
from the people you are trying to help.”
Seattle saw an abrupt increase in the number of
workers making over $19 an hour following the hike; this is because
some businesses responded to the increase by hiring more skilled workers
in hopes they could generate more revenue.
This is bad news for less experienced workers trying to
find a job.
“Basically, what we’re doing is we’re removing the bottom
run of the ladder,” says Vigdor.
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We’re seeing similar effects in New York, which lost
1,000 restaurants last year following an increase in minimum wage.
Restaurants in the Big Apple are forced to pay employees
$12 an hour, which is $1 more than other minimum wage employers.
Employment growth at fast-food restaurants in New York
City shrank to just 3.4% in 2016, compared to 7% from 2010-2015. The number of
jobs available for servers, cooks, and dishwashers grew by a measly 1.4% in
2016, compared to a 4.4% annual growth between 2010 to 2015.
Jillian Henze, a member of the Seattle Restaurant
Alliance, says the “business model is evolving” thanks to the wage increase.
“Some of our members are reducing the number of employees or hours,” said
Henze. Others are adding fees and service charges to checks to make up for the
increased labor cost.
Seattle Mayor Ed Murray, who supports the Fight for 15
movement, denies the hike is a problem and insists that “Seattle’s economy is
booming, with wages increasing and restaurants and retail among our fastest
growing job sectors.”
When you look at the data, you see that job growth
is strong only for those making more than $19 per hour.
Editor's
note: The
whole notion that every job has to provide a "living wage" is wrong
headed and dangerous. From a practial standpoint, one doesn't support a family
of four working at entry level at McDonald's, there is not enough value there.
However, these jobs can be very useful for teens and college students and
provide entry level responsibility. We are about to take that opportunity away
from them. Remember the real minimum wage is $0.
From a philosophical point of view, individuals and
families should be allowed and required to take care of themselves.
A minimum
wage designed to take entry level jobs and make them into career positions
interferes with businesses, but also signals a false "entitlement"
message, that if you bother to show up at work, then you are automatically
entitled to more than you produce.
This disconnect between value provided and
wage returned is a very socialist idea. And you know how we feel about
socialism.
