New Study in Seattle Reveals that work Hours fell after Minimum Wage Increases
In June of this year, researchers at the University of Washington released a study about raising the minimum wage, which could be helpful for Los Angeles in particular. The minimum wage in Los Angeles just went up last month from $10.50 an hour to $12 an hour, but the study might make Los Angeles rethink its plans about going up to $15 an hour. The new study found that jobs and work hours fell for Seattle’s lowest paid employees after the city raised the minimum wage to $13 an hour last year on its goal to reach $15 an hour for all workers by 2021. The analysis showed that jobs and hours for those workers declined faster in Seattle than in surrounding control areas, where the minimum wage did not increase. David Autor of MIT, a leading labor economist in the country, reviewed the paper before it was published and stated,
This is a study that has the power to move people’s beliefs. It will have a substantial impact on the debate. It suggests we should be proceeding cautiously when we start pushing minimum wages into ranges where they are pretty significant.
Economists didn’t start seeing sign of trouble with the wage increase in Seattle until the rate went up to $13 an hour in January 2016. The study found that low-wage workers in Seattle, those earning less than $19 an hour, saw their hours decrease by about 9 percent from 2014 to 2016, compared with the surrounding control area. The number of low-wage jobs overall declined by nearly 7 percent relative to the control group, according the study. The researchers conducted two surveys of 500 businesses, which seem to suggest that restaurants are moving toward a model of either limited service or lavish, full-service, restaurants that charge more for food. It is unclear how a $15 minimum wage would work out in Los Angeles or California for that matter, but economists believe that there are lessons to be learned from Seattle’s minimum wage increases.