538: Seattle $15 Minimum Wage May Have Gone Too Far

[Stretch]

Why do you feel the need to copy and paste the entire article? All you need is the website address, makes it a whole lot easier and doesn't take up all the unnecessary space the next guy has to scroll thru

Soooooooo........if you click a link to read it at the source..........you still have to scroll.

If you don't like reading any particular poster's posts, just put them on 'ignore.'

[Micawber]

I've always said that whatever the minimum wage is, is irrelevant. If it's too high eventually the free market will find ways to correct it, e.g., inflation.
Adam Smith's Invisible Hand at work.

So you don't oppose the regulation.

There ain't no invisible hand. It the very visible cumulative hands of greedy dirtbag employers and the equally visible hand of government trying to police their deadbeat jerk asses.

[Micawber]

62
The number of months since the last minimum wage increase, in July 2009.

12
The number of months between each of the last three minimum wage increases, to $5.85 in July 2007, then to $6.55 in July 2008, and finally to the current $7.25 minimum in July 2009.

23
The number of states — not including Washington, D.C. — that have raised the minimum wage above the federal rate. The highest state minimum wage is in Washington state, at $9.32 an hour — still below the proposed federal minimum.

minimum wage

5.8%
The purchasing power the federal minimum wage has lost to inflation since the last time it was raised, according to Pew data from 2013. The left-leaning National Employment Law Project reports that the real value of the minimum wage peaked in 1968, when its $1.60-an-hour rate would have been worth close to $10.50 in today’s economy.

$21.72
What the minimum wage would have been in 2012 if it had kept up with worker productivity since the late-1940s, according to a study published last year.

1,532,000
The number of hourly workers who were making the federal minimum wage in 2013, according to Pew. About 50.4 percent of these workers were ages 16 to 24, and just under a quarter were teenagers. About 64 percent of them worked part time.

An additional 1.8 million tipped employees, full-time students, disabled workers and others holding jobs exempted from federal minimum wage requirements earned wages of less than $7.25 an hour. The federal minimum wage for tipped workers is $2.13 per hour.

27,800,000
The number of workers who would see an increase in wages if the federal minimum were to be increased to $10.10 over three years. According to the Economic Policy Institute, 88 percent of them are older than 20 and a third are over 40. National Employment Law Project says two-thirds of all low-wage workers were employed by large, highly profitable corporations.

5,000,000
The number of people who would have been lifted out of poverty under the plan to raise the minimum wage to $10.10 over three years, according to a study published late last year.

The Congressional Budget Office has estimated that around 500,000 jobs may be eliminated if the minimum wage was raised to $10.10, though other estimates have suggested the impact would be significantly smaller.

minimum wage workers

Protesters rally for better wages at a Wendy’s restaurant in Detroit on Dec. 5, 2013.
(AP Photo/Paul Sancya)

$267.80
The weekly take-home pay for a 40-hour-a-week minimum-wage employee, after Social Security and Medicare taxes. That adds up to $13,926.38 per year, or just over $1,150 per month. The commonly cited minimum wage annual salary for a 40-hour-a-week worker is $15,080 — before taxes.

$1,099
The average monthly apartment rental price in the United States in the second quarter of 2014, according to real estate data firm Reis Inc. This is almost as much as you’d make in a month on a single minimum-wage income, which is one reason why minimum-wage workers typically can’t afford to be the primary breadwinners of their families.

$420
The average price of a one-bedroom rental in Benton County, Iowa, the cheapest U.S. zip code, according to Find The Best. After paying for rent, a single, full-time minimum-wage employee would have less than $750 to spend on everything else for the rest of the month.

minimum wage workers housing

Low-wage workers rally on Capitol Hill in Washington, April 28, to urge Congress to raise the minimum wage. (AP Photo)

$163
The average a household pays for basic gas and electricity per month, according to an analysis of the spending habits of Mint.com users across the nation in 2011. Utility prices have since risen in many places.

$3.34
The average U.S. price for a gallon of gasoline , as of the last week of September. If a car has a 15-gallon tank, it would cost around $50 to fill up. That’s about a full day’s pay on minimum wage.

On top of gas, drivers must pay for car insurance, which according to a 2011 report came out to a nationwide average of around $800 a year. Premiums have increased in many places since, with estimates of average rates as high $1,500 a year. That would be more than a month’s salary for a minimum-wage earner.

$91
The price of the cheapest monthly pass for the SEPTA public transportation system in Philadelphia, one of the largest U.S. cities without state or local laws raising the minimum wage above the federal standard. A minimum-wage earner who relies on public transportation to get to work in Philadelphia would spend more than $1,000 each year on these passes, from annual pay of around $14,000.

Activists in Pennsylvania have been pushing for a minimum-wage increase to $10.10, but state lawmakers didn’t consider a bill last legislative session. This year, Philadelphia Mayor Michael Nutter signed an executive order raising the minimum wage for city contractors to more than $10 an hour, but the measure doesn’t affect other employees.

$5,032
The estimated amount a low-income, single-parent family will spend on food, clothing, child care and miscellaneous needs during the first year of a baby’s life, according to 2013 data compiled by the U.S. Department of Agriculture. The overall cost is significantly larger when housing, transportation and health care expenses are included. These numbers help explain why second sources of income (from other family members or individuals) and assistance programs are vital to low-wage and minimum-wage earners.

3,531,034
The number of hours a federal minimum wage worker would have to log to match the compensation package offered to Walmart CEO Doug McMillon for fiscal 2014, before taxes. McMillon was offered $25.6 million earlier this year, most of it in stock awards tied to performance — a 168 percent increase from the prior year. USA Today reported this year that former Walmart CEO Mike Duke stepped down in January with $140.1 million in deferred compensation in retirement funds, vested shares and stock options.

Walmart, the largest private employer in the U.S., announced this year that it wouldn’t oppose a hike to the federal minimum wage, so long as the proposal didn’t specifically call out the company’s business practices. Walmart’s president noted at the time that only 5,000 of the company’s 1 million or so U.S. hourly employees currently make the federal minimum wage, though many more make less than the $10.10 rate proposed in Congress.

walmart doug mcmillon

Doug McMillon, president and chief executive officer of Wal-Mart Stores Inc., listens during the U.S.-Africa Business Forum in Washington on Aug. 5. (Drew Angerer/Bloomberg via Getty Images)

54%
The percentage of Americans who support raising the federal minimum wage to $10.10 an hour, according to a recent survey by the left-leaning Public Policy Polling. Polls have consistently shown strong support for increasing the federal minimum wage, with a survey released in June showing 71 percent of respondents favor raising the rate generally. A Gallup poll released in November found that 76 percent of Americans would vote to raise the federal minimum wage to $9 an hour in a hypothetical national referendum. Even Republicans — including former GOP presidential candidate Mitt Romney — and small business owners want to see the minimum wage increased.

ALSO ON HUFFPOST

[Getin the ring]

I think it is fine for Seattle, they are so screwed up anyway from liberal policy not sure this will impact beyond the norm.
Let the liberal nutjobs pay more for lattes, or hamburgers, or getting their cars serviced or whatever else the businesses have to raise the price of to pay for this.

they reap what they sow, just like their liberal drug policies where crack dealers go to taxpayer funded rehabs instead of jail

[Micawber]

Republicans hate freedom. The like to criminalize behavior and send people to jail. Thet want more and harsher criminal laws. They like to kill foreigners. They like the government to take over pussy.

Except for white rich people in white collar jobs. Leave those people alone.

[tsuke]

62
The number of months since the last minimum wage increase, in July 2009.

12
The number of months between each of the last three minimum wage increases, to $5.85 in July 2007, then to $6.55 in July 2008, and finally to the current $7.25 minimum in July 2009.

23
The number of states — not including Washington, D.C. — that have raised the minimum wage above the federal rate. The highest state minimum wage is in Washington state, at $9.32 an hour — still below the proposed federal minimum.

minimum wage

5.8%
The purchasing power the federal minimum wage has lost to inflation since the last time it was raised, according to Pew data from 2013. The left-leaning National Employment Law Project reports that the real value of the minimum wage peaked in 1968, when its $1.60-an-hour rate would have been worth close to $10.50 in today’s economy.

$21.72
What the minimum wage would have been in 2012 if it had kept up with worker productivity since the late-1940s, according to a study published last year.

1,532,000
The number of hourly workers who were making the federal minimum wage in 2013, according to Pew. About 50.4 percent of these workers were ages 16 to 24, and just under a quarter were teenagers. About 64 percent of them worked part time.

An additional 1.8 million tipped employees, full-time students, disabled workers and others holding jobs exempted from federal minimum wage requirements earned wages of less than $7.25 an hour. The federal minimum wage for tipped workers is $2.13 per hour.

27,800,000
The number of workers who would see an increase in wages if the federal minimum were to be increased to $10.10 over three years. According to the Economic Policy Institute, 88 percent of them are older than 20 and a third are over 40. National Employment Law Project says two-thirds of all low-wage workers were employed by large, highly profitable corporations.

5,000,000
The number of people who would have been lifted out of poverty under the plan to raise the minimum wage to $10.10 over three years, according to a study published late last year.

The Congressional Budget Office has estimated that around 500,000 jobs may be eliminated if the minimum wage was raised to $10.10, though other estimates have suggested the impact would be significantly smaller.

minimum wage workers

Protesters rally for better wages at a Wendy’s restaurant in Detroit on Dec. 5, 2013.
(AP Photo/Paul Sancya)

$267.80
The weekly take-home pay for a 40-hour-a-week minimum-wage employee, after Social Security and Medicare taxes. That adds up to $13,926.38 per year, or just over $1,150 per month. The commonly cited minimum wage annual salary for a 40-hour-a-week worker is $15,080 — before taxes.

$1,099
The average monthly apartment rental price in the United States in the second quarter of 2014, according to real estate data firm Reis Inc. This is almost as much as you’d make in a month on a single minimum-wage income, which is one reason why minimum-wage workers typically can’t afford to be the primary breadwinners of their families.

$420
The average price of a one-bedroom rental in Benton County, Iowa, the cheapest U.S. zip code, according to Find The Best. After paying for rent, a single, full-time minimum-wage employee would have less than $750 to spend on everything else for the rest of the month.

minimum wage workers housing

Low-wage workers rally on Capitol Hill in Washington, April 28, to urge Congress to raise the minimum wage. (AP Photo)

$163
The average a household pays for basic gas and electricity per month, according to an analysis of the spending habits of Mint.com users across the nation in 2011. Utility prices have since risen in many places.

$3.34
The average U.S. price for a gallon of gasoline , as of the last week of September. If a car has a 15-gallon tank, it would cost around $50 to fill up. That’s about a full day’s pay on minimum wage.

On top of gas, drivers must pay for car insurance, which according to a 2011 report came out to a nationwide average of around $800 a year. Premiums have increased in many places since, with estimates of average rates as high $1,500 a year. That would be more than a month’s salary for a minimum-wage earner.

$91
The price of the cheapest monthly pass for the SEPTA public transportation system in Philadelphia, one of the largest U.S. cities without state or local laws raising the minimum wage above the federal standard. A minimum-wage earner who relies on public transportation to get to work in Philadelphia would spend more than $1,000 each year on these passes, from annual pay of around $14,000.

Activists in Pennsylvania have been pushing for a minimum-wage increase to $10.10, but state lawmakers didn’t consider a bill last legislative session. This year, Philadelphia Mayor Michael Nutter signed an executive order raising the minimum wage for city contractors to more than $10 an hour, but the measure doesn’t affect other employees.

$5,032
The estimated amount a low-income, single-parent family will spend on food, clothing, child care and miscellaneous needs during the first year of a baby’s life, according to 2013 data compiled by the U.S. Department of Agriculture. The overall cost is significantly larger when housing, transportation and health care expenses are included. These numbers help explain why second sources of income (from other family members or individuals) and assistance programs are vital to low-wage and minimum-wage earners.

3,531,034
The number of hours a federal minimum wage worker would have to log to match the compensation package offered to Walmart CEO Doug McMillon for fiscal 2014, before taxes. McMillon was offered $25.6 million earlier this year, most of it in stock awards tied to performance — a 168 percent increase from the prior year. USA Today reported this year that former Walmart CEO Mike Duke stepped down in January with $140.1 million in deferred compensation in retirement funds, vested shares and stock options.

Walmart, the largest private employer in the U.S., announced this year that it wouldn’t oppose a hike to the federal minimum wage, so long as the proposal didn’t specifically call out the company’s business practices. Walmart’s president noted at the time that only 5,000 of the company’s 1 million or so U.S. hourly employees currently make the federal minimum wage, though many more make less than the $10.10 rate proposed in Congress.

walmart doug mcmillon

Doug McMillon, president and chief executive officer of Wal-Mart Stores Inc., listens during the U.S.-Africa Business Forum in Washington on Aug. 5. (Drew Angerer/Bloomberg via Getty Images)

54%
The percentage of Americans who support raising the federal minimum wage to $10.10 an hour, according to a recent survey by the left-leaning Public Policy Polling. Polls have consistently shown strong support for increasing the federal minimum wage, with a survey released in June showing 71 percent of respondents favor raising the rate generally. A Gallup poll released in November found that 76 percent of Americans would vote to raise the federal minimum wage to $9 an hour in a hypothetical national referendum. Even Republicans — including former GOP presidential candidate Mitt Romney — and small business owners want to see the minimum wage increased.

ALSO ON HUFFPOST

so wierd. With 4.5% unemployment you would think wages would be skyrocketing.

[Getin the ring]

so wierd. With 4.5% unemployment you would think wages would be skyrocketing.

again, discussing corporate profit, or low unemployment when arguing the minimum wage is crazy, they have nothing to do with one another

[Cancel 2018.1]

So you don't oppose the regulation.

Not at all.

There ain't no invisible hand.

Not in pure communism. Fortunately we are in more of a free market economy with some regulation. Didn't you once say you were an economics major? Wow, still you don't understand the concept of marginal utility. What a wasted education. You can't even use it to bs about economics in your local pub.

It the very visible cumulative hands of greedy dirtbag employers

I'm a greedy dirtbag employer. I could afford to pay my employees more but I don't. I pay them what I think is fair for their experience level, plus Christmas bonuses, nothing more. I make about double what all my employees' salaries are together. I deserve to be a greedy dirtbag employer - I went thru the rigorous education and took the risk of starting a bidness.

and the equally visible hand of government trying to police their deadbeat jerk asses.

The visible hand of gubmint is no match for the free market.

[Althea]

538 is reporting on the initial feedback/results of Seattle's minimum wage increase. Not surprising to hear they may have gone too far. Democratic controlled Baltimore voted down an increase to $15 in the last several months. More info will continue to come out as more cities attempt to raise their minimum wage.



Seattle’s Minimum Wage Hike May Have Gone Too Far

As cities across the country pushed their minimum wages to untested heights in recent years, some economists began to ask: How high is too high?


Seattle, with its highest-in-the-country minimum wage, may have hit that limit.

In January 2016, Seattle’s minimum wage jumped from $11 an hour to $13 for large employers, the second big increase in less than a year. New research released Monday by a team of economists at the University of Washington suggests the wage hike may have come at a significant cost: The increase led to steep declines in employment for low-wage workers, and a drop in hours for those who kept their jobs. Crucially, the negative impact of lost jobs and hours more than offset the benefits of higher wages — on average, low-wage workers earned $125 per month less because of the higher wage, a small but significant decline.

“The goal of this policy was to deliver higher incomes to people who were struggling to make ends meet in the city,” said Jacob Vigdor, a University of Washington economist who was one of the study’s authors. “You’ve got to watch out because at some point you run the risk of harming the people you set out to help.”

The paper’s findings are preliminary and have not yet been subjected to peer review. And the authors stressed that even if their results hold up, their research leaves important questions unanswered, particularly about how the minimum wage has affected individual workers and businesses. The paper does not, for example, address whether displaced workers might have found jobs in other cities or with companies such as Uber that are not included in their data.

Still, despite such caveats, the new research is likely to have big political implications at a time when the minimum wage has returned to the center of the economic policy debate. In recent years, cities and states across the country have passed laws and ordinances that will push their minimum wages as high as $15 over the next several years. During last year’s presidential campaign, Hillary Clinton called for the federal minimum wage to be raised to $12, and she faced pressure from activists to propose $15 instead. (The federal minimum wage is now $7.25 an hour.) Recently, however, the minimum-wage movement has faced backlash from conservatives, with legislatures in some states moving to block cities from increasing their local minimums.

Many economists, meanwhile, have acknowledged substantial uncertainty over the likely effects of the recent wage hikes. Most — though by no means all — past research has found that modest increases to the minimum wage have little impact on employment, and that if employers do eliminate jobs or cut back hours, those losses are dwarfed by the income gains enjoyed by the majority of workers who keep their jobs. But those studies were mostly based on minimum wages that were much lower than the ones beginning to take effect now. Even some liberal economists have expressed concern, often privately, that employers might respond differently to a minimum wage of $12 or $15, which would affect a far broader swath of workers than the part-time fast-food and retail employees who typically dominate the ranks of minimum-wage earners. Other economists said there simply wasn’t enough evidence to predict the impact of minimum wages that high. The new laws in Seattle and other cities, then, could provide an ideal testing ground.

“The literature shows that moderate minimum wage increases seem to consistently have their intended effects, [but] you have to admit that the increases that we’re now contemplating go beyond moderate,” said Jared Bernstein, an economist at the liberal Center on Budget and Policy Priorities who was not involved in the Seattle research. “That doesn’t mean, however, that you know what the outcome is going to be. You have to test it, you have to scrutinize it, which is why Seattle is a great test case.”

Seattle’s minimum-wage ordinance was one of the earliest and most aggressive of the recent wave. In 2014, the city passed a law raising the city’s minimum wage — already among the nation’s highest, at more than $9 an hour — to $15 an hour over several years. 2 Economists immediately saw the law as an opportunity to study the effects of an unusually high minimum wage, and the city of Seattle agreed to help fund a team of researchers to look into the policy’s impact.

The group’s first major report, released last year, looked at the first big increase under the law, in April 2015, in which the minimum wage went from $9.47 to $11 for large employers. The report found relatively little effect, for good or ill: The policy led to some lost jobs and hours, the report concluded, but those were more or less offset by the increased income enjoyed by workers. For workers who kept their jobs, the higher wage was a clear benefit; for low-wage workers as a whole, the impact was minimal. One reason for the muted impact: In high-cost Seattle, not many workers earned less than $11 an hour even before the law took effect.

Monday’s report looks at the impact of the second wage increase under the law: the January 2016 hike to $13 an hour for large employers. This time, the findings look very different: Compared to a counterfactual in which Seattle didn’t raise its minimum wage, the number of hours worked by low-wage workers (those earning less than $19 an hour) fell by 9.4 percent over the first nine months of 2016, and the number of low-wage jobs fell by 6.8 percent. Cumulatively, those add up to the losses of 5,000 jobs and 3.5 million hours of work. The average low-wage employee, they found, saw his or her monthly paycheck shrink by $125, or 6.6 percent.

The study is far from the last word on the impact of Seattle’s law, let alone the $15 minimum wage movement more generally. Indeed, just last week another study used similar methods to reach seemingly the opposite conclusion: A report from the Institute for Research on Labor and Employment at the University of California, Berkeley, found that Seattle’s minimum wage, “raises pay without costing jobs,” as a press release on the study announced.

The Berkeley study, however, looked exclusively at the restaurant industry. That has been a common practice in minimum-wage research, because the industry is one of the largest employers of low-wage workers. But the University of Washington study suggests a possible flaw in that approach: That research, too, found essentially no job losses in the restaurant sector as a result of the city’s minimum wage hike. That suggests that studies that focused on the restaurant industry might have missed larger effects in other sectors. (Michael Reich, one of the authors of the Berkeley study, said he was confident in his findings. Bernstein said focusing on restaurants, especially fast food, was a widely accepted approach that was well grounded in economic theory.)

The Washington study has one big advantage over most past research: The authors had access to detailed data on the hours and earnings of nearly all employees in Washington state, allowing them to measure the effects of the minimum wage much more directly than is possible with less complete datasets. 3 But the study has its own weaknesses. Because the researchers had data only for Washington state, they had only a limited pool of places they could compare Seattle to — a key step for figuring out the effects of the minimum wage policy. (The Berkeley paper, by contrast, compared Seattle to similar communities across the country. 4 )

The Washington researchers also had to exclude many multilocation businesses, which means their sample could leave out major low-wage employers such as fast-food chains. Reich, in a letter to Seattle’s mayor responding to the study, called the findings “not credible” in part because they differed so much from those of past research. But Jeffrey Clemens, an economist at the University of California, San Diego who has studied the minimum wage, said it isn’t surprising that Seattle’s minimum wage would have an unusually big impact because it is so much higher than most other minimums.

Even if the Washington study stands up to scrutiny — and it will get lots more scrutiny — it carries important caveats. Vigdor cautioned that the study makes no claims about individual workers: It is possible, for example, that workers who lost their jobs after the wage hike quickly found other jobs outside of Seattle, or that they made up for lost hours by driving for Uber. Neither shift would show up in the researchers’ data.

Some people almost certainly benefited from the higher wage. David Rolf, president of SEIU 775, a union representing home care and nursing home workers in Washington state, said many of his members have seen clear gains since the law took effect.

“It’s no one’s idea of a luxury wage, but caregivers in Seattle can escape poverty if they work full time, and that’s something most caregivers across the country can’t say,” Rolf said.

But Rolf also noted that workers have benefitted from the strong overall economy in Seattle, where the 3.2 percent unemployment rate is forcing companies to compete with each other for employees. Economists say that any negative effects of the minimum wage could become more evident when the economy inevitably cools. And Vigdor said that while experienced workers have probably benefitted from the higher wage, new entrants to the labor force, including teenagers, have probably lost out.“This is a ‘canary in the coal mine’ moment,” said David Autor, an MIT economist who wasn’t involved in the Seattle research.

Autor noted that high-cost cities such as Seattle are the places that should be in the best position to absorb the impact of a high minimum wage. So if the policy is hurting workers there — and Autor stressed that the Washington report is just one study — that could signal trouble as the recent wage hikes take effect in lower-cost parts of the country.

“Nobody in their right mind would say that raising the minimum wage to $25 an hour would have no effect on employment,” Autor said. “The question is where is the point where it becomes relevant. And apparently in Seattle, it’s around $13.”



https://fivethirtyeight.com/features...e-too-far/amp/

Just read through this elsewhere. Here...I gave you a learning aid, in case you stopped at the headline that bolsters your personal opinion.


This is an interesting case study because it's just one city in the state. Seattle is booming in general, which may or may not be a commentary on the wage hike. Naysayers predicted doom and gloom, but the economy wasn't affected by the proposed wage hikes.

There's still plenty of studying to be done. Of course, an immediate issue in other states, was the fact that low wage workers lost public assistance as they approached a new income level. Which is a plus, as they reduce the burden on taxpayers.

[Althea]

How does reducing employment help get the economy moving?

Employment wasn't reduced by the increased min wage

[cawacko]

Just read through this elsewhere. Here...I gave you a learning aid, in case you stopped at the headline that bolsters your personal opinion.


This is an interesting case study because it's just one city in the state. Seattle is booming in general, which may or may not be a commentary on the wage hike. Naysayers predicted doom and gloom, but the economy wasn't affected by the proposed wage hikes.

There's still plenty of studying to be done. Of course, an immediate issue in other states, was the fact that low wage workers lost public assistance as they approached a new income level. Which is a plus, as they reduce the burden on taxpayers.

Since reading comprehension is difficult for you feel free to read the first sentence i wrote in this post. I said initial feedback. I read the article, I understand this isn't final, hence my comment.

[cawacko]

Employment wasn't reduced by the increased min wage

From the second paragraph:

""New research released Monday by a team of economists at the University of Washington suggests the wage hike may have come at a significant cost: The increase led to steep declines in employment for low-wage workers, and a drop in hours for those who kept their jobs. Crucially, the negative impact of lost jobs and hours more than offset the benefits of higher wages — on average, low-wage workers earned $125 per month less because of the higher wage, a small but significant decline.""

[PostmodernProphet]

Soooooooo........if you click a link to read it at the source..........you still have to scroll.

If you don't like reading any particular poster's posts, just put them on 'ignore.'

I normally solve the problem by skipping posts that have nothing but links in them.....then I don't have to scroll at all.......

[PostmodernProphet]

Didn't you once say you were an economics major? Wow, still you don't understand the concept of marginal utility.

if you go to a university that has professors who condemn capitalism, you can do it and graduate cum laude.......

[Althea]

Since reading comprehension is difficult for you feel free to read the first sentence i wrote in this post. I said initial feedback. I read the article, I understand this isn't final, hence my comment.

Oh...I read your first sentence

Not surprising to hear they may have gone too far. Democratic controlled Baltimore voted down an increase to $15 in the last several months.