Last week, supporters of minimum wage increases responded positively when a study from the University of California-Berkeley found that Seattle’s continued increase in its minimum wage – eventually set to land at $15 by 2021 – hasn’t reduced the city’s number of restaurant jobs. Even Seattle Mayor Ed Murray praised the study, stating, “Raising the minimum wage was not just the right thing to do, but the smart thing to do.” But a second study from Seattle’s University of Washington says that Berkeley report may have missed a key point: Though jobs have not been lost, the number of hours minimum wage earners are working have dropped, resulting in less income overall.
According to the University of Washington’s report, though the number of jobs did remain steady and, indeed, overall wages rose about 3 percent, the number of hours being worked by people in those jobs dropped about 9 percent, which in turn led to workers making less money overall – as much as $125 less per month. One key difference in the two studies is that the University of Washington study looked at all minimum wage earners, not just those in the restaurant industry. Additionally, that study had access to detailed data on hours and earnings that the Berkeley study did not, according to the New York Times.
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However, just as the University of Washington report questions the Berkeley report, some economists immediately fired back at this second report suggesting that it doesn’t take a number of key economic factors into effect. For instance, Seattle’s economy has been booming over the course of the same period as the minimum wage increase. The result is that people may be working less minimum wage hours because they are able to find better, non-minimum wage paying work. “The key challenge this study faces is how to separate the normal shift that’s happening in a booming labor market – where low-wage jobs disappear and are replaced by higher-wage jobs – from an actual increase in the minimum wage,” Ben Zipperer of the liberal Economic Policy Institute told the NY Times. “The study exhibits signs that it’s not able to do it.”