What $15 per hour did to Seattle

By:  Diane Benjamin

Seattle’s $15 per hour minimum wage was passed in 2014.  The increase happens gradually, $15 per hour isn’t reached until 2021.

The City of Seattle has hired the University of Washington to study the effects of this law ever since it passed.  The stories based on their studies say what the writer wants them to say.  If the law had any negative effects some stories downplayed them.

This story was written in 2017:    https://www.seattletimes.com/business/uw-study-finds-seattles-minimum-wage-is-costing-jobs/

Excerpts:

The city’s escalating minimum wage has meant a slight increase in pay among workers earning up to $19 per hour, but the hours worked in such jobs have shrunk, a study commissioned by the city found. It estimates there would be 5,000 more such jobs without the Seattle law.

Seattle’s minimum-wage law is boosting wages for a range of low-paid workers, but the law is causing those workers as a group to lose hours, and it’s also costing jobs, according to the latest study on the measure passed by the City Council in 2014.

The team concluded that the second jump had a far greater impact, boosting pay in low-wage jobs by about 3 percent since 2014 but also resulting in a 9 percent reduction in hours worked in such jobs. That resulted in a 6 percent drop in what employers collectively pay — and what workers earn — for those low-wage jobs.

For an average low-wage worker in Seattle, that translates into a loss of about $125 per month per job.

“Traditionally, a high proportion of workers in the low-wage market are not experienced at all: teens with their first jobs, immigrants with their first jobs here,” he said. “Data is pointing to: Since we have to pay more, employers are looking for people with experience who can do the job from Day 1.”

This is another story from this month also based on continuing studies by the University of Washington:    https://www.seattletimes.com/seattle-news/politics/seattles-minimum-wage-hikes-didnt-boost-supermarket-prices-new-uw-study-says/

Excerpts:

Seattle’s trendsetting minimum-wage increases didn’t boost supermarket prices in the city in the two years after they began, according to a new study by University of Washington researchers.

Most child-care businesses did see their labor costs increase as the hikes were carried out, however, leading in some cases to staffing reductions, according to another UW study.

This past October, a UW team reported that more experienced Seattle workers had seen their paychecks rise and stayed in jobs longer, while less experienced workers had seen less positive change.

For the child-care study, UW researchers looked at payroll data from 2014 and 2016 for about 200 businesses. They also surveyed 41 child-care directors three times and interviewed 15 directors.

More than half saw their costs increase, and the most common response was to raise tuition while cutting staff hours or jobs.

The 2019 story down plays what happens to the least experienced and educated workers.  They call it a “less positive change”.  The first story spells out the results to this group more clearly.  They may be making more per hour, but they aren’t working as many hours.

The cost of child care is always a concern, both articles state the cost will increase and likely fewer people will be taking care of more kids.

Both articles claim the cost of food did not increase.  I’m betting their grocery stores have done what Walmart is doing – self checkout.

One more article from 2014 when SeaTac, (small city almost exclusively defined by the Seattle-Tacoma International Airport)  implemented a $15 minimum wage:     https://shiftwa.org/sea-tac-workers-not-happy-with-15-min-wage/

Excerpts:

A writer for NW Asian Weekly recently blogged about her experience attending an event at a SeaTac hotel. She asked employees if they were “happy with the $15 wage.” The ensuing conversations,

“It sounds good, but it’s not good,” the woman said.

“Why?” I asked.

“I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added.

“The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay.

“What else? I asked.

“I have to pay for parking,” she said.

“I then asked the part-time waitress, who was part of the catering staff.

“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.”

SeaTac went straight to $15 per hour instead of stepping up gradually.

It seems pretty clear:

Raising the minimum wage is going to hurt the people it was meant to help – low wage uneducated workers.

(Unless the goal is really something else, like raising union wages that are tied to increases in the minimum wage)

11 thoughts on “What $15 per hour did to Seattle

  1. Paying every employee that higher minimum wage will make it tougher to reward the better workers with higher pay because of budgetary restraints. This will lead to demoralization of the more deserving, due to the idiotic wage law interference in the free market place. It’s akin to the issuance of participation trophies rather than rewarding 1st and 2nd place.

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  2. Another important thing to note is that Seattle has considerably more money than Illinois. I just googled “Seattle median home price” and it turned up an answer of $763,600. I googled “Danville il median home price” which turned up $51,500. Seattle median home prices are 15 times more than Danville. Take the damage done to Seattle by a $15 minimum wage and try to imagine how much more damage will be done to a city like Danville that (by one measure) has 1/15th the amount of money.

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  3. Illinois would like one to think this increase is for the workers only. That is today’s laugh. It is about being able to collect more tax money from personal income taxes, increased costs of goods sold thus higher sales taxes Simply put, you pay more money to produce goods, the cost of goods will rise. X% of 10000 is more than X% of 5000….it has more to do with greedy Illinois looking to sugar coat and make acceptable collecting more money from the working serfs..

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  4. Illinois State University is going to have to work hard to spin this in the right direction to appease the SJW Faculty, Students and staff. The grad students worked so hard (sarcasm) to have SEIU negotiate $15/hr for them. Looks like that was a waste of time.

    How many students aren’t going to have ANY employment because ISU can’t afford to pay good service workers $15/hr in addition to the Grads and their SEIU demands.

    The staff with no unions and no protection from special groups at ISU are screwed. How many staff have worked hard for years to get that $18.50+/hr position? I know it’s going to get tense when the entitled students are confronted by staff who have zero incentive to work any harder.

    GOOD LUCK DIETZ.

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  5. If a business plan involves paying slave wages, then come up with a new plan. Walmart got more than $6 billion in so-called corporate welfare (SNAP, housing assistance, Medicaid), costing YOU, the taxpayer. If they’re not paying their employees enough and they have to use programs you pay for, then pay them more. https://www.forbes.com/sites/clareoconnor/2014/04/15/report-walmart-workers-cost-taxpayers-6-2-billion-in-public-assistance/#270ca781720b

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    1. Walmart has saved people many millions of dollars by selling products for less than their competitors. You got your wish, Walmart is now eliminating jobs with self check out. Those people who didn’t bother to get an education can now be unemployed. Brilliant move.

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    2. Nothing wrong with ‘slave wages’. If they have skills that make them worth more, they’ll go work elsewhere. If they’re Not worth more, they’re learning job skills so the Can be worth more, and worst case they’re at least Earning half (for example) their expenses with taxpayers picking up the other half.
      After $15 eliminates their job, they have no way to work their way up, and taxpayers are on the hook for paying All their expenses, seemingly forever. Now they really Are slaves, to the Dem Welfare Plantation.
      But then that was the plan all along, wasn’t it?

      Liked by 1 person

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