An early study of the increase in the minimum wage to $11 in Seattle in 2015 suggests that the rise did not have a significant effect on the overall earnings of low-wage workers. While affected employees did bring home higher hourly wages, they also worked slightly fewer hours on average. Researchers at the University of Washington estimated that the new legal minimum was responsible for an average $0.73 per hour raise for the low-wage workers. The authors note, however, that while the minimum wage increase clearly helped those workers who kept the same number of hours, “offsetting effects on low-wage worker hours and employment muted the impact on labor earnings.”
This study reinforces the need for continued local- and state-level experimentation and research to understand how increases in the minimum wage affect both low-wage workers and the economy in general. But even these early results—especially in a period when Seattle’s economy was strong—suggest that minimum-wage hikes alone are not a sufficient policy solution for stagnant earnings and may put some downward pressure on employment growth.
A report in The Wall Street Journal on Aug. 23 noted that many national companies have recently increased wages for workers at the bottom of the pay scale. Much of the pressure to do so, of course, has been generated by the campaigns for minimum-wage increases. There are other policy avenues that also deserve attention from protesters and legislators alike, especially strengthening the Earned Income Tax Credit, which is designed precisely to increase low-wage income without depressing employment. Perhaps the E.I.T.C. needs a slogan as catchy as “Fight for $15.”
