Why a higher minimum wage might not help, or hurt, workers
Last year, a study conducted by the University of Washington determined that Seattle’s $15 per hour minimum wage was actually hurting low-wage workers, not helping them. But now, new evidence may suggest otherwise.
The Washington Post reported that recent studies have changed the minds of many economists by finding that minimum wage increases actually don’t do anything.
“Ultimately they say it’s a wash,” KIRO Radio’s Tom Tangney said.
One paper, co-written by Arindrajit Dube of the University of Massachusetts, looked at 137 different wage increases across the country since 1979.
While minimum wage increases do eliminate low-paying jobs, the paper states, they also add jobs that pay at or more than the new minimum. Thus, not a lot changes in terms of the number of available jobs.
Minimum wage outlier
Seattle might be a bit of an outlier when it comes to pay hikes, however. According to The Washington Post, wages in Seattle rose by an average of $3.53, or about 37 percent, in less than a year. The wages that Dube’s paper considered (more than 100) only increased by an average of 10 percent.
“They’re looking at the fact that a lot of these states are increasing 15 cents,” John Curley said. “Can the market absorb 15 cents? Yes. But can the market absorb a 30 percent increase? If it has no effect, let’s pay everybody $50 an hour.”
“It’s taking years to establish,” Tangney retorted. “That’s why they say we’re not going to know about the impact of the Seattle thing for a few years.”
Listen to the full conversation on the Tom and Curley Show here.