Study: Young, new workers struggling amid Seattle $15 minimum wage

Oct 23, 2018, 11:24 AM | Updated: 12:54 pm
Jayapal minimum wage, Seattle City Council...
(AP file photo)
(AP file photo)

It is much more difficult to enter the minimum wage workforce in Seattle than just three years ago.

According to University of Washington researchers, Seattle’s employment landscape has changed, and the $15 minimum wage is likely influencing employers’ hiring practices.

“When the minimum wage is as high as it is — you are looking at someone with no experience who you are going to have to train on the job, compared to finding an experienced worker who knows the job already, who can start work on day one, that is changing the decision for (employers),” said UW researcher Jacob Vigdor. “They are more likely to favor hiring someone with experience, if they can find them.”

“What we see in Seattle is the number of people newly entering the workforce sort of peaked right around the time the minimum wage started increasing, and it’s actually declined since then,” he said.

It’s the latest insight into how Seattle is reacting to the $15 minimum wage that the city council approved and enacted in 2015. Vigdor has been studying the minimum wage move since the start, as mandated by the city council. Last year, the University of Washington’s ongoing study indicated that the number of low-wage jobs in Seattle was shrinking. Basically, employers were hiring less, or keeping fewer people on staff.

Employers may have given extra hours to the workers they retained, or just cut hours, too. Overall, the money paid out to Seattle minimum wage workers had declined.

Vigdor says there are a few ways to interpret the latest information.

“There is a possibility here that we are seeing fewer people come into the low-wage workforce, not because there are a lot of people out there looking and not finding work, it’s also possible that there are a lot fewer people looking,” he said. “One thing we know is that it is really expensive to live in this region. And the number of people who are moving to Seattle thinking ‘I’ll just rent an apartment there and find a minimum wage job’ is probably low.”

Seattle minimum wage study

As the study continues, researchers are following individual workers over time – about 14,000 employees. Vigdor says that the $15 minimum wage is helping some and not helping others. It depends on which group of minimum wage workers you consider.

“We start out with about 14,000 people who we observe in our data working the lowest-paid jobs in Seattle at the beginning of 2015, before the minimum wage started going up,” Vigdor said. “There is a big distinction between the workers putting in more hours on the job and workers putting less hours on the job.”

Workers who put in more hours saw an increase in pay of about $20 a week. Those same workers also saw their hours go down slightly, but not enough to chip away at the minor pay bump.

“The less experienced workers, they more or less broke even,” Vigdor said. “They did see their hourly wages go up, but their hours were cut back enough that, basically, they are making the same amount of money; they are working fewer hours to make that money.”

The takeaway so far is that the $15 minimum wage is going to have trade-offs. Vigdor’s study said that the low-paying jobs went down about five percent since the new wage, but the flip side of that is that 95 percent of that group maintained their work.

“I think when we evaluate this policy, we have to think if we are willing to accept that it is worth the benefit of putting more money in people’s pockets if we have this smaller group of people who are having more difficulty finding their first job,” he said.

Vigdor said the study is now merging in more data, such as records from the Employment Security Department, to get a better picture of who the people are in the labor force.

“It’s really a question of values as to whether they consider this outcome to be good,” Vigdor said. “…for some people, the folks who are taking home more money as a consequence of this, they were the people we were trying to help. They were the people who had been in the low-wage work force for a long time. They are not necessarily upwardly mobile people. They are the people for whom these were dead-end jobs and we put more money in their pockets.”

“Some people might look at teenagers and other young people looking for first jobs and are having more difficulty and they might say to themselves ‘they are going to be OK in the end, because they are going to stay in school. They are going to get certificates and degrees and they are going to end up in a labor market that is much better than the minimum wage labor market,’” he said.

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Study: Young, new workers struggling amid Seattle $15 minimum wage