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Why raising the minimum wage in Seattle did little to help workers

jmotivator

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https://www.washingtonpost.com/news...e-did-little-for-workers-earnings-in-seattle/

Accounting for these factors, the average increase in total earnings due to the minimum wage was small, the researchers concluded. Using their preferred method, they calculated that workers' earnings increased by $5.54 a week on average because of the minimum wage. Using other methods, the researchers found that the minimum wage hike actually caused total weekly earnings to drop -- by as much as $5.22 a week.

So, people lost jobs, others lost hours, and the net effect per worker was between +$5.54 to -$5.22 a week...
 

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jmotivator

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Zounds! You mean to tell me that the market has already reestablished it's balance? In spite of the misguided government dictate!

How Dare It!

I suppose the next thing the Seattle city governmnet is going to out law the law of gravity or something.

I have this theory... follow along because this is ground breaking....

If a business has budgeted, say, $50,000 for minimum wage payroll, and you increase minimum wage by 12% that doesn't mean that the company's budget increases to $56,000.

Crazy, I know....

In addition, my theory posits the possibility that in such a budget shortfall the business will decrease payroll expenses through decreased hours and layoffs to return the budget to $50,000.

We're through the looking glass...
 

ttwtt78640

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Without raising prices, which would likely reduce sales, the business will try to keep mandated labor cost increases to a minimum by adding/combining duties and using fewer workers and/or cutting hours during off peak periods. With these mandates only affecting a small geographic area, raising local prices much will make it cost effective for customers to do their business outside of that small area.
 

eohrnberger

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I have this theory... follow along because this is ground breaking....

If a business has budgeted, say, $50,000 for minimum wage payroll, and you increase minimum wage by 12% that doesn't mean that the company's budget increases to $56,000.

Crazy, I know....

In addition, my theory posits the possibility that in such a budget shortfall the business will decrease payroll expenses by 12% in the form of decreased hours and layoffs.

We're through the looking glass...

"the business will decrease payroll expenses by 12% in the form of decreased hours and layoffs"
This was exactly as predicted, wasn't it? I wonder how many people now owe apologies to how many others? Not that they'll ever be adults about it and own up it.

Next week, they'll come up with the next stupid idea to coerce reality into, and it'll happen all over again and yet cost more people dearly. I'd wish they'd just stop.
 

Moon

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Without raising prices, which would likely reduce sales, the business will try to keep mandated labor cost increases to a minimum by adding/combining duties and using fewer workers and/or cutting hours during off peak periods. With these mandates only affecting a small geographic area, raising local prices much will make it cost effective for customers to do their business outside of that small area.
And for workers outside of Seattle to commute to the city to snag the higher wages. End result will be the slackers whining about $15 an hour before will be the ones in the outside looking in.
 

ttwtt78640

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And for workers outside of Seattle to commute to the city to snag the higher wages. End result will be the slackers whining about $15 an hour before will be the ones in the outside looking in.

That is somewhat offset if the employer elects to use short shifts during peak demand periods (commuting costs then may outweigh the increased hourly pay benefits) but would definitely affect competition for full time positions.

EDIT: I could earn more per hour worked by working in Austin but that would add too much unpaid windshield time and other transportation costs to make it worthwhile.
 
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apdst

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Zounds! You mean to tell me that the market has already reestablished it's balance? In spite of the misguided government dictate!

How Dare It!

I suppose the next thing the Seattle city governmnet is going to out law the law of gravity or something.

That's why the Libbos are hell bent on puting the private sector out of business. Except for their multi-billionaire buddies, of course. Even the Soviets had their monied elite.
 

Mach

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Stop illegal immigration and outsourcing (and illegal outsourcing), and illegal workers (subset of illegal immigrants), in some significant way, and you can talk about raising min wage. else, you're just selling jobs overseas. And worse, these ignorant assholes (politicians, voters) love to cherry pick. Sure your water can't be outsourced, but all the high tech jobs that are actually the key to future growth? Those are the first to go because they are digital and entire groups can be offshored. So you paid a water more and you sent the high tech jobs (and all the R&D, etc) overseas. Bravo.
 

Beaudreaux

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Stop illegal immigration and outsourcing (and illegal outsourcing), and illegal workers (subset of illegal immigrants), in some significant way, and you can talk about raising min wage. else, you're just selling jobs overseas. And worse, these ignorant assholes (politicians, voters) love to cherry pick. Sure your water can't be outsourced, but all the high tech jobs that are actually the key to future growth? Those are the first to go because they are digital and entire groups can be offshored. So you paid a water more and you sent the high tech jobs (and all the R&D, etc) overseas. Bravo.

Kinda hard to outsource a short-order cook's job at McDonalds.
 

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I have this theory... follow along because this is ground breaking....

If a business has budgeted, say, $50,000 for minimum wage payroll, and you increase minimum wage by 12% that doesn't mean that the company's budget increases to $56,000.

Crazy, I know....

In addition, my theory posits the possibility that in such a budget shortfall the business will decrease payroll expenses through decreased hours and layoffs to return the budget to $50,000.

We're through the looking glass...

Which is exactly what we all said would happen and liberal loonies said we were wrong. :roll:
 

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Stop illegal immigration and outsourcing (and illegal outsourcing), and illegal workers (subset of illegal immigrants), in some significant way, and you can talk about raising min wage. else, you're just selling jobs overseas. And worse, these ignorant assholes (politicians, voters) love to cherry pick. Sure your water can't be outsourced, but all the high tech jobs that are actually the key to future growth? Those are the first to go because they are digital and entire groups can be offshored. So you paid a water more and you sent the high tech jobs (and all the R&D, etc) overseas. Bravo.

Hightech jobs go overseas because corporations can pay peanuts for quality people. The corporation I work for requires even entry level call center employees in India and the Philippines to have a college degree and they're only paid up to 7,000 USD per year plus a sack of rice every month. The problem isn't that Americans know what our labor is worth; its that much of the rest of the world doesn't as evidenced by the fact that their pay-scales are partially measured in grains of rice.
 
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Hawkeye10

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Zillow now pegs the typical Seattle rent across all home types at $2,480 a month, up from $2,220 a year ago and $1,840 three years ago.
‘Free lunch is over’ for tenants: $1,000 hikes hit some older Seattle rentals | The Seattle Times

The low wage workers who the min wage was intended to help are getting pushed out by higher wage earners, and because of the massive property taxes Seattle requires to run all of their programs. Seattle is a great city, but it aint NYC or SFO, one wonders where the line is for people to decide it is not worth it. The weather and the Seattle Chill dont help matters. I am sorry, rents cant go up 11%-12% a year for very long.
 

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Notice how this type of story is completely ignored by the media and the Democrats. They scream about raising the minimum wage, we object because there are consequences to such actions, which they never take into account. But it's not just because they are stupid, it's because they are blinded by their commitment to big government and socialistic ways.

They see this as a success. It doesn't matter that the results are a failure, it matters that they were able to use government to force the private sector to submit to their demands. The only one benefiting here are those in government gaining more power and control over us, their subjects. The proof? They know it doesn't help anyone else, but they sure as hell are going to do it again.
 

The Vincer

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Notice how this type of story is completely ignored by the media and the Democrats. They scream about raising the minimum wage, we object because there are consequences to such actions, which they never take into account. But it's not just because they are stupid, it's because they are blinded by their commitment to big government and socialistic ways.

They see this as a success. It doesn't matter that the results are a failure, it matters that they were able to use government to force the private sector to submit to their demands. The only one benefiting here are those in government gaining more power and control over us, their subjects. The proof? They know it doesn't help anyone else, but they sure as hell are going to do it again.

And people have these conspiracy theories that the media only reports on things that support their ideology.
 

Hawkeye10

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Notice how this type of story is completely ignored by the media and the Democrats. They scream about raising the minimum wage, we object because there are consequences to such actions, which they never take into account. But it's not just because they are stupid, it's because they are blinded by their commitment to big government and socialistic ways.

They see this as a success. It doesn't matter that the results are a failure, it matters that they were able to use government to force the private sector to submit to their demands. The only one benefiting here are those in government gaining more power and control over us, their subjects. The proof? They know it doesn't help anyone else, but they sure as hell are going to do it again.

Bigger still, Chicago, one of our biggest and till recently most stable cities, is coming apart at the seams, headed for certain doom, which is really the ARC OF DOOM that runs through the Heartland of America....Milwaukee/Chicago/Detroit/long list of cities in the Rust Belt......

Dont hear a whole lot bout it do ya......

Why is that you suppose?
 

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https://www.washingtonpost.com/news...e-did-little-for-workers-earnings-in-seattle/



So, people lost jobs, others lost hours, and the net effect per worker was between +$5.54 to -$5.22 a week...

You cherry picked but I wouldn't expect much else.

The study is just one of dozens economists have conducted to measure the effects of the minimum wage on local businesses and workers' lives. These studies have often produced contradictory results, even as policymakers and voters across the country are raising the minimum in big ways.

For instance, another major study recently concluded that increasing the minimum wage also increases newborns' birth weights — evidence that young women are healthier and better off overall in states with a higher minimum.

They compared the data from Seattle to data from other places across the state to estimate how things might have gone for workers had the minimum wage not changed, a standard method in economic research.
Not so sure this kind of method would give accurate results. Seems to me Seattle is different from the rest of the state much like NYC is very different than upstate. An average is a poor way to measure as stated in the article, some had significant gains and others has losses depending on their experience, position, employer etc.

Vigdor said his group will try to answer these questions in future research with more data from the state on individual workers.
 

Captain Adverse

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I guess my concern has to do with inflation.

I agree that a minimum wage was never originally meant to be a living wage. However, at the same time our government's ability to print unlimited amounts of money via the Federal Reserve system has the greatest impact on the lowest wage earners when this results in inflation.

Please, budding economists...explain this conundrum to me.
 

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Hightech jobs go overseas because corporations can pay peanuts for quality people. The corporation I work for requires even entry level call center employees in India and the Philippines to have a college degree and they're only paid up to 7,000 USD per year plus a sack of rice every month. The problem isn't that Americans know what our labor is worth; its that much of the rest of the world doesn't as evidenced by the fact that their pay-scales are partially measured in grains of rice.

Because the cost of living where they are is so much lower than it is here. That's what they value, therefore that's what they accept. $7000 in India is a very high salary.
 

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I have this theory... follow along because this is ground breaking....

If a business has budgeted, say, $50,000 for minimum wage payroll, and you increase minimum wage by 12% that doesn't mean that the company's budget increases to $56,000.

Crazy, I know....

In addition, my theory posits the possibility that in such a budget shortfall the business will decrease payroll expenses through decreased hours and layoffs to return the budget to $50,000.

We're through the looking glass...

Your analysis has only one flaw that I can see.

That is, those that make laws concerning business, have never run a business, have never employed anyone, and have never majored or even minored in business in college.

Simply put, them what makes the laws, gots no idea how a business works.
 

Patrickt

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Basically, we're seeing that the government's efforts to manage an economy don't work to anyone's benefit except possibly the government's.
 

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Your analysis has only one flaw that I can see.

That is, those that make laws concerning business, have never run a business, have never employed anyone, and have never majored or even minored in business in college.

Simply put, them what makes the laws, gots no idea how a business works.

We are being told right now that being a businessman has no bearing on being a politician.

Do these people ever get tired of being wrong?
 

ttwtt78640

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But but but minimum wage at that level was supposed to devastate the economy

If it were your job or your hours which were lost (cut?) then it just might appear to be economically devastating to you. ;)
 
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