Seattle min wage hike - early evidence is in - does not raise earnings by much because workers end up with fewer hours

[Loren Pechtel]

People don't willingly take jobs in lower paying areas while continuing to live at the same location.

This is nonsense. People don't willingly take lower paying jobs while continuing to have the same expenses and hours; but knowing what area someone works in tells you nothing about their pay, their hours nor their expenses.

You are trying to force your conclusion on data that cannot support it; you are indulging in a category error.

Who ever turned down a well paid job because it was in a low paying area?

More workers in the area are now working outside it in areas with a lower minimum wage.

Any given change means nothing, a pattern of such changes is important.

(And note that your real minimum wage is little above ours and your training wage is below our minimum wage.)

 

[bilby]

This is nonsense. People don't willingly take lower paying jobs while continuing to have the same expenses and hours; but knowing what area someone works in tells you nothing about their pay, their hours nor their expenses.

You are trying to force your conclusion on data that cannot support it; you are indulging in a category error.

Who ever turned down a well paid job because it was in a low paying area?

More workers in the area are now working outside it in areas with a lower minimum wage.

Any given change means nothing, a pattern of such changes is important.

(And note that your real minimum wage is little above ours and your training wage is below our minimum wage.)

You are searching for meaning in data that it insufficient to carry any meaning - and so you are projecting upon the data conclusions that you wish to see, but which cannot possibly be present.

The level of minimum wage in jurisdictions other than Seattle and its surrounds are of no relevance to this discussion whatsoever, so I am not sure why my noting something that is irrelevant is important to you; But by the way, we don't have a training wage. We have junior rates - they apply to people below the age of 21, on a sliding scale based only on age. Training has nothing to do with it. And our real minimum wage is very significantly above yours - US$13.62 at current market exchange rates, or US$11.84 using the June 2016 OECD PPP comparison figure - That's US$4.59 per hour (PPP), or 58% more than the current US federal MW rate of $7.25. But perhaps you don't grasp just how significant a small number of additional dollars per hour is to a minimum wage worker - Do you think that a minimum wage earner would say that a 58% increase in their income would provide them with 'a little above' their previous income? Our federal MW for ALL workers over 21 years of age (regardless of any training they do or do not have) is still 7.6% more than the Seattle MW rate of US$11, even when the calculation is done using the PPP adjusted figure. Would you consider a 7.6% pay rise to be 'little'? I wouldn't.

 

[laughing dog]

More workers in the area are now working outside it in areas with a lower minimum wage.

More workers inside the area with the higher minimum wage are working as well.

 

[Loren Pechtel]

More workers in the area are now working outside it in areas with a lower minimum wage.

Any given change means nothing, a pattern of such changes is important.

(And note that your real minimum wage is little above ours and your training wage is below our minimum wage.)

You are searching for meaning in data that it insufficient to carry any meaning - and so you are projecting upon the data conclusions that you wish to see, but which cannot possibly be present.

The level of minimum wage in jurisdictions other than Seattle and its surrounds are of no relevance to this discussion whatsoever, so I am not sure why my noting something that is irrelevant is important to you; But by the way, we don't have a training wage. We have junior rates - they apply to people below the age of 21, on a sliding scale based only on age. Training has nothing to do with it. And our real minimum wage is very significantly above yours - US$13.62 at current market exchange rates, or US$11.84 using the June 2016 OECD PPP comparison figure - That's US$4.59 per hour (PPP), or 58% more than the current US federal MW rate of $7.25. But perhaps you don't grasp just how significant a small number of additional dollars per hour is to a minimum wage worker - Do you think that a minimum wage earner would say that a 58% increase in their income would provide them with 'a little above' their previous income? Our federal MW for ALL workers over 21 years of age (regardless of any training they do or do not have) is still 7.6% more than the Seattle MW rate of US$11, even when the calculation is done using the PPP adjusted figure. Would you consider a 7.6% pay rise to be 'little'? I wouldn't.

No, you're trying to exclude data that you don't like.

The level of minimum wage in other jurisdictions is relevant when people are taking jobs in those jurisdictions instead of locally.

And the crowdsourced PPP numbers give a worse picture of costs in your area. (And this pattern is pretty consistent--the differences are greater than the official data shows.)

 

[bilby]

You are searching for meaning in data that it insufficient to carry any meaning - and so you are projecting upon the data conclusions that you wish to see, but which cannot possibly be present.

The level of minimum wage in jurisdictions other than Seattle and its surrounds are of no relevance to this discussion whatsoever, so I am not sure why my noting something that is irrelevant is important to you; But by the way, we don't have a training wage. We have junior rates - they apply to people below the age of 21, on a sliding scale based only on age. Training has nothing to do with it. And our real minimum wage is very significantly above yours - US$13.62 at current market exchange rates, or US$11.84 using the June 2016 OECD PPP comparison figure - That's US$4.59 per hour (PPP), or 58% more than the current US federal MW rate of $7.25. But perhaps you don't grasp just how significant a small number of additional dollars per hour is to a minimum wage worker - Do you think that a minimum wage earner would say that a 58% increase in their income would provide them with 'a little above' their previous income? Our federal MW for ALL workers over 21 years of age (regardless of any training they do or do not have) is still 7.6% more than the Seattle MW rate of US$11, even when the calculation is done using the PPP adjusted figure. Would you consider a 7.6% pay rise to be 'little'? I wouldn't.

No, you're trying to exclude data that you don't like.

The level of minimum wage in other jurisdictions is relevant when people are taking jobs in those jurisdictions instead of locally.

How are MW workers from Seattle able to afford to relocate to Australia???

And the crowdsourced PPP numbers give a worse picture of costs in your area. (And this pattern is pretty consistent--the differences are greater than the official data shows.)

No, you're trying to exclude data that you don't like.

 

[ZiprHead]

http://ritholtz.com/2016/12/seattle-min-wage-update/

 

[Jimmy Higgins]

Hold on, the sky didn't fall?

I'll take 19 minutes less a week over the sky falling any day.

So they are complaining about hours dropping, not employment vanishing? People against the hikes must think we are idiots that can't remember a thing they've said.

 

[laughing dog]

To be fair, employment may refer to hours worked, not jobs.

 

[Jimmy Higgins]

To be fair, employment may refer to hours worked, not jobs.

If total number of jobs dropped, they (people against a living wage) would have mentioned it, in BOLD ALL CAPS[/font=24].

 

[Alcoholic Actuary]

According to the cited study, the earnings of Seattle's minimum wage workers went up. And their hours worked and employment went up (just by less than surrounding areas used in the comparison). Seems to me it is a bit of a success for minimum wage workers in Seattle.

The hours worked and employment may be going up because there is an economic boom in Seattle, but it is being accompanied by a housing and rental market that is increasing at the fastest rate in the nation - meaning that their cost of living is going up at a high clip. <snip>

Well then we better not pay them any more money. I'd hate for them to be able to live in the city where they work.

aa

 

[Loren Pechtel]

http://ritholtz.com/2016/12/seattle-min-wage-update/

The unemployment rate does not capture those who are now working outside the area with the increased minimum wage. Using it as proof of success is therefore unsound.

 

[ronburgundy]

Seattle has been among the 5 fasting growing cities in population for the past 4 consecutive years. And that growth is almost entirely due to migration of young adult workers into the area (rather than birth rates).

That fact is neither a notable cause nor effect of minimum wage hikes, but it does greatly determine how any of the data being presented about the effects of min wage should be interpreted.

 

[laughing dog]

http://ritholtz.com/2016/12/seattle-min-wage-update/

The unemployment rate does not capture those who are now working outside the area with the increased minimum wage. Using it as proof of success is therefore unsound.

The analysis in the link uses the 3 county area unemployment rate. Do you have any data measuring how manypeople who work for the minimum wage have moved out of the 3 county area or commute even further away to support your claim?

 

[Loren Pechtel]

The unemployment rate does not capture those who are now working outside the area with the increased minimum wage. Using it as proof of success is therefore unsound.

The analysis in the link uses the 3 county area unemployment rate. Do you have any data measuring how manypeople who work for the minimum wage have moved out of the 3 county area or commute even further away to support your claim?

The point is you are unable to distinguish workers who are now getting the higher wage from those who are working outside the area with a higher wage.

You are also not able to tell the number whose hours were reduced.

 

[laughing dog]

The analysis in the link uses the 3 county area unemployment rate. Do you have any data measuring how manypeople who work for the minimum wage have moved out of the 3 county area or commute even further away to support your claim?

The point is you are unable to distinguish workers who are now getting the higher wage from those who are working outside the area with a higher wage.

So? No one is saying the minimum wage raise is perfect or that this data proves beyond a shadow of doubt that the raise was the most ideal policy in the history of world, but that it did not entail the doom and gloom that people like you predicted. The real point, as I expected, is that you have not a scintilla of evidence to support your argument.

You are also not able to tell the number whose hours were reduced.

Nor the change in hours worked. Nor the employment or hours worked or wages that would have occurred without the minimum wage increase. And we never will because this is reality not some utopia. Right now, this raise in the minimum wage does not appear to have a noticeable negative effect in this region. Until you come up with some actual evidence to support your claims to the contrary, you are, as usual, simply posting ideologically driven claptrap.

 

[Crazy Eddie]

Funny - I have moved to different areas to work on a very large number of occasions; But have only been laid off or fired a couple of times. Once I even moved half-way around the world, without having been laid off or fired - I quit my job on my own terms.

It's almost as if your suggestion that "the only reason that would happen is if they got laid off/fired" was total bollocks.

People don't willingly take jobs in lower paying areas while continuing to live at the same location.

Sure they do. They just take a job that pays more than they're making NOW.

I was offered a job in a far west suburb where the effective minimum wage is $1.50 lower. It would have meant $5,000 a year more, but I turned it down because my commute and childcare expenses would have eaten up most of the gains. If I was single and childless I would have taken it in a heartbeat.

We understand the world isn't that simple.

Oh, so then you're NOT about to completely oversimplify the relationship between minimum wage and worker compensation in the broader market with a vague and baseless generalization?

Raise the minimum wage and some make more--but some make much, much less because they don't have a job at all.

Ah... never mind.

 

[Crazy Eddie]

The analysis in the link uses the 3 county area unemployment rate. Do you have any data measuring how manypeople who work for the minimum wage have moved out of the 3 county area or commute even further away to support your claim?

The point is you are unable to distinguish workers who are now getting the higher wage from those who are working outside the area with a higher wage.

And so are you. For all you know, NONE of them have changed jobs. This new canard of yours is just a guess that you hope/expect would turn out to be true because it fits your existing preconceptions. But the truth is we have no reason to believe this is actually the case, and one very important reason to believe that it isn't: Compensation rates do not strongly affect hiring decisions.

That should be obvious to anyone who has ever worked for a business. Companies hire more staff when they NEED them, not when they can AFFORD them. If you have too few workers to keep up with your workload, you either hire more workers or raise your prices. Sometimes you do BOTH, knowing that the higher price will be coupled with better quality of service when you have more people to serve your customers.

The point of the minimum wage isn't to force employers to spend more money on EVERY employee, it's to make entry level wages more competitive and therefore increase the demand for services by putting more money in more people's pockets. People who have more money tend to shop more, and people who shop more become customers to people who sell things, and people who sell things and get more customers tend to hire more. It's kind of a vicious cycle of economic growth.

You are also not able to tell the number whose hours were reduced.

Again: neither are YOU. It's entirely possible the number is "zero."

It's equally possible that the reduction in hours entirely compensated for the rising wages, in which case those employees make the same amount of money while working fewer hours and therefore have more time to spend on education, job training and taking care of their families. Why we should interpret that as a bad thing has not yet been explained.