Seattle's $15 minimum wage experiment might already be crashing and burning
A 2014 law designed to incrementally raise the minimum wage of Seattle's low-income workers up to $15 an hour has apparently backfired, a study conducted by University of Washington economists concluded. The findings show that low-wage employees actually lost an average of $125 a month under the new model, or about $1,500 a year, due to employers' reduced payrolls and hours.
Most alarmingly, "the paper's conclusions contradict years of research on the minimum wage," The Washington Post reports. "Many past studies, by contrast, have found that the benefits of increases for low-wage workers exceed the costs in terms of reduced employment — often by a factor of four or five to one."
Massachusetts Institute of Technology economist David Autor, who reviewed the paper, said the study strikes him as "likely to influence people" and called the work "very credible." "If I were a Seattle lawmaker, I would be thinking hard about the $15 an hour phase-in," said Autor.
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
Still, the research is in its early stages and has not yet been tested by peer review. But based on the preliminary findings, FiveThirtyEight suggests the Seattle experiment — with the highest minimum wage in the nation, at $13 an hour in 2016 — was possibly a case of being too extreme too quickly.
"The literature shows that moderate minimum wage increases seem to consistently have their intended effects, [but] you have to admit that the increases that we're now contemplating go beyond moderate," said economist Jared Bernstein, of the left-leaning Center on Budget and Policy Priorities. "That doesn't mean, however, that you know what the outcome is going to be. You have to test it, you have to scrutinize it, which is why Seattle is a great test case."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Jeva Lange was the executive editor at TheWeek.com. She formerly served as The Week's deputy editor and culture critic. She is also a contributor to Screen Slate, and her writing has appeared in The New York Daily News, The Awl, Vice, and Gothamist, among other publications. Jeva lives in New York City. Follow her on Twitter.
-
5 Senate-approved cartoons on the Trump confirmation hearings
Cartoons Artists take on non-answers, drunken rhetoric, and more
By The Week US Published
-
The best new cars for 2025
The Week Recommends From family SUVs to luxury all-electrics these are the most hotly anticipated vehicles
By The Week UK Published
-
Jean-Marie Le Pen: rabble-rousing co-founder of the French National Front
In the Spotlight Once called the 'most hated man in France', Le Pen maintained that his ideas were simply 'ahead of their time'
By The Week UK Published
-
US port strike averted with tentative labor deal
Speed Read The strike could have shut down major ports from Texas to Maine
By Peter Weber, The Week US Published
-
Biden expected to block Japanese bid for US Steel
Speed Read The president is blocking the $14 billion acquisition of U.S. Steel by Japan's Nippon Steel, citing national security concerns
By Peter Weber, The Week US Published
-
Judges block $25B Kroger-Albertsons merger
Speed Read The proposed merger between the supermarket giants was stalled when judges overseeing two separate cases blocked the deal
By Peter Weber, The Week US Published
-
Rupert Murdoch loses 'Succession' court battle
Speed Read Murdoch wanted to give full control of his empire to son Lachlan, ensuring Fox News' right-wing editorial slant
By Peter Weber, The Week US Published
-
Bitcoin surges above $100k in post-election rally
Speed Read Investors are betting that the incoming Trump administration will embrace crypto
By Peter Weber, The Week US Published
-
Enron mystery: 'sick joke' or serious revival?
Speed Read 23 years after its bankruptcy filing, the Texas energy firm has announced its resurrection
By Peter Weber, The Week US Published
-
US charges Indian tycoon with bribery, fraud
Speed Read Indian billionaire Gautam Adani has been indicted by US prosecutors for his role in a $265 million scheme to secure solar energy deals
By Peter Weber, The Week US Published
-
Boeing machinists approve contract, end strike
Speed Read The company's largest union approved the new contract offer, ending a seven-week strike
By Peter Weber, The Week US Published