Well-meaning as they may be, advocates of ever-increasing minimum wages can’t overturn the laws of economics by wishing them away. Seattle is learning that lesson now, and their new minimum wage law hasn’t even topped out yet. Excerpt:
Three years ago, the city of Seattle voted to raise its minimum wage to $15 per hour, in the name of human decency and basic fairness. The minimum wage went from $9.47 to $11 per hour in 2015, and then to $13 per hour in 2016. Similar policies have been enacted or considered in countless other cities.
Now what The Washington Post calls a “very credible” study from researchers at the University of Washington’s School of Public Policy and Governance finds that the critics were right.
Specifically, the study, published as a working paper by the National Bureau of Economic Research, concludes
…the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent…. The minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016.
All told, that’s the equivalent of 6,317 full-time jobs eliminated because of the latest hike.
Over the past few years, a lot of people—including Sen. Bernie Sanders (I-Vt.)—have argued that labor costs are different than other costs and that elasticity of demand isn’t that great when it comes to low-wage workers. But many of the studies that downplay the effect of minimum-wage hikes focus only on teenagers or fast-food workers. The University of Washington study looks at low-skilled, low-wage workers “spanning all industries and worker demographics.”
Seattle liberals are undoubtedly shocked – shocked, I tell you – to discover that pricing the low-skilled out of the market results in fewer jobs for the low-skilled!
But there’s an issue beyond the economic one involved here; there is one of principle, and it is this:
The first employment contract I ever entered into was negotiated when I was ten years old. The parties to that negotiation were me and my grandfather. I had a brand new pellet gun, and Grandpa offered my ten cents for every dead rat I could produce from the area around his corncrib. I spent much of that weekend sitting on the hulk of an old tractor near the corncrib, and I earned about a dollar and a half – not a bad weekend’s haul for a ten year old boy in 1971.
I wonder how many laws that arrangement would be breaking now, forty-five years later?