Published On: Tue, Jun 27th, 2017

Study Finds Minimum Wage Hike May Hurt Lowest-Paid Workers

Workers in Seattle may soon have a harder time getting their resumes through to recruiters.

A new study out of the University of Washington may upend the minimum wage fight in Seattle. The highly-anticipated study, released Monday, comes as Los Angeles moves toward raising its  minimum wage for large businesses to $12 from $10.50 starting July 1.

The study found that the number of jobs and hours worked declined among Seattle’s lowest-paid workers after the city raised the minimum wage to $13 last year. Jobs and hours worked declined faster for those in Seattle compared to those in surrounding areas where the minimum wage rate remained the same.

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The study contradicts previous findings, which showed higher minimum wage having little impact on employment, the LA Times reports. Some economists fear the results are a sign that minimum wage hikes in California, New York and Washington state may hurt workers in the long run.

Seattle has one of the highest minimum wage rates in the country.

Independent economists say the University of Washington study is ideal for measuring the results of minimum wage hikes, as the researchers looked specifically at the effects on low wage workers.

Washington is one of a handful of states that tracks the number of hours employees work. Researchers were able to pinpoint which workers were paid the lowest wages and how their employment opportunities changed.

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Previous studies focused on teenage and restaurant workers, both of which earn lower paychecks.

Economists argue that the study could change people’s beliefs and cause legislators to move cautiously when raising minimum wage.

Still, Seattle is a unique city in that it started with a high wage floor. The city is headed toward $15/hour minimum wage for all city workers by 2021. In other states, where the minimum wage is $9, there is no indication that raising the rate would cause significant harm to workers.

Economists saw signs of trouble when the city raised its minimum wage from $11 to $13 an hour, a year after the hike from $9.47 to $11.

Once the minimum wage increased to $13 an hour, low-wage workers earning less than $19 an hour saw a 9% decrease in their hours between 2014 and 2016 compared to workers in the surrounding area. Low-wage jobs overall fell by 7% compared to nearby areas where the minimum wage hadn’t changed.

Some economists say the results of the study may not necessarily be negative. They argue that the city’s booming job market may have driven away lower-paying positions. The city’s unemployment rate reached a low of 3.2% in May.

Author: Jacob Maslow

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