One of the selected studies, which received strong support from our review panel, looks at the effects of the recent minimum wage increase in Seattle. In 2014, the city passed an ordinance to increase the minimum wage from $9 to $15 per hour. Professor Jacob Vigdor and his colleagues at the University of Washington (UW) conducted an analysis of the 18-month period after the ordinance went into effect and recently released their findings, which included the following:

… (the) 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. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016.

Prof. Vigdor’s study is more rigorous and comprehensive than any other completed to date, due in part to the fact that he and his team had unprecedented access to payroll records. The records covered a broad range of low-wage workers, not just teens and those who work in restaurants. With access to the payroll data, the researchers were able to see both employees’ earnings and the number of hours they worked. After studying that information, the UW team didn’t find any negative effects associated with an $11 per hour minimum wage. However, there was a tipping point. When the wage increased to $13, employers cut hours, meaning that even though workers were earning more per hour, they suffered a net loss. In addition, Prof. Vigdor’s study is one of the first to examine the effects of a substantial minimum wage increase. In fact, before this summer, no one had studied a wage over $12.

But although the UW study makes significant contributions to our understanding of the minimum wage, questions remain, and the study does have limitations. For one, it doesn’t involve multi-site employers, because UW researchers were not able to tell whether the workers for those companies were employed inside or outside the city limits. In addition, we can think of many reasons why the Seattle market today is idiosyncratic—high real estate costs, a relatively high prior minimum wage, and a robust economy.  These factors may very well preclude us from applying this work to other jurisdictions.

In short, as is true of many policies related to economic opportunity, the jury is still out on the minimum wage. But we are inching toward some answers. Prof. Vigdor’s study, along with many other high-quality research projects currently underway, will give us a better understanding of how wage policy affects workers and communities. We hope this work will further the spirited debate taking place across the country, and ultimately provide governments with reliable information that they can use when setting their minimum wage.

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