Tuesday, August 8, 2017

What Does the Seattle Minimum Wage Study Teach Us Followup

 On August 5th, I wrote a post on the Seattle minimum wage study data and methodological problems in response to a editorial in the Springfield, Illinois State Journal-Register newspaper.

Here is a new critical analysis published at EconoFact entitled: "What Does the Seattle Experience
Teach Us About Minimum Wages?".  They pretty much cover the same ground I did.  Their summation, after detailed criticism, is: "It is an important and unresolved question whether minimum wages at the levels that will be reached in many cities and states in coming years—and that have been proposed at the federal level—will lead to meaningful reductions in employment, even where the evidence points to few or no such effects for lower minimum wages. Unfortunately, the Seattle study does not provide useful evidence on this question. We cannot be confident that it has uncovered the causal effect of the Seattle minimum wage increase, which took effect in an economy that was already booming. Moreover, its estimates are uninformative about the effects of higher minimum wages than have been studied in past research, as they pertain primarily to workers facing minimum wages well below $13 per hour. The upshot is that at present the jury is still out: we simply do not know whether the $13 minimum wage in Seattle helped or hurt workers. The literature to date suggests small negative effects that are more than offset by the benefits of higher wages. Those results may not generalize to higher minimum wages, however, so more evidence will be needed to support any strong conclusion."

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