Seattle’s “moral” wage hurts poor workers, just as economics-based economics warned

Background: news report of a recent protest for a $15/hr. minimum wage in North Carolina.

Traffic at standstill now along N Roxboro. @ncnaacp leading #FightFor15 march #ABC11 pic.twitter.com/NXWQ3pel3y
— Elaina Athans (@AthansABC11) November 29, 2016

The negative impacts of the minimum wage is one of the items about which economists are in greatest agreement. The knowledge that there are net negative effects is clearly within the mainstream of economic thinking on the minimum wage.

Furthermore, those negative impacts aren’t randomly distributed. The disemployed tend to be the least skilledthe poorest, the least educated. That is, the ones who most need the work.

Nevertheless, more than doubling the minimum wage to $15/hr. has lately become an agenda item from Democrats, demagogues, and their allies in media, arguing on the basis of “faith and morality” that it would “lift everyone.”

(Arguing in public, at least. Recall that liberal advocates warned Secretary Hillary Clinton behind the scenes that a big hike in the minimum wage would be bad.)

This month a new National Bureau of Economic Research study has estimated effects of the second part of Seattle’s phase-in of its plan to hike the city minimum wage to $15/hour. This raised the wage to $13/hr.

Researchers found the following consequences for that minimum-wage increase:

  • total amount of low-wage jobs fell by over 5,000
  • hours worked in low-wage jobs fell off at a rate three times greater than wages increased
  • total pay for low-wage jobs fell
  • low-wage workers earned $125 per month less — i.e., $1,500 per year less

Those consequences are entirely consistent with established economic research, mainstream economics, and common sense.

Those consequences furthermore warn against any foolish attempt to duplicate Seattle’s experiment in North Carolina. The results here would be devastating, as my recent report “Minimum Wage Hikes Hurt The Very People They’re Supposed to Help” made clear.

NC $15 min wage workers

For more information, follow the “minimum wage” tag on The Locker Room. Recent entries include a Harvard study that finds that raising the minimum wage caused more restaurant closures and an Economic Policies Institute study that the city of St. Louis raising the minimum wage to $11/hr. would cause job losses, especially among women, young workers, the undereducated, and mostly in the food, leisure, and service industries.

Jon Sanders / Director of Regulatory Studies

Jon Sanders studies regulatory policy, a veritable kudzu of invasive government and unintended consequences. As director of regulatory studies at the John Locke Foundation, Jo...

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