Jonathan Meer writes at National Review Online that a new study questioning the benefits of Seattle’s recent minimum-wage increase faces “misplaced skepticism.”
Policymakers looking for ways to help low-income households have turned to minimum-wage increases in recent years. But a provocative new paper by the Seattle Minimum Wage Study Team at the University of Washington suggests that this may be a deeply counterproductive policy. This study was immediately met with skepticism from left-wing labor activists and several major media outlets, but it is important to understand why this paper is different and worth paying attention to. …
… These estimates suggest that businesses respond to minimum-wage hikes much more strongly than previous research implied, which may have been expected given how much higher (and how localized) this minimum wage is relative to previously studied wage hikes. The impact also took some time to be reflected in the labor market, as predicted by several recent papers examining minimum-wage increases in other contexts.
This paper makes numerous valuable contributions to the economics literature and should give serious pause to minimum-wage advocates and policymakers. Of course, that’s not what’s happening. The mayor of Seattle went as far as commissioning another study, by a team at Berkeley whose findings on the minimum wage are so consistently one-sided that you can set your watch by them. Unsurprisingly, this study finds no effect of the policy, and its release was deliberately timed for several days before the paper by the UW paper came out, in order to muddy the waters.
