Seattle’s Minimum Wage Experience A Cautionary Tale
When the price of a thing goes up, people buy less of it. We experience this every day when buying groceries, gasoline or anything else. So why are people surprised when it applies to the labor market?
We at the Show-Me Institute have written about the negative effect of increases to the minimum wage for some time. (You can read some of it here and here and here.) We were saddened but not surprised to learn that in Seattle, the increased minimum wage is decreasing employment while increasing unemployment and joblessness. One author wrote,
Early evidence from the Bureau of Labor Statistics (BLS) on Seattle’s monthly employment, the number of unemployed workers, and the city’s unemployment rate through December 2015 suggest that since last April when the first minimum wage hike took effect: a) the city’s employment has fallen by more than 11,000, b) the number of unemployed workers has risen by nearly 5,000, and c) the city’s jobless rate has increased by more than 1 percentage point (all based on BLS’s “not seasonally adjusted basis”). Those figures are based on employment data for the city of Seattle only (not the Seattle MSA or MD), and are available from the BLS website here (data are “not seasonally adjusted”).
Especially relevant to Kansas City is that the data also shows the suburbs of Seattle, where no wage hike took effect, have seen an increase in jobs. Had Kansas City chosen the same path, we likely would have seen the same results: jobs moving outside the city to where labor was cheaper.
