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A new study based in Seattle, one of the first jurisdictions to adopt a trajectory of up to $ 15 an hour, offers a glimpse beneath the surface. The economic repercussions of the wave of minimum wage increases are difficult to measure accurately, making the Seattle experience an important test case.
Congress has not increased the federal minimum wage since 2009. Instead, local politicians and voters have led the way in recent years. Ten major cities and seven states have adopted a minimum wage of between $ 12 and $ 15 until August.
In addition, the staff turnover rate has decreased, which, according to the authors, suggests that employers have made every effort to maintain the most productive workforce as wages increase. This is an advantage for existing workers, but potentially an obstacle for inexperienced or new workers who are trying to get that first line on their resume.
Indeed, the study showed that fewer new workers entered the low-wage job market in Seattle compared to the rest of Washington. "The minimum wage ordinance in Seattle seems to have provided higher wages to experienced workers at the cost of a reduced opportunity for the inexperienced," wrote the study's authors.
The authors noted that young workers whose minimum wage is higher than jobs in the fast food sector or other low-wage sectors are best placed to get the training they would need to find better jobs.. At the same time, higher minimum wages help make cashier, dishwasher or janitor work a viable long-term job. for those who can not climb the career ladder.
Critics say studies have exaggerated the loss of new workers
In response, the University of Washington team said that even counting new workers earning $ 19 an hour, Seattle continued to see a drop in its rate of new entrants compared to the rest of the state.
"Recent studies of restaurant workers have reached a consensus: they find little or no detectable negative effects of the minimum wage on employment in catering," the authors wrote.
States lead the way and Congress can follow
The findings come as the political calculation around the minimum wage is changing, with growing inequality and rising housing costs nibbling more and more the wages of an average worker. Amazon's plan to increase its minimum wage to $ 15 on November 1 adds to business efforts to raise wages nationwide.
Meanwhile, state and local government efforts are continuing. This year, voting initiatives have failed in North Dakota and Michigan. But the Massachusetts governor, Republican Charlie Baker, enacted a law on a minimum wage of $ 15. The unions obtained increases of up to $ 19 for port and airport workers. Voters in Arkansas and Missouri will decide to increase polling day more modestly.
Although the increase in local minimum wages has so far had beneficial effects for workers, the researchers point out that all recent studies have taken place in the midst of economic expansion, especially in the hottest urban areas. . For example, bringing a small New Mexico city to the same level may not be as positive.
And even some Seattle minimum wage advocates worry about the future.
"Are we making decisions that escape us because of the economic boom?" asked Ryan Calkins, a Seattle Harbor Commissioner, who until 2016 headed an import and distribution company. He said putting more money into the hands of low-wage workers was good for business, but that higher labor costs may not always be as easy to absorb. "What happens when things get tight when the economic cycle slows down?"
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