Think how much regulatory red tape there must be for that to be a better way to do things! There is the point at which laws designed to protect people end up hurting them. The Seattle minimum wage experiment is a good example: http://marginalrevolution.com/marginalrevolution/2017/06/sea... (https://evans.uw.edu/sites/default/files/NBER%20Working%20Pa...)
> – The numbers of hours worked by low-wage workers fell by 3.5 million hours per quarter. This was reflected both in thousands of job losses and reductions in hours worked by those who retained their jobs. > > – The losses were so dramatic that this increase “reduced income paid to low-wage employees of single-location Seattle businesses by roughly $120 million on an annual basis.” On average, low-wage workers lost $125 per month. The minimum wage has always been a lousy income transfer program, but at this level you’d come out ahead just setting a hundred million dollars a year on fire. And that’s before we get into who kept vs lost their jobs.
When laws with one goal achieve the exact opposite, we need to rethink the laws. Unfortunately, pyrrhic victories are rather common in politics.
While I don't doubt the veracity of some of the conclusions (more cost per hour means hours get cut) there does seem to be a few what I'd consider "contortions" to get the desired result. I say "desired result" because sometimes people who fund these things, yes, even (especially?) at universities have compelling interest.
For instance, they exclude all "multi-site" businesses from the study (Dominos for instance so study doesn't even apply to author in the first place). One has to wonder what the results would have looked like had they not done that.
Not arguing for against state/city minimum wages, don't have an opinion either way. Just skeptical.
WaPo is being contradicted by a recent report from the National Bureau of Economic Research...
"Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016"
Multi-site businesses can choose to report on a per-site basis (and it sounds like many businesses actually do this) or on an overall basis and the analysis includes those that report on a per site basis. So it may or may not include those particular businesses.
In addition: "we exclude observations with calculated wages below $9 or above $500 in 2015 dollars. We also exclude observations reporting under 10 or over 1,000 hours worked in a calendar quarter. These restrictions exclude 6.7% of all job/quarter observations."
Overall, as others mentioned in this thread already, they included 89.2% of firms and 62.1% of employees.
They mention survey data that suggests that the businesses they exclude are more likely to reduce jobs in Seattle than the ones that they include.
From the study via non-paywalled link posted by andrewla below: https://evans.uw.edu/sites/default/files/NBER%20Working%20Pa...
Thanks -- that was enough information to lead me to , which is one of the author's PDF of the paper to avoid the paywall.
Here's the initial justification for the $19 bucket:
> While the preponderance of evidence suggests that a low-wage threshold slightly above the statutory minimum poses little risk of miscoding jobs as lost when they have really been promoted to higher wage levels, in our preferred specifications we report findings based on a relatively conservative $19 threshold. The $19 threshold is roughly twice the initial value of the minimum wage, a level beyond which cascading effects are less likely to occur.
And here's the payroll falling statement (from the abstract):
> Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016.
Table 3 contains more of the breakdown, but does not refute my point -- the assumption about the threshold and mobility around that is not obvious, and the "reduction in payroll" only makes sense if we restrict the payroll changes to just $19 and hour or lower, the exact thing that I am pointing out as potentially a bad assumption. Under the alternative model, payroll reduced for that group of jobs (less that $19/hour) because that payroll was still spent (potentially on the same people) but at a higher wage class.