Yet, our best estimates find that the Seattle Minimum Wage Ordinance appears to have lowered employment rates of low-wage workers. This negative unintended consequence (which are predicted by some of the existing economic literature) is concerning and needs to be followed closely in future years, because the long-run effects are likely to be greater as businesses and workers have more time to adapt to the ordinance. Finally, we find only modest impacts on earnings. The effects of disemployment appear to be roughly offsetting the gain in hourly wage rates, leaving the earnings for the average low-wage worker unchanged. Of course, we are talking about the average result.
More specifically, we find that median wages for low-wage workers (those earning less than $11 per hour during the 2nd quarter of 2014) rose by $1.18 per hour, and we estimate that the impact of the Ordinance was to increase these workers’ median wage by $0.73 per hour. Further, while these low-wage workers increased their likelihood of being employed relative to prior years, this increase was less than in comparison regions. We estimate that the impact of the Ordinance was a 1.1 percentage point decrease in likelihood of low-wage Seattle workers remaining employed. While these low-wage workers increased their quarterly earnings relative to prior years, the estimated impact of the Ordinance on earnings is small and sensitive to the choice of comparison region. Finally, for those who kept their job, the Ordinance appears to have improved wages and earnings, but decreased their likelihood of being employed in Seattle relative other parts of the state of Washington.
Still not convinced? How about a recent report from the Federal Reserve Bank of San Francisco that finds that "higher minimum wage results in some job loss for the least-skilled workers—with possibly larger adverse effects than earlier research suggested."