Choose your own Seattle minimum-wage study adventure!
Do you love the minimum-wage hike? Then you'll love the study from UC Berkeley's Center on Wage and Employment Dynamics
that says Seattle's minimum wage hike from $11 to $13 an hour helped food-service workers make more money, without harming hours or employment.
On the other hand, do you hate the minimum-wage
UW Evans School
Jacob Vigdor, director of the University of Washington's minimum wage study team.
hike? Then you'll love the study from the University of Washington
that uses government payroll data to find that because of a reduction of hours, the implementation of the minimum wage actually reduced
wages for workers making $19 an hour or less by an average of $125 per month. The hours they lost erased the gains they made with pay increases.
The resulting disparity in conclusions has catalyzed a wonk war
, with those on the right and the left eager to undercut the conclusions of one study or the other.
The UW study made headlines precisely because it seemed to contradict the vast body of research showing little to no effect from prior wage hikes. On the other hand, most of those studies were looking at hikes much less dramatic than Seattle's.
So yesterday, the Inlander
spoke with Jacob Vigdor, the UW study's director
, about the strengths and the weaknesses of the UW study, and what it told us about Seattle's divergent restaurant scene.
The big takeaway: The UW study produced different results because it's providing different answers to a different set of questions with different sets of data.
"The issue that a lot of previous studies
have faced is you don’t actually get to see what people’s wage rates are," says Vigdor, a professor at the UW's Evans School of Public Policy & Governance and former faculty member at Duke University's Sanford School of Public Policy.
"You have to pick something else … You pick a sector of the workforce that you think the work being done is low-wage work."
"The issue that a lot of previous studies have faced is you don’t actually get to see what people’s wage rates are," Vigdor says.
As a result, many previous studies look at just teenagers, or just the restaurant industry.
That's what the Berkeley study, released last week, did. It found that pay for food-service workers increased increased by about 1 percent
in the food service industry, and 2.3 percent in limited-service restaurants (think fast-food joints).
But this approach has two weaknesses: First, only about 30 percent of the low-wage work in Seattle is in the restaurant industry, Vigdor says, while the rest is in other areas. Think department stores, movie theaters, bowling alleys, child care. Focusing just on the restaurants misses all these other types of low-wage workers in industries facing different economic winds.
Second, you end up inadvertently including workers who aren't
low-wage workers — who are actually getting paid much better salaries — and lumping them in with minimum-wage employees.