The Penny Hoarder
June 29, 2017
Washington Post
June 28, 2017
But researchers at the left-leaning think tank the Economic Policy Institute have found some major issues with the UW paper. First off, because of data limitations, the study excludes businesses with multiple locations, such as fast-food chains—that means that 40 percent of Seattle’s workforce is not included at all. Ben Zipperer, an economist at EPI, says that it is “a serious data problem” that “potentially biases their estimates toward finding job loss even when there may have been none.” Take, for example, if employment had shifted in this time period from single establishment firms to multi-location firms (a likely scenario)—the UW study would only count these changes as job losses, without including the job gains at multi-location firms.
The New Republic
June 27, 2017
“There is a large body of research that shows that modest increases in the minimum wage boost wages for low income workers without causing job loss, and nothing in the UW study suggests we should revise those conclusions,” the Economic Policy Institute’s Ben Zipperer said in a statement.
CNN Money
June 27, 2017
Given the University of Washington’s diverging results, researchers on the left argued for caution in interpreting them and applying them to policymaking. “The authors’ estimated employment effects stand as outliers in a large body of research on the employment effects of the minimum wage,” wrote Ben Zipperer and John Schmitt of the Economic Policy Institute, a left-of-center think tank based in Washington, D.C. “Rather than constituting an important new contribution to the research in this area, the findings are best seen as raising concerns about possible problems with their underlying data and statistical techniques.” The University of Washington study excluded workers at companies with multiple locations—meaning McDonald’s, Starbucks, and the other big and small chains that account for about 40 percent of the overall workforce and a huge number of minimum-wage jobs—narrowing the scope of the results, Zipperer and Schmitt noted. The study also seemed to imply that the minimum-wage hike caused a boom in high-wage employment, a seemingly impossible feat. (It seems unlikely that a business would have reacted to a pay hike for a minimum-wage worker by paying many of them $19 an hour, after all.) It in addition had no way to tell if Seattle’s employers were switching to contractors, as opposed to employees, to avoid some provisions of the minimum-wage law; if that had happened, those workers would have dropped out of the data set.
The Atlantic
June 27, 2017
As FiveThirtyEight also reported, the University of Washington researchers had to exclude many multilocation businesses, which means their sample could leave out major low-wage employers such as fast-food chains. Think tank Economic Policy Institute estimates that 40 percent of employees work at multilocation businesses, meaning the University of Washington researchers left out a huge segment of the economy.
Next City
June 27, 2017
New Seattle Study Suggests Ideal Minimum Wage of About $12
Mother Jones/Kevin Drum
UPDATE: EPI has released a critique of the new UW study: “The authors’ analysis…suffers from a number of data and methodological problems that bias the study in the direction of finding job loss, even where there may have been no job loss at all.” I won’t try to arbitrate this, since I don’t have the econometric chops to do it. Eventually this will all get sorted out, but it’s likely to take a few years.
Mother Jones
June 27, 2017