Media clips
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Governing June 28, 2017
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Salon June 28, 2017
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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 -
The Seattle increase is written to phase in over a few years making its full impact unclear. A study out of the University of Washington (UW) found Monday that the increase has already had a negative impact on local employment. The Economic Policy Institute (EPI) countered in a separate study that the findings are questionable. (EPI study mentioned throughout)
Inside Sources June 27, 2017 -
Seattle’s $13 minimum wage has reduced the hours of low-wage workers by 9.4 percent, according to a study released by University of Washington researchers this morning. The study examined the first two hikes in Seattle’s $15 minimum wage law, from $9.47 to $11 in 2015 and to $13 in 2016. The first round had little effect, the research found. But in the second, hours for low-wage workers fell by 3.5 million per quarter. The reduction in hours, paired with a modest 3 percent increase in wages, had a sizable effect on the amount of money workers take home. According to the study, low-wage workers — defined as earning less than $19 per hour — took an average pay cut of $125 per month in 2016. The findings are likely to inflame the partisan debate over minimum wage. The left-leaning Economic Policy Institute already released a lengthy rebuttal, arguing the analysis “suffers from a number of data and methodological problems” that skew the data toward job loss. The authors warn that their findings shouldn’t be used to frame the national debate over minimum wage. They caution that differences in regional economies could produce different results for minimum wage hikes elsewhere.
Politico June 27, 2017 -
Groups supporting a higher minimum wage argue the study is flawed and inaccurate. In general, the University of Washington study finds that a 3% increase in the minimum wage leads to a 1% decline in lower-income employment. But economists at the liberal-leaning Economic Policy Institute say that ratio is so far outside the mainstream findings of other research that it can’t be right. And the study’s authors acknowledge other limitations of their research. Since it relies on data gathered by the state, for instance, it doesn’t reflect what’s going on in the unreported cash economy. And it doesn’t cover contractors, who report wage and employment data differently than what the researchers had access to.
Yahoo Finance June 27, 2017