Business Review Board / June 27, 2017

Surprise! Seattle’s Minimum Wage Charade Is Making People Poorer

Recent study shows that drastic minimum wage increases are leading to lower incomes among low-wage earners.

As the old expression states, the road to hell is paved with good intentions. In 2014, Seattle decided to lead the way “forward” in the attempt to impose the leftist utopian dream of creating a “livable” minimum wage for all. Largely ignoring sound warnings from seasoned economists, Seattle pressed on with its crusade, passing a progressive increase to the minimum wage with the goal of eventually reaching $15 per hour by 2017 and 2019 respectively for large and small businesses. So has Seattle been able to defy all conventional economic wisdom and raise a greater number of individuals out of poverty with its mandatory minimum wage hike?

A recently released study from the University of Washington appears to be throwing a well-deserved bucket of cold water on Seattle’s pipe dream. Researchers found that low-income workers saw their overall pay decrease, as companies either cut hours or cut the number of employees. The report states, “The lost income associated with the hours reductions exceeds the gain [in hourly rates]. The average low-wage employee was paid $1,897 per month. The reduction in hours cost the average employee $179 per month, while the wage increase would recoup only $54 of this loss, leaving a net loss of $125 per month (6.6%), which is sizable for a low-wage worker.”

Seattle is the first city to pass the mandatory $15 minimum wage, but certainly not the last as the cities of Los Angeles, New York, DC and Boston have passed similar legislation. Hopefully, Seattle acts as the canary in the coal mine, warning other municipalities away from a disastrous policy. As America Rising Squared spokesman Jeremy Adler states, “This important study ought to be a big wake-up call that the ‘Fight for $15’ minimum wage effort is actually hurting those they say they want to help — reducing incomes and eliminating economic opportunities for low-income Americans who need them most.”

Unfortunately, too many Democrats have so invested themselves in the belief that it is the role of government to provide for people’s needs that even studies like this, which clearly demonstrate the ill effects of leftist economic policy, will not promote a change of direction or ideology. As a result, the unemployment lines in leftist controlled cities like Seattle will only grow longer.

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