General Discussion
In reply to the discussion: A nationwide $15 dollar minimum wage is harmful and dumb. We should advocate wage subsidies and UBI. [View all]pnwmom
(110,176 posts)isn't some trivial flaw in the study. And counting as a job loss an employee who switches from a job at one location in a chain to another -- or who gets an even higher paying job -- is absurd.
From the Economic Policy Institute
http://www.epi.org/publication/the-high-road-seattle-labor-market-and-the-effects-of-the-minimum-wage-increase-data-limitations-and-methodological-problems-bias-new-analysis-of-seattles-minimum-wage-incr/
Summary
A team of researchers at the University of Washington has released an analysis of the economic impacts of the 2015 and 2016 increases in the Seattle minimum wage. The study, Jardim et al. (2017), looks at the first two stages of a phased-in set of increases that will eventually take the minimum wage in the city to $15.00 per hour. The authors of the study argue that they find large job losses associated with these first two rounds of increases, in which the minimum wage for most workers rose from $9.47 per hour to $11.00 per hour in April 2015 and then to $13.00 per hour in January 2016.1
The authors analysis, however, 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. One initial indicator of these problems is that the estimated employment losses in the Seattle study lie far outside even those generally suggested by mainstream critics of the minimum wage (see, for example, Neumark and Wascher [2008])as the authors themselves acknowledge.
In this report, we describe the most important shortcomings in the new analysis and make suggestions for how the researchers can attempt to correct for these problems in future iterations of their long-term study of the Seattle minimum wage. These shortcomings include:
The employment responses estimated by the authors are well outside the bounds of most published research, and indeed all of the research cited by the authors implies much smaller and even no employment changes in response to wage increases similar to those experienced so far in Seattle. After accounting for Seattles much higher wage structure, the increase of the minimum wage to $13.00 in the city is within the range of increases that other research has found to have had little to no effect on employment.
The study implausibly finds employment changes due to the minimum wage in parts of the labor market where there should have be none. The studys own estimates inaccurately imply the minimum wage caused large gains in the number of jobs paying above $19.00 per hour and in the number of hours worked in those jobseven though those jobs are well above the wage range where the $13.00 minimum wage should be having measurable effects. These spurious results strongly suggest that the studys methodology fails to account properly for the booming Seattle labor market during the period being studieda labor market that has been shifting employment from lower-paid to higher-paid jobs.
The study excludes an important group of workers, representing roughly 40 percent of the workforce: those working for employers with businesses in multiple locations. By omitting all multi-location businesses, such as chains, in Seattle, the authors bias their results toward showing job loss if there has been a shift in employment from small, single-location establishments toward larger firms with multiple locations.
SNIP