A new study this month raised alarm bells with its conclusion that Seattle’s new minimum wage law, currently on track to raise wages to $15/hour for all workers, is not having a net positive impact for low-wage workers. The study found that although the hourly wage for the lowest paid workers increased, the number of hours offered to those workers decreased by more, negatively impacting net income.
The study was quickly critiqued from many angles. The methodology excluded up to 40% of the workforce. It also failed to fully account for the economic climate in Seattle. In the previous week, another study came out with opposing results and a more widely accepted methodology, but was overshadowed by many news outlets.
There are some excellent comparisons of the two studies to help understand the details involved. But the overall point that is that it is a mistake to take one flawed study and conclude that raising the minimum wage harms workers. Using any study to justify stagnating wages is an even bigger mistake.
The real lesson is that we need to raise the federal minimum wage. This would put all businesses on an even playing field so that business owners in one city are not competing against businesses in other cities with lower wages. It will also ensure all workers are paid fairly for the work they do and have more money to infuse throughout the economy. There will be no fear (real or imagined) that higher-paid workers in one city will spend money in neighboring cities where labor costs and prices are lower. The field will be level.
We can also further level the playing field by continuing to advocate for complementary policies, such as affordable and universal healthcare, which takes some financial burden off both working families and small-scale businesses.
It is always worth remembering that minimum wage earners are disproportionately women and people of color. A higher minimum wage will not undo a system of racial and gender injustice, but keeping minimum wages at poverty wages only contributes to an unjust economic system that treats the most marginalized among us unfairly.
The Fight for $15 has gained unprecedented momentum over the last few years and will not be slowed by one flawed study.