As cities across the country pushed their minimum wages to untested heights in recent years, some economists began to ask: How high is too high?
Seattle, with its highest-in-the-country minimum wage, may have hit that limit.
In January 2016, Seattle’s minimum wage jumped from $11 an hour to $13 for large employers, the second big increase in less than a year. New research released Monday by a team of economists at the University of Washington suggests the wage hike may have come at a significant cost: The increase led to steep declines in employment for low-wage workers, and a drop in hours for those who kept their jobs. Crucially, the negative impact of lost jobs and hours more than offset the benefits of higher wages — on average, low-wage workers earned $125 per month less because of the higher wage, a small but significant decline.
So, thanks to the increase in the minimum wage in Seattle, these low-income folks just got an average $1,500 cut in their annual earnings. Note, that's the average. Some people, predictably, got fired. $11/hr is a lot better than $0.