14 ms·

Seattle: Highest Minimum Wage, Lowest Unemployment Rate

150 points by MaysonL 10y ago

kingmanaz 10y ago
...Whitest major US city.
- deleted 10y ago
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- arcanus 10y ago
  Several of the booming tech cities are. Austin is terrible in terms of diversity. Portland too.
  - aaron-lebo 10y ago
    Austin is majority minority. ~48 white, ~35 hispanic, ~8 african american, ~6 asian
    - arcanus 10y ago
      http://www.mystatesman.com/news/news/opinion/as-austins-black-population-falls-a-question-of-re/nrTd4/ http://www.mystatesman.com/news/news/opinion/as-austins-blac... I don't see how one can argue Austin is not pushing out minorities.
      - aaron-lebo 10y ago
        You stated that Austin has horrible diversity, which is not true statistically. Having read the article, it doesn't say anything about how Austin is "pushing out minorities". I won’t dwell on Tang and Falola’s results, which the American-Statesman’s Dan Zehr covered last week, other than to note that a majority of African-Americans — 56 percent — said they left Austin because they no longer could afford to live in the city. Many said they would move back if they could. Furthermore, from the Zehr piece mentioned there: Despite those indications, fewer than half the residents surveyed said they felt “pushed out” of the city, according to the report. The people being "pushed out" say they aren't being pushed out. You are claiming the exact opposite. Did you read the articles? They can't afford it. If you are familiar with Austin this is a problem for all residents - housing prices have shot up because there is so much demand. It's not a minority issue. Yes, they are disproportionately affected, but the city is not targeting them. Ask any resident of Austin that's been there before 2005 and they'll tell you the same thing. The city is having trouble with massive growth - ironically much of it is from West coasters.
        thaumasiotes 10y ago
        > If you are familiar with Austin this is a problem for all residents - housing prices have shot up because there is so much demand. It's not a minority issue. If you're familiar with Austin, how much more demand for housing there is there compared to demand for housing in Dallas? How is that difference in demand, if any, reflected in pricing? Austin is about as clear a case as you can get of pricing shooting up in response to extremely average levels of demand combined with severe supply restrictions.
        aaron-lebo 10y ago
        Prices have certainly rose in Dallas, but not to the same extent, probably because Dallas is a larger city and can absorb the growth better. From wiki: Dallas 2000 1,188,580 18.0% 2010 1,197,816 0.8% 2015 1,300,092 8.5% Austin 2000 656,562 41.0% 2010 790,390 20.4% 2015 931,830 17.9% That's pretty substantial growth. DFW experienced similar growth in the 90s and it has taken 20 years of building for infrastructure to catch up. Edit: Just as a comparison, here's Seattle: 2000 563,374 9.1% 2010 608,660 8.0% 2015 684,451 12.5%
- colmvp 10y ago
  14% Asian, which is certainly above the national average.
  - nerdponx 10y ago
    How about "least brown" then?
  - kelukelugames 10y ago
    The 69.5% white is above the average for major US cities too.
- curtis 10y ago
  I've been unable to find a good citable ranking of major cities by percentage of white population. But I don't think this is right. Here's what Wikipedia has to say about the demography of Seattle in 2010 [1]: According to the 2010 United States Census, Seattle had a population of 608,660 with a racial and ethnic composition as follows: White: 69.5% (Non-Hispanic Whites: 66.3%) Asian: 13.8% (4.1% Chinese, 2.6% Filipino, 2.2% Vietnamese, 1.3% Japanese, 1.1% Korean, 0.8% Indian, 0.3% Cambodian, 0.3% Laotian, 0.2% Pakistanis, 0.2% Indonesian, 0.2% Thai) Black or African American: 7.9% Hispanic or Latino (of any race): 9.0% (4.0% Mexican, 2.3% Puerto Rican, 1.3% Colombian, 0.2% Guatemalan, 0.2% Salvadoran, 0.2% Cuban) American Indian and Alaska Native: 0.8% Native Hawaiian and Other Pacific Islander: 0.4% Other race: 2.4% Two or more races: 5.1% [1] https://en.wikipedia.org/wiki/Demographics_of_Seattle#Ethnic_groups https://en.wikipedia.org/wiki/Demographics_of_Seattle#Ethnic...
  - kingmanaz 10y ago
    From July 2016: "Portland is the whitest big city in America, with a population that is 72.2 percent white and only 6.3 percent African American."[1] [1] http://www.theatlantic.com/business/archive/2016/07/racist-history-portland/492035/ http://www.theatlantic.com/business/archive/2016/07/racist-h...
    - deleted 10y ago
      [deleted]
- chrismcb 10y ago
  I'm trying to understand what this statement is implying. It's it saying Seattle is booming because it is mostly white? Is it saying Seattle can absorb a higher minimum wage because it is mostly white? I can I'm trying to understand what does the diversity (or lack of) have to do with the financial well being of the entire city?
- sctb 10y ago
  The guidelines ask us specifically not to do this (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html): > Please avoid introducing classic flamewar topics unless you have something genuinely new to say about them. In this case not only have you said nothing new about the topic, but you've said nothing at all. That's not what this site is for.
pg_is_a_butt 10y ago
... highest suicide and drug addiction rates
sytse 10y ago
Correlation is not causation (fighting urge to post XKCD comic). "Unemployment fell, most recently to less than 4 percent, more than a full percentage point lower than the national rate." The fall can be explained by an improving economy. Unemployment was 4.2% on Dec. 31, 2013 https://ycharts.com/indicators/seattle_wa_unemployment_rate https://ycharts.com/indicators/seattle_wa_unemployment_rate National rate was 6.7% at that time. So the difference between Seattle and national has been reduced, they are relatively worse off after introducing a higher minimum wage. EDIT Can't resist anymore https://xkcd.com/552/ https://xkcd.com/552/
- gizmo686 10y ago
  "Correlation doesn't imply causation, but it does waggle its eyebrows suggestively and gesture furtively while mouthing 'look over there'." [0] [0] https://xkcd.com/552/ https://xkcd.com/552/ (alt text)
- danarlow 10y ago
  True, but it pretty definitively refutes the hypothesis that raising the minimum wage to $15 would dramatically increase unemployment in any reasonable setting. That is an important result. Now can have a discussion about the costs and benefits without the fear mongering. Also, here's the full article this blog is quoting: https://www.bloomberg.com/view/articles/2016-10-21/doomsayers-keep-getting-it-wrong-on-higher-minimum-wages https://www.bloomberg.com/view/articles/2016-10-21/doomsayer...
  - icebraining 10y ago
    it pretty definitively refutes the hypothesis that raising the minimum wage to $15 would dramatically increase unemployment How so, if Seattle doesn't have a $15/h minimum wage? It'll only take effect in 2017, and even then, only for large employers that don't pay medical benefits. Under this law, the $15 wage will only be universal in 2021: http://murray.seattle.gov/minimumwage/ http://murray.seattle.gov/minimumwage/
- jseliger 10y ago
  Yes. Seattle also has an incredibly strong economy and (sadly) very tight housing policy: http://jakeseliger.com/2015/09/24/do-millennials-have-a-future-in-seattle-do-millennials-have-a-future-in-any-superstar-cities/ http://jakeseliger.com/2015/09/24/do-millennials-have-a-futu... that likely inhibits low-wage workers from living (or moving) there at all. In the meantime, many Texas cities: http://time.com/80005/why-texas-is-our-future http://time.com/80005/why-texas-is-our-future are building tons of affordable housing, even as superficially liberal cities like Seattle legislate it out of existence.
awinter-py 10y ago
If you assume that (a) most manufacturing has moved to cheap-labor countries and (b) rent is a more important input than labor for restaurants / starbucks, then it's not surprising that raising the wage floor doesn't hurt employment. The wage floor imposed by cost of living is already in effect in most major cities. A bolder move would be to impose a tariff on goods and services that use sub minimum wage labor.
deleted 10y ago
[deleted]
terravion 10y ago
If you click on the link to Bloomberg you can read the conclusion: "Some time ago, I suggested that we would eventually learn whether higher minimum wages were going to kill jobs. The early data is in, and so far it doesn’t look like they do." This seems like an awfully broad conclusion to draw. It is indisputable that minimum wage kills or exports some jobs (I know this is a fact because my company is planning to add fewer low wage employees and contractors in our local area based largely on minimum wage changes). The question is whether the people who benefit from the supply restriction (people in low, but not minimum wage jobs) benefit and then spend enough to cancel out the aggregate cost of the distortion. It may be possible that in Seattle's unique situation this was/is true, but even this conclusion seems like a "politically motivated economic analysis, this was what the [pr]opponents hoped would happen because it fit with way they think world should work." One of the questions that these pieces skirt around is how inefficient is the "unregulated" labor market? Clearly some intervention in the labor market, like banning non-competes, makes is closer to efficient, but the question is what inefficiency is the minimum wage solving, and what is it creating?
- NotSammyHagar 10y ago
  It is also indisputable that increasing the minimum wage puts more money into the economy, it's a clear stimulation. And our economy to a large extent is dependent on consumer spending. The increase in spending, vs the fewer jobs with higher minimum wags - that's the complicated question.
  - BenoitEssiambre 10y ago
    You dispute yourself what you call indisputable in your own comment! Fewer jobs means potentially less money in the economy (and theory says that in most cases, more money is lost from fewer jobs than gained from higher pay).
    - michaelmrose 10y ago
      Employers at burgers Inc hire enough people to make and serve the quantity of burgers they expect to sell. If more people can afford to buy burgers they hire more people not less. The idea that quantity of labor demanded decreases with increased labor costs is oversimplified and ignores reality.
helthanatos 10y ago
This article is quite biased without much proof. Clearly, doomsayers aren't exactly correct, but who is more correct? https://www.dol.gov/featured/minimum-wage/mythbuster https://www.dol.gov/featured/minimum-wage/mythbuster that government page is pretty biased, with proof in small samples. Some workers should be paid more than others, but why should the minimum wage be more than $7.00? http://thesovereigninvestor.com/us-economy/why-raising-the-minimum-wage-will-increase-inflation/ http://thesovereigninvestor.com/us-economy/why-raising-the-m... - that link is pretty biased, but it shows another side of thought that is lacking, with many wage increase proponents ignoring inflation completely. I want everyone to be able to survive, but at what point does a high minimum wage lead to a bigger gap between the employers and workers?
kardashev 10y ago
The article is a bit misleading. The minimum wage is $11/hr. in Seattle and will reach $15 for large businesses by next year, and by 2021 for small businesses. Amazon by itself is bringing in thousands of people per year, none at the minimum wage. To attribute a good economy in Seattle to a minimum wage is a non-sequitur. I find it curious though how some can think raising pay by fiat will help the poor. If this were really so why would there be a schedule to phase it in slowly over 7 instead of immediately? I think part of the reason is that it is expected for natural monetary inflation to cancel out the effect of the min wage increase. If we assume 2% target inflation from the FED then that would be a 15% reduction in buying power of the dollar, reducing the burden on businesses for the increase in wage price. With phased-in increases we tend to see effects that are within the error of margin. Naturally if there was an overnight price increase on anything there would be immediate measurable ramifications, which is probably why the phase-ins are always slow. If people truly thought the effects were positive then they would push for the changes to be as immediate as possible to leave no room for doubt about the effect of the policy. Meanwhile the homeless situation in Seattle is getting progressively worse. With the increase in minimum wage, some people are paid more, but at the expense of some poor people not being able to acquire a job at all. Certainly we could find a better way of handling things.
- firethief 10y ago
  > If this were really so why would there be a schedule to phase it in slowly over 7 years until full implementation instead of immediately? The article's premise is that the benefit to the economy from increasing the income of the lowest-earners outweighs the higher costs to businesses. If this is the case, raising the wages overnight would be disastrous, because businesses would have to pay the surprise higher costs before the economy had a chance to strengthen as a result of the greater spending. Implementing the policy faster doesn't just get the same results faster, it gets different results.
  - bko 10y ago
    I was shocked to learn that there are more people that earn below minimum wage than there are that earn minimum wage [0]. I don't know if these people are exempt from minimum wage (report doesn't say) or are just being paid under the table. Either way, I fear that these employees may lack legitimacy and legal right afforded to other employees. A higher minimum wage, especially significantly higher, will increase the number of these shadow employees. [0] http://www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-minimum-wage-workers-2014.pdf http://www.bls.gov/opub/reports/minimum-wage/archive/charact...
jandrewrogers 10y ago
Any adverse signal from changes to the minimum wage are going to be buried below the noise floor of a Seattle economy that is extremely hot right now. You have to account for the fact that (1) the drop in unemployment has nothing to do with minimum wage jobs and (2) there is a general labor shortage in Seattle that is driving up wages at all tiers regardless of the minimum wage. If the Seattle economy was flat and they could demonstrate no impact on employment of minimum wage workers that would be one thing, but they aren't demonstrating that here. Given the economic conditions in Seattle, the article is arguing from a dubious correlation.
michaelkeenan 10y ago
This doesn't affect the overall point, but the "lowest unemployment rate" part of the headline is annoyingly unsupported. Googling "lowest unemployment city in the usa" shows a Google featured snippet listing Sioux Falls as the city with the lowest unemployment rate at 2.1%, which is lower than Seattle's rate. Edit: turns out the "highest minimum wage" part is also wrong. Seattle's minimum wage is currently $11/hour, and Washington DC's minimum wage is $11.50. (If this is confusing after reading the article, it's because the article didn't mention that the $15/hour rate doesn't start until 2021.)
todd8 10y ago
According to the Washington Post the results of raising the minimum wage from $9.96 to $11.14 per hour are mixed [1], [2]: > Yet the actual benefits to workers might have been minimal, according to a group of economists whom the city commissioned to study the minimum wage and who presented their initial findings last week. > The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle's overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike. > Accounting for these factors, the average increase in total earnings due to the minimum wage was small, the researchers concluded. Using their preferred method, they calculated that workers' earnings increased by $5.54 a week on average because of the minimum wage. Using other methods, the researchers found that the minimum wage hike actually caused total weekly earnings to drop -- by as much as $5.22 a week. It seems to me that the results when the $15/hr minimum are reached are hard to predict. [1] the minimum wage will eventually reach $15/hr however at this point it is only $11.14/hr [2] https://www.washingtonpost.com/news/wonk/wp/2016/07/29/study-raising-the-minimum-wage-did-little-for-workers-earnings-in-seattle/ https://www.washingtonpost.com/news/wonk/wp/2016/07/29/study...
bko 10y ago
You don't need advanced economics to understand that setting a price floor will reduce quantity supplied and increase quantity demanded. It's evident from logic. What other good does not respond to changes in price? Everyone earns some amount of marginal revenue, say X, and they are paid Y where X > Y. Is there absolutely no-one where the marginal revenue that they earn their employer is between the old minimum wage and the new, higher minimum wage? If you throw a rock in a lake, you probably can't reasonably measure the impact it had on the height of the lake. But you're certain that it had an impact. Similarly, you must use logic and reason to deduce that putting a mandated price floor on labor will reduce the amount of labor demanded.
- RangerScience 10y ago
  > Similarly, you must use logic and reason to deduce that putting a mandated price floor on labor will reduce the amount of labor demanded. Ehhhhhh. First, according to a simple theory, yes, you are correct. This means that if the evidence points in another direction (and the article is suggesting it is pointing in another direction), then clearly your simple theory is missing something. Second, the situation is definitely more complicated than that. It's not like the ONLY effect raising minimum wage has is on the cost of employing people; if you're only paying attention to that one effect, sure, I'd expect your conclusion. But - I say - apparently - I note - in this situation, your conclusion is not occurring, so - How do you tell whether this is due to the other, unexamined effects of raising minimum wage, or whether it is due to other causes? Finally: > You don't need advanced economics to understand that setting a price floor will reduce quantity supplied and increase quantity demanded ...No, I wouldn't necessarily expect that. Let's say I mandate that corn costs $10 a cob. What are effects I might expect to see? - Some farmers switch to making more corn, because it's now worth more (they may not be thinking about whether people will buy it at the new price, just that any sold is sold at $10) - Corn moves to be seen as a more "luxury" resource, a la the "keeping up with the joneses" effect. - Some farmers switch to making less corn, because they anticipate fewer people buying it at the higher price, since fewer people can get $10 worth of value out of one cob. (The nominal price of corn may then rise to $10, due to a reduction in supply moving to match demand at the new price). Let's reverse the situation. Let's say I mandate that corn now costs $0.01 a cob. What effects might I expect to see? - Only shitty corn gets made - People find uses for cheap as shit corn, that weren't economical before. Demand for corn rises as there are more economical uses for it I'm not saying that "price floor for employees" is the same as "price floor for corn", I am saying that clearly they are not the same, so you definitely can't apply the same model to both and expect to predict reality. Setting a price floor on a good is definitely different than setting a wage floor on people. And, I'm saying: this is more complicated than such a simple model can predict. Here's a question: Why are you even trying to explain economic cause and effect through logic, rather than through statistical correlation? It's not like you're ever going to be able to understand enough of each situation to actually model everything* "clockwork-universe style", and that's if you can even derive solid laws with which to run the model. Statistical tendencies seems like a much more reasonable way to try to model everything. * Well, maybe with mass adoption of AR.
zw123456 10y ago
One thing that I did not see mentioned in the thread or in the article was the human side of things, we don't want to lose site of the fact that we are talking about human beings who need to get a living wage. I am not saying economic issues don't weigh in, but also there is just a moral factor that I think should always be included in these types of discussion. I live in Seattle and, at least most of the people I know, see that as a significant consideration.
lph 10y ago
The reporting on Seattle's minimum wage hike aligns suspiciously well with news outlets' ideological biases, almost to the point that the articles could have been written before the wage hike even happened. Which suggests that maybe the data are inconclusive or muddled and so everyone is finding what they expected to find. It's a complicated situation, with many factors that aren't touched on in this article: 1. Seattle had relatively few minimum wage workers to begin with. The raise doesn't directly affect most of Seattle's workforce. 2. Seattle's booming economic numbers probably overlook the fact that the working poor and chronically unemployed can't afford to live within city limits. It's expensive here. 3. The tech boom continues to flood the market with high-paid jobs, and prices for everything are steadily raising across the board. This could be masking effects, positive or negative, of the minimum wage hike. 4. Meanwhile, there is a massive increase in homelessness and homeless tent encampments. A lot of people are being left behind by the boom.
partiallypro 10y ago
Seattle is also a very wealthy city already so the absorbsion of higher labor costs is a more elastic. However, you have to look at the greater trend, the U.S. unemployment rate has fallen quite lot since this law was ever enacted, and Seattle already had a lower than average unemployment rate. The full effects of the law will not be felt until it is fully enacted anyhow, but it's important to remember that Seattle isn't some isolated economy, and it is experiencing big economic growth from two of the largest and most successful (and most valuable) companies in the world, Microsoft and Amazon; not to mention just the national aggregate of economic growth. It would be a lot more interesting to see a sector by sector breakdown of labor slack. Restaurant closings after the law began to hike wages to the eventual $15 spiked well above the national average. I doubt that's a coincidence. I honestly don't think you will be able to see a significant effect until after a recession and we can see the effects of sticky wages with a much higher price floor. My guess is that it will still be fairly muted, because....Microsoft and Amazon are both based in the Seattle area; but the effects could perhaps be better measured. Anyone doing a victory lap now is definitely jumping the gun.
misterbishop 10y ago
In case others are inspired by the Seattle example: you should know that their $15 minimum wage experiment was not a result of technocratic liberalism. It was a political fight by self-conscious socialists working in conjunction with SEIU fast food workers. Winning that fight required a combination of "outside" activism, and "inside" political campaigning. The organization involved (Socialist Alternative) actually was able to get a member named Kshama Sawant onto city council. Like many cities, Seattle is Democrat dominated, who totally opposed $15 until they were forced to vote on it in public. Like so many critical political issues, the institutional technocrats will not initiate working class reforms. They must be imposed from below, with working class people organizing themselves. More info here: http://www.socialistalternative.org/2015/03/14/seattle-won-15/ http://www.socialistalternative.org/2015/03/14/seattle-won-1...
VOYD 10y ago
You forgot it's also 4th most expensive place to live in the US.

150 points by MaysonL 10y ago

kingmanaz 10y ago

...Whitest major US city.

deleted 10y ago
[deleted]
arcanus 10y ago
Several of the booming tech cities are. Austin is terrible in terms of diversity. Portland too.
- aaron-lebo 10y ago
  Austin is majority minority. ~48 white, ~35 hispanic, ~8 african american, ~6 asian
  - arcanus 10y ago
    http://www.mystatesman.com/news/news/opinion/as-austins-black-population-falls-a-question-of-re/nrTd4/ http://www.mystatesman.com/news/news/opinion/as-austins-blac... I don't see how one can argue Austin is not pushing out minorities.
    - aaron-lebo 10y ago
      You stated that Austin has horrible diversity, which is not true statistically. Having read the article, it doesn't say anything about how Austin is "pushing out minorities". I won’t dwell on Tang and Falola’s results, which the American-Statesman’s Dan Zehr covered last week, other than to note that a majority of African-Americans — 56 percent — said they left Austin because they no longer could afford to live in the city. Many said they would move back if they could. Furthermore, from the Zehr piece mentioned there: Despite those indications, fewer than half the residents surveyed said they felt “pushed out” of the city, according to the report. The people being "pushed out" say they aren't being pushed out. You are claiming the exact opposite. Did you read the articles? They can't afford it. If you are familiar with Austin this is a problem for all residents - housing prices have shot up because there is so much demand. It's not a minority issue. Yes, they are disproportionately affected, but the city is not targeting them. Ask any resident of Austin that's been there before 2005 and they'll tell you the same thing. The city is having trouble with massive growth - ironically much of it is from West coasters.
      - thaumasiotes 10y ago
        > If you are familiar with Austin this is a problem for all residents - housing prices have shot up because there is so much demand. It's not a minority issue. If you're familiar with Austin, how much more demand for housing there is there compared to demand for housing in Dallas? How is that difference in demand, if any, reflected in pricing? Austin is about as clear a case as you can get of pricing shooting up in response to extremely average levels of demand combined with severe supply restrictions.
        aaron-lebo 10y ago
        Prices have certainly rose in Dallas, but not to the same extent, probably because Dallas is a larger city and can absorb the growth better. From wiki: Dallas 2000 1,188,580 18.0% 2010 1,197,816 0.8% 2015 1,300,092 8.5% Austin 2000 656,562 41.0% 2010 790,390 20.4% 2015 931,830 17.9% That's pretty substantial growth. DFW experienced similar growth in the 90s and it has taken 20 years of building for infrastructure to catch up. Edit: Just as a comparison, here's Seattle: 2000 563,374 9.1% 2010 608,660 8.0% 2015 684,451 12.5%
colmvp 10y ago
14% Asian, which is certainly above the national average.
- nerdponx 10y ago
  How about "least brown" then?
- kelukelugames 10y ago
  The 69.5% white is above the average for major US cities too.
curtis 10y ago
I've been unable to find a good citable ranking of major cities by percentage of white population. But I don't think this is right. Here's what Wikipedia has to say about the demography of Seattle in 2010 [1]: According to the 2010 United States Census, Seattle had a population of 608,660 with a racial and ethnic composition as follows: White: 69.5% (Non-Hispanic Whites: 66.3%) Asian: 13.8% (4.1% Chinese, 2.6% Filipino, 2.2% Vietnamese, 1.3% Japanese, 1.1% Korean, 0.8% Indian, 0.3% Cambodian, 0.3% Laotian, 0.2% Pakistanis, 0.2% Indonesian, 0.2% Thai) Black or African American: 7.9% Hispanic or Latino (of any race): 9.0% (4.0% Mexican, 2.3% Puerto Rican, 1.3% Colombian, 0.2% Guatemalan, 0.2% Salvadoran, 0.2% Cuban) American Indian and Alaska Native: 0.8% Native Hawaiian and Other Pacific Islander: 0.4% Other race: 2.4% Two or more races: 5.1% [1] https://en.wikipedia.org/wiki/Demographics_of_Seattle#Ethnic_groups https://en.wikipedia.org/wiki/Demographics_of_Seattle#Ethnic...
- kingmanaz 10y ago
  From July 2016: "Portland is the whitest big city in America, with a population that is 72.2 percent white and only 6.3 percent African American."[1] [1] http://www.theatlantic.com/business/archive/2016/07/racist-history-portland/492035/ http://www.theatlantic.com/business/archive/2016/07/racist-h...
  - deleted 10y ago
    [deleted]
chrismcb 10y ago
I'm trying to understand what this statement is implying. It's it saying Seattle is booming because it is mostly white? Is it saying Seattle can absorb a higher minimum wage because it is mostly white? I can I'm trying to understand what does the diversity (or lack of) have to do with the financial well being of the entire city?
sctb 10y ago
The guidelines ask us specifically not to do this (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html): > Please avoid introducing classic flamewar topics unless you have something genuinely new to say about them. In this case not only have you said nothing new about the topic, but you've said nothing at all. That's not what this site is for.

pg_is_a_butt 10y ago

... highest suicide and drug addiction rates

sytse 10y ago

Correlation is not causation (fighting urge to post XKCD comic). "Unemployment fell, most recently to less than 4 percent, more than a full percentage point lower than the national rate." The fall can be explained by an improving economy. Unemployment was 4.2% on Dec. 31, 2013 https://ycharts.com/indicators/seattle_wa_unemployment_rate https://ycharts.com/indicators/seattle_wa_unemployment_rate National rate was 6.7% at that time. So the difference between Seattle and national has been reduced, they are relatively worse off after introducing a higher minimum wage. EDIT Can't resist anymore https://xkcd.com/552/ https://xkcd.com/552/

gizmo686 10y ago
"Correlation doesn't imply causation, but it does waggle its eyebrows suggestively and gesture furtively while mouthing 'look over there'." [0] [0] https://xkcd.com/552/ https://xkcd.com/552/ (alt text)
danarlow 10y ago
True, but it pretty definitively refutes the hypothesis that raising the minimum wage to $15 would dramatically increase unemployment in any reasonable setting. That is an important result. Now can have a discussion about the costs and benefits without the fear mongering. Also, here's the full article this blog is quoting: https://www.bloomberg.com/view/articles/2016-10-21/doomsayers-keep-getting-it-wrong-on-higher-minimum-wages https://www.bloomberg.com/view/articles/2016-10-21/doomsayer...
- icebraining 10y ago
  it pretty definitively refutes the hypothesis that raising the minimum wage to $15 would dramatically increase unemployment How so, if Seattle doesn't have a $15/h minimum wage? It'll only take effect in 2017, and even then, only for large employers that don't pay medical benefits. Under this law, the $15 wage will only be universal in 2021: http://murray.seattle.gov/minimumwage/ http://murray.seattle.gov/minimumwage/
jseliger 10y ago
Yes. Seattle also has an incredibly strong economy and (sadly) very tight housing policy: http://jakeseliger.com/2015/09/24/do-millennials-have-a-future-in-seattle-do-millennials-have-a-future-in-any-superstar-cities/ http://jakeseliger.com/2015/09/24/do-millennials-have-a-futu... that likely inhibits low-wage workers from living (or moving) there at all. In the meantime, many Texas cities: http://time.com/80005/why-texas-is-our-future http://time.com/80005/why-texas-is-our-future are building tons of affordable housing, even as superficially liberal cities like Seattle legislate it out of existence.

awinter-py 10y ago

If you assume that (a) most manufacturing has moved to cheap-labor countries and (b) rent is a more important input than labor for restaurants / starbucks, then it's not surprising that raising the wage floor doesn't hurt employment. The wage floor imposed by cost of living is already in effect in most major cities. A bolder move would be to impose a tariff on goods and services that use sub minimum wage labor.

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terravion 10y ago

If you click on the link to Bloomberg you can read the conclusion: "Some time ago, I suggested that we would eventually learn whether higher minimum wages were going to kill jobs. The early data is in, and so far it doesn’t look like they do." This seems like an awfully broad conclusion to draw. It is indisputable that minimum wage kills or exports some jobs (I know this is a fact because my company is planning to add fewer low wage employees and contractors in our local area based largely on minimum wage changes). The question is whether the people who benefit from the supply restriction (people in low, but not minimum wage jobs) benefit and then spend enough to cancel out the aggregate cost of the distortion. It may be possible that in Seattle's unique situation this was/is true, but even this conclusion seems like a "politically motivated economic analysis, this was what the [pr]opponents hoped would happen because it fit with way they think world should work." One of the questions that these pieces skirt around is how inefficient is the "unregulated" labor market? Clearly some intervention in the labor market, like banning non-competes, makes is closer to efficient, but the question is what inefficiency is the minimum wage solving, and what is it creating?

NotSammyHagar 10y ago
It is also indisputable that increasing the minimum wage puts more money into the economy, it's a clear stimulation. And our economy to a large extent is dependent on consumer spending. The increase in spending, vs the fewer jobs with higher minimum wags - that's the complicated question.
- BenoitEssiambre 10y ago
  You dispute yourself what you call indisputable in your own comment! Fewer jobs means potentially less money in the economy (and theory says that in most cases, more money is lost from fewer jobs than gained from higher pay).
  - michaelmrose 10y ago
    Employers at burgers Inc hire enough people to make and serve the quantity of burgers they expect to sell. If more people can afford to buy burgers they hire more people not less. The idea that quantity of labor demanded decreases with increased labor costs is oversimplified and ignores reality.

helthanatos 10y ago

This article is quite biased without much proof. Clearly, doomsayers aren't exactly correct, but who is more correct? https://www.dol.gov/featured/minimum-wage/mythbuster https://www.dol.gov/featured/minimum-wage/mythbuster that government page is pretty biased, with proof in small samples. Some workers should be paid more than others, but why should the minimum wage be more than $7.00? http://thesovereigninvestor.com/us-economy/why-raising-the-minimum-wage-will-increase-inflation/ http://thesovereigninvestor.com/us-economy/why-raising-the-m... - that link is pretty biased, but it shows another side of thought that is lacking, with many wage increase proponents ignoring inflation completely. I want everyone to be able to survive, but at what point does a high minimum wage lead to a bigger gap between the employers and workers?

kardashev 10y ago

The article is a bit misleading. The minimum wage is $11/hr. in Seattle and will reach $15 for large businesses by next year, and by 2021 for small businesses. Amazon by itself is bringing in thousands of people per year, none at the minimum wage. To attribute a good economy in Seattle to a minimum wage is a non-sequitur. I find it curious though how some can think raising pay by fiat will help the poor. If this were really so why would there be a schedule to phase it in slowly over 7 instead of immediately? I think part of the reason is that it is expected for natural monetary inflation to cancel out the effect of the min wage increase. If we assume 2% target inflation from the FED then that would be a 15% reduction in buying power of the dollar, reducing the burden on businesses for the increase in wage price. With phased-in increases we tend to see effects that are within the error of margin. Naturally if there was an overnight price increase on anything there would be immediate measurable ramifications, which is probably why the phase-ins are always slow. If people truly thought the effects were positive then they would push for the changes to be as immediate as possible to leave no room for doubt about the effect of the policy. Meanwhile the homeless situation in Seattle is getting progressively worse. With the increase in minimum wage, some people are paid more, but at the expense of some poor people not being able to acquire a job at all. Certainly we could find a better way of handling things.

firethief 10y ago
> If this were really so why would there be a schedule to phase it in slowly over 7 years until full implementation instead of immediately? The article's premise is that the benefit to the economy from increasing the income of the lowest-earners outweighs the higher costs to businesses. If this is the case, raising the wages overnight would be disastrous, because businesses would have to pay the surprise higher costs before the economy had a chance to strengthen as a result of the greater spending. Implementing the policy faster doesn't just get the same results faster, it gets different results.
- bko 10y ago
  I was shocked to learn that there are more people that earn below minimum wage than there are that earn minimum wage [0]. I don't know if these people are exempt from minimum wage (report doesn't say) or are just being paid under the table. Either way, I fear that these employees may lack legitimacy and legal right afforded to other employees. A higher minimum wage, especially significantly higher, will increase the number of these shadow employees. [0] http://www.bls.gov/opub/reports/minimum-wage/archive/characteristics-of-minimum-wage-workers-2014.pdf http://www.bls.gov/opub/reports/minimum-wage/archive/charact...

jandrewrogers 10y ago

Any adverse signal from changes to the minimum wage are going to be buried below the noise floor of a Seattle economy that is extremely hot right now. You have to account for the fact that (1) the drop in unemployment has nothing to do with minimum wage jobs and (2) there is a general labor shortage in Seattle that is driving up wages at all tiers regardless of the minimum wage. If the Seattle economy was flat and they could demonstrate no impact on employment of minimum wage workers that would be one thing, but they aren't demonstrating that here. Given the economic conditions in Seattle, the article is arguing from a dubious correlation.

michaelkeenan 10y ago

This doesn't affect the overall point, but the "lowest unemployment rate" part of the headline is annoyingly unsupported. Googling "lowest unemployment city in the usa" shows a Google featured snippet listing Sioux Falls as the city with the lowest unemployment rate at 2.1%, which is lower than Seattle's rate. Edit: turns out the "highest minimum wage" part is also wrong. Seattle's minimum wage is currently $11/hour, and Washington DC's minimum wage is $11.50. (If this is confusing after reading the article, it's because the article didn't mention that the $15/hour rate doesn't start until 2021.)

todd8 10y ago

According to the Washington Post the results of raising the minimum wage from $9.96 to $11.14 per hour are mixed [1], [2]: > Yet the actual benefits to workers might have been minimal, according to a group of economists whom the city commissioned to study the minimum wage and who presented their initial findings last week. > The average hourly wage for workers affected by the increase jumped from $9.96 to $11.14, but wages likely would have increased some anyway due to Seattle's overall economy. Meanwhile, although workers were earning more, fewer of them had a job than would have without an increase. Those who did work had fewer hours than they would have without the wage hike. > Accounting for these factors, the average increase in total earnings due to the minimum wage was small, the researchers concluded. Using their preferred method, they calculated that workers' earnings increased by $5.54 a week on average because of the minimum wage. Using other methods, the researchers found that the minimum wage hike actually caused total weekly earnings to drop -- by as much as $5.22 a week. It seems to me that the results when the $15/hr minimum are reached are hard to predict. [1] the minimum wage will eventually reach $15/hr however at this point it is only $11.14/hr [2] https://www.washingtonpost.com/news/wonk/wp/2016/07/29/study-raising-the-minimum-wage-did-little-for-workers-earnings-in-seattle/ https://www.washingtonpost.com/news/wonk/wp/2016/07/29/study...

bko 10y ago

You don't need advanced economics to understand that setting a price floor will reduce quantity supplied and increase quantity demanded. It's evident from logic. What other good does not respond to changes in price? Everyone earns some amount of marginal revenue, say X, and they are paid Y where X > Y. Is there absolutely no-one where the marginal revenue that they earn their employer is between the old minimum wage and the new, higher minimum wage? If you throw a rock in a lake, you probably can't reasonably measure the impact it had on the height of the lake. But you're certain that it had an impact. Similarly, you must use logic and reason to deduce that putting a mandated price floor on labor will reduce the amount of labor demanded.

RangerScience 10y ago
> Similarly, you must use logic and reason to deduce that putting a mandated price floor on labor will reduce the amount of labor demanded. Ehhhhhh. First, according to a simple theory, yes, you are correct. This means that if the evidence points in another direction (and the article is suggesting it is pointing in another direction), then clearly your simple theory is missing something. Second, the situation is definitely more complicated than that. It's not like the ONLY effect raising minimum wage has is on the cost of employing people; if you're only paying attention to that one effect, sure, I'd expect your conclusion. But - I say - apparently - I note - in this situation, your conclusion is not occurring, so - How do you tell whether this is due to the other, unexamined effects of raising minimum wage, or whether it is due to other causes? Finally: > You don't need advanced economics to understand that setting a price floor will reduce quantity supplied and increase quantity demanded ...No, I wouldn't necessarily expect that. Let's say I mandate that corn costs $10 a cob. What are effects I might expect to see? - Some farmers switch to making more corn, because it's now worth more (they may not be thinking about whether people will buy it at the new price, just that any sold is sold at $10) - Corn moves to be seen as a more "luxury" resource, a la the "keeping up with the joneses" effect. - Some farmers switch to making less corn, because they anticipate fewer people buying it at the higher price, since fewer people can get $10 worth of value out of one cob. (The nominal price of corn may then rise to $10, due to a reduction in supply moving to match demand at the new price). Let's reverse the situation. Let's say I mandate that corn now costs $0.01 a cob. What effects might I expect to see? - Only shitty corn gets made - People find uses for cheap as shit corn, that weren't economical before. Demand for corn rises as there are more economical uses for it I'm not saying that "price floor for employees" is the same as "price floor for corn", I am saying that clearly they are not the same, so you definitely can't apply the same model to both and expect to predict reality. Setting a price floor on a good is definitely different than setting a wage floor on people. And, I'm saying: this is more complicated than such a simple model can predict. Here's a question: Why are you even trying to explain economic cause and effect through logic, rather than through statistical correlation? It's not like you're ever going to be able to understand enough of each situation to actually model everything* "clockwork-universe style", and that's if you can even derive solid laws with which to run the model. Statistical tendencies seems like a much more reasonable way to try to model everything. * Well, maybe with mass adoption of AR.

zw123456 10y ago

One thing that I did not see mentioned in the thread or in the article was the human side of things, we don't want to lose site of the fact that we are talking about human beings who need to get a living wage. I am not saying economic issues don't weigh in, but also there is just a moral factor that I think should always be included in these types of discussion. I live in Seattle and, at least most of the people I know, see that as a significant consideration.

lph 10y ago

The reporting on Seattle's minimum wage hike aligns suspiciously well with news outlets' ideological biases, almost to the point that the articles could have been written before the wage hike even happened. Which suggests that maybe the data are inconclusive or muddled and so everyone is finding what they expected to find. It's a complicated situation, with many factors that aren't touched on in this article: 1. Seattle had relatively few minimum wage workers to begin with. The raise doesn't directly affect most of Seattle's workforce. 2. Seattle's booming economic numbers probably overlook the fact that the working poor and chronically unemployed can't afford to live within city limits. It's expensive here. 3. The tech boom continues to flood the market with high-paid jobs, and prices for everything are steadily raising across the board. This could be masking effects, positive or negative, of the minimum wage hike. 4. Meanwhile, there is a massive increase in homelessness and homeless tent encampments. A lot of people are being left behind by the boom.

partiallypro 10y ago

Seattle is also a very wealthy city already so the absorbsion of higher labor costs is a more elastic. However, you have to look at the greater trend, the U.S. unemployment rate has fallen quite lot since this law was ever enacted, and Seattle already had a lower than average unemployment rate. The full effects of the law will not be felt until it is fully enacted anyhow, but it's important to remember that Seattle isn't some isolated economy, and it is experiencing big economic growth from two of the largest and most successful (and most valuable) companies in the world, Microsoft and Amazon; not to mention just the national aggregate of economic growth. It would be a lot more interesting to see a sector by sector breakdown of labor slack. Restaurant closings after the law began to hike wages to the eventual $15 spiked well above the national average. I doubt that's a coincidence. I honestly don't think you will be able to see a significant effect until after a recession and we can see the effects of sticky wages with a much higher price floor. My guess is that it will still be fairly muted, because....Microsoft and Amazon are both based in the Seattle area; but the effects could perhaps be better measured. Anyone doing a victory lap now is definitely jumping the gun.

misterbishop 10y ago

In case others are inspired by the Seattle example: you should know that their $15 minimum wage experiment was not a result of technocratic liberalism. It was a political fight by self-conscious socialists working in conjunction with SEIU fast food workers. Winning that fight required a combination of "outside" activism, and "inside" political campaigning. The organization involved (Socialist Alternative) actually was able to get a member named Kshama Sawant onto city council. Like many cities, Seattle is Democrat dominated, who totally opposed $15 until they were forced to vote on it in public. Like so many critical political issues, the institutional technocrats will not initiate working class reforms. They must be imposed from below, with working class people organizing themselves. More info here: http://www.socialistalternative.org/2015/03/14/seattle-won-15/ http://www.socialistalternative.org/2015/03/14/seattle-won-1...

VOYD 10y ago

You forgot it's also 4th most expensive place to live in the US.