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The problem is that the Seattle law sets the minimum wage of multi-site businesses higher than single-site businesses. The expected effect of this is that minim

The problem is that the Seattle law sets the minimum wage of multi-site businesses higher than single-site businesses. The expected effect of this is that minimum wage workers of single-site businesses will quit and work at multi-site businesses for the higher wage. A study looking only at single-site employment counts these people as having left the workforce when they've actually received a raise.

Aron 9y ago
Did the authors of the report make this hypothesis?
cwyers 9y ago
Okay, but if you look at the results of the UW study: > This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies. There's a few things going on here. 1) Looking at just the restaurant industry, which is all the Berkeley study looked at, the UW study found an effect of zero. It's all the employment sectors Berkeley didn't look at where the UW study found other results. 2) They found a smaller increase in hourly wages than other studies, because they were able to figure out how many employees were earning more than the previous minimum wage but less than the new minimum wage. This should be agnostic to the multi-site data issue. 3) They found that the number of employees held steady and the number of hours worked dropped. That's not the effect that you speculate the lack of multi-site data would lead to.
- frgtpsswrdlame 9y ago
  1) Looking at other industries doesn't invalidate the multi-site critique. 2) The problem here is they narrowly looked at only a small band; they don't even consider jobs which make more than $19/hr. Consider a hypothetical world where when the minimum wage goes from $12/hr to $13/hr, the people who were already making $13 get raised to $14, those making $14 get a bump to $15 and so on with zero effect on the number of people employed, essentially everyone gets a $1 raise. (Note: I am not saying this is our world.) What would the UW study show? It would show a decrease in labor equal to amount of people previously making between $18.01 and $19.00. All these people have been raised above the $19 boundary and so no longer are counted. So even in a situation with no change in the amount of jobs and only positive wage effects, the UW study will show negative employment effects. This is actually where the difference between Berkeley's positive effect and UW's zero effect comes in, from the pdf I linked previously: This pattern of average higher pay and more employment appears also in food services: a decline of about 150 jobs paying under $19 from 2014 to 2016 and a simultaneous increase of about 4,500 jobs in all pay levels at single-site food service establishments. This actually brings me to one of the biggest problems, also from the pdf above: The UW report nonetheless finds an unprecedented impact of wage increases on jobs, ten times higher than the average in 942 published minimum wage and non-minimum wage estimates, and triple that of minimum wage critic David Neumark.7 There is no reason why Seattle's low-paid employers should be so much more sensitive to wage increases than employers elsewhere. Incredible results demand incredible proof and the UW study does not do a good job at all of providing that proof. EDIT: 3) Whether it's number of jobs or hours of work, both are affected by the $19/hr cap so the difference is inconsequential.
  - cwyers 9y ago
    "The UW report nonetheless finds an unprecedented impact of wage increases on jobs, ten times higher than the average in 942 published minimum wage and non-minimum wage estimates, and triple that of minimum wage critic David Neumark. There is no reason why Seattle's low-paid employers should be so much more sensitive to wage increases than employers elsewhere." Except that's not the claim. Nobody's saying Seattle is more sensitive, just that there's better data there. So, we start off with talking about the multi-site critique, I respond to that, and you... switch topics to the $19 cut-off? Is this Calvinball?
sjg007 9y ago
Yes and no. They have to get a job at the multi site place which might not happen due to competition for jobs or location.
cbhl 9y ago
It's not clear to me why you can draw conclusions about the impact on employees from the UW study. I read it as "minimum wage increase hurts small employers more than big ones", which is less headline-worthy.
- culturalzero 9y ago
  I worked in Seattle at minimum wage through this for a "small employer"(this term isn't very nuanced) who was still a millionaire and making huge profits. More significant than the cost of any wage hikes he was experiencing is the skyrocketing real estate market here. This doesn't even begin the discussion on the concern for the welfare of employers who complain that their large profits are being hurt because they can't squeeze dimes from poor people as easily.
mattmcknight 9y ago
The multi-site critique is a dead end. Losses at multi-site businesses were likely worse, according to the survey. ---- http://m.startribune.com/seattle-study-shows-low-wage-jobs-declined-with-city-minimum-wage-hike/431141493/?section=local http://m.startribune.com/seattle-study-shows-low-wage-jobs-d... The study doesn’t include large employers, such as fast-food chains, that have locations both inside and outside Seattle. But the researchers say they did account for big employers in a separate survey of more than 500 Seattle businesses. The results showed employers with multiple locations were more likely to cut jobs as a result of the wage increase than those with just one location. “It’s fair to say that it is a blind spot in our data, but it’s not a blind spot in our survey,” said Jacob Vigdor, a University of Washington public policy professor who worked on the study. “Our best guess as to what we’re missing is we’re missing effects that are even more negative than what we reported.”
- frgtpsswrdlame 9y ago
  The Seattle Minimum Wage Study survey is a dead-end, it's completely qualitative which is why multi-site businesses were excluded from this study. The authors argue that excluding almost 40 percent of state employment from the analysis will likely have no effect on their findings. They cite results from a survey of 500 business owners before and after the minimum wage went into effect in Seattle. According to the survey, before the increase, multi-site employers were more likely than single-site employers to report that they intended to reduce employment in the wake of the Seattle ordinance and, after the increase, multi-site employers were more likely to report a reduction in employees. These qualitative reports of employer intentions before the increase and the retrospective, qualitative assessments of employer actions one year after the increase, however, are not a substitute for hard data on what these businesses actually did after the ordinance went into effect. And—what is at least as important—these qualitative reports on Seattle businesses tell us nothing about about the employment changes in the rest of Washington, the comparison group for this study’s estimates of the effects of the minimum wage. 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/ http://www.epi.org/publication/the-high-road-seattle-labor-m... Businesses have a vested interest in saying that the minimum wage hike will cause them to lower employment. That's why we should rely on the numbers.
Aron 9y ago
So your theory is that employment rates actually improve most in the businesses where minimum wage goes up the most?

Aron 9y ago

Did the authors of the report make this hypothesis?

cwyers 9y ago

Okay, but if you look at the results of the UW study: > This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies. There's a few things going on here. 1) Looking at just the restaurant industry, which is all the Berkeley study looked at, the UW study found an effect of zero. It's all the employment sectors Berkeley didn't look at where the UW study found other results. 2) They found a smaller increase in hourly wages than other studies, because they were able to figure out how many employees were earning more than the previous minimum wage but less than the new minimum wage. This should be agnostic to the multi-site data issue. 3) They found that the number of employees held steady and the number of hours worked dropped. That's not the effect that you speculate the lack of multi-site data would lead to.

frgtpsswrdlame 9y ago
1) Looking at other industries doesn't invalidate the multi-site critique. 2) The problem here is they narrowly looked at only a small band; they don't even consider jobs which make more than $19/hr. Consider a hypothetical world where when the minimum wage goes from $12/hr to $13/hr, the people who were already making $13 get raised to $14, those making $14 get a bump to $15 and so on with zero effect on the number of people employed, essentially everyone gets a $1 raise. (Note: I am not saying this is our world.) What would the UW study show? It would show a decrease in labor equal to amount of people previously making between $18.01 and $19.00. All these people have been raised above the $19 boundary and so no longer are counted. So even in a situation with no change in the amount of jobs and only positive wage effects, the UW study will show negative employment effects. This is actually where the difference between Berkeley's positive effect and UW's zero effect comes in, from the pdf I linked previously: This pattern of average higher pay and more employment appears also in food services: a decline of about 150 jobs paying under $19 from 2014 to 2016 and a simultaneous increase of about 4,500 jobs in all pay levels at single-site food service establishments. This actually brings me to one of the biggest problems, also from the pdf above: The UW report nonetheless finds an unprecedented impact of wage increases on jobs, ten times higher than the average in 942 published minimum wage and non-minimum wage estimates, and triple that of minimum wage critic David Neumark.7 There is no reason why Seattle's low-paid employers should be so much more sensitive to wage increases than employers elsewhere. Incredible results demand incredible proof and the UW study does not do a good job at all of providing that proof. EDIT: 3) Whether it's number of jobs or hours of work, both are affected by the $19/hr cap so the difference is inconsequential.
- cwyers 9y ago
  "The UW report nonetheless finds an unprecedented impact of wage increases on jobs, ten times higher than the average in 942 published minimum wage and non-minimum wage estimates, and triple that of minimum wage critic David Neumark. There is no reason why Seattle's low-paid employers should be so much more sensitive to wage increases than employers elsewhere." Except that's not the claim. Nobody's saying Seattle is more sensitive, just that there's better data there. So, we start off with talking about the multi-site critique, I respond to that, and you... switch topics to the $19 cut-off? Is this Calvinball?

sjg007 9y ago

Yes and no. They have to get a job at the multi site place which might not happen due to competition for jobs or location.

cbhl 9y ago

It's not clear to me why you can draw conclusions about the impact on employees from the UW study. I read it as "minimum wage increase hurts small employers more than big ones", which is less headline-worthy.

culturalzero 9y ago
I worked in Seattle at minimum wage through this for a "small employer"(this term isn't very nuanced) who was still a millionaire and making huge profits. More significant than the cost of any wage hikes he was experiencing is the skyrocketing real estate market here. This doesn't even begin the discussion on the concern for the welfare of employers who complain that their large profits are being hurt because they can't squeeze dimes from poor people as easily.

mattmcknight 9y ago

The multi-site critique is a dead end. Losses at multi-site businesses were likely worse, according to the survey. ---- http://m.startribune.com/seattle-study-shows-low-wage-jobs-declined-with-city-minimum-wage-hike/431141493/?section=local http://m.startribune.com/seattle-study-shows-low-wage-jobs-d... The study doesn’t include large employers, such as fast-food chains, that have locations both inside and outside Seattle. But the researchers say they did account for big employers in a separate survey of more than 500 Seattle businesses. The results showed employers with multiple locations were more likely to cut jobs as a result of the wage increase than those with just one location. “It’s fair to say that it is a blind spot in our data, but it’s not a blind spot in our survey,” said Jacob Vigdor, a University of Washington public policy professor who worked on the study. “Our best guess as to what we’re missing is we’re missing effects that are even more negative than what we reported.”

frgtpsswrdlame 9y ago
The Seattle Minimum Wage Study survey is a dead-end, it's completely qualitative which is why multi-site businesses were excluded from this study. The authors argue that excluding almost 40 percent of state employment from the analysis will likely have no effect on their findings. They cite results from a survey of 500 business owners before and after the minimum wage went into effect in Seattle. According to the survey, before the increase, multi-site employers were more likely than single-site employers to report that they intended to reduce employment in the wake of the Seattle ordinance and, after the increase, multi-site employers were more likely to report a reduction in employees. These qualitative reports of employer intentions before the increase and the retrospective, qualitative assessments of employer actions one year after the increase, however, are not a substitute for hard data on what these businesses actually did after the ordinance went into effect. And—what is at least as important—these qualitative reports on Seattle businesses tell us nothing about about the employment changes in the rest of Washington, the comparison group for this study’s estimates of the effects of the minimum wage. 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/ http://www.epi.org/publication/the-high-road-seattle-labor-m... Businesses have a vested interest in saying that the minimum wage hike will cause them to lower employment. That's why we should rely on the numbers.

Aron 9y ago

So your theory is that employment rates actually improve most in the businesses where minimum wage goes up the most?