Will the new $15 minimum wage help the economy by putting more spending money in worker’s pockets, or will small businesses and local consumers end up hurt by the higher payroll costs?
With Seattle’s minimum wage increasing to $15 per hour by the year 2022, what impact can we except on workers, businesses, shoppers and diners, and on families throughout the city?
The University of Washington departments of public affairs, public health and social work are entering a collaboration with The Seattle Minimum Wage Study, a five-year research endeavor to answer these questions and more.
Following the ordinance approved by the Seattle City Council last year, a citywide minimum wage hike ($11 an hour) went into effect on April 1; this will increase to $15 an hour by the first of the year in 2022. Policymakers also moved to study the impact of that ordinance, and has contracted with UW researchers for the project.
Professor Jacob Vigdor in the Evans School of Public Affairs will serve as chief investigator for the study, along with Mark Long, also of the Evans School, and Jennifer Romich of the School of Social Work. Other co-investigators are Scott Bailey and Anneliese Vance-Sherman of the Washington Employment Security Department.
In a recent interview with Seattle’s NPR station KUOW, Vigdor explained that “Our goal is to make this a data-driven conversation about what is the good that is being done, what is the harm that is being done, and are we happy with that tradeoff”.
The study will involve a multi-pronged approach to the new wage’s effects on workers as well as its impact on employers and the local economy. There are several components and strategies, including employer surveys, an extensive study of the effect on families, and research on regional pricing, administrative and census data.
The researchers mapped out some of the key questions they will pursue in their research on the higher minimum wage, including but not limited to the following:
- What is its impact on workers, their families, employers and the community?
- Does it impact employment and earnings among low-wage workers?
- Does it affect overall employment, business longevity or the mix of firms that do business in Seattle?
- How does it affect consumer prices?
- Does it improve quality of life measures, including health, nutrition and daily family life?
- Does it affect public assistance program eligibility and benefits received?
- Do nonprofit service organizations respond to higher wages by cutting back on services to vulnerable families?
- How do low-income families and employers experience the implementation of the policy and how do they perceive its benefits and costs?
- How do businesses adapt to higher labor costs?
The project will build on previous research by Plotnick, Long and Marieka Klawitter, also of the Evans School, on who would be affected by the wage increase. That report was released in March 2014, prior to the passage of the ordinance.
The researchers will provide the city of Seattle regular updates on their study as the wage increases are implemented.