# If a pollster called me, I would tell them the minimum wage should be \$15. The reverse prank call

## Pollsters don’t call me, this is kinda frustrating ‘cos I have so much to tell them and I hope they ask me the right questions. Even if they don’t I’ll figure out some way to wheedle them in.

Denmark has to be a good place to live until you turn 18, then they Logan’s Run you. After your birthday the minimum wage jumps up 40 percent. But, but, but employment drops by one-third, as seen in this chart.

Seattle has too many coffee shops, overly caffeinated millennials, people with big blue prints of how to make the world a better place and too many politicians who want desperately to get re-elected.

The Seattle planets aligned and agreed on raising the minimum wage incrementally, year by year, up to \$15 dollars an hour. I don’t know how the gurus came up with a round number, it could not have been anything precisely calculated so I don’t trust it. Why not 14.32 an hour? or 17.91 an hour, more believable and infers lots of hard mathematics were done to get to such a precise number.

3 days ago, on July 1,2017, the minimum wage in Seattle hit its target of \$15 dollars an hour. Two years ago it had been spiked to \$13.

A study supported and funded in part by the Seattle city government, was released this week, along with an NBER paper evaluating Seattle’s minimum wage increase to \$13 an hour. The papers find that the increase to \$13 an hour had significant negative impacts on employment and led to lower incomes for minimum wage workers.

The study is the first study of a very high minimum wage for a city. During the study period, Seattle’s minimum wage increased from what had been the nation’s highest state minimum wage to an even higher level. It is also unique in its use of administrative data that has much more detail than is usually available to economics researchers.

Conclusions from the research focusing on Seattle’s increase to \$13 an hour are clear: The policy harms those it was designed to help.

• A loss of more than 5,000 jobs and a 9 percent reduction in hours worked by those who retained their jobs
• Low-wage workers lost an average of \$125 per month. The minimum wage has always been a terrible way to reduce poverty. The Seattle study provides evidence backing up that forecast
• Politicans only hurt the ones they love

The Seattle Minimum Wage Study was supported and funded in part by the Seattle city government.

Now for the good news, (kidding, there is no good news) The state’s employment department estimatesthat about 301,000 jobs will be affected by the rate increase. With employment of almost 1.8 million, that means one in six workers will be affected by the steep hikes going into effect on July 1. That’s a big piece of the work force. By way of comparison, in the past when the minimum wage would increase by five or ten cents a year, only about six percent of the workforce was affected.

This is going to disproportionately affect youth employment. Unemployment for Oregonians age 16 to 19 is 8.5 percentage points higher than the national average. This was not always the case. In the early 1990s, Oregon’s youth had roughly the same rate of unemployment as the U.S. as a whole. Then, as Oregon’s minimum wage rose relative to the federal minimum wage, Oregon’s youth unemployment worsened.

It has been suggested Oregon youth have traded education for work experience — in essence, they have opted to stay in high school or enroll in higher education instead of entering the workforce. The figure below shows, however, that youth unemployment has increased for both those enrolled in school and those who are not enrolled in school. The figure debunks the notion that education and employment are substitutes. In fact, the large number of students seeking work demonstrates many youth want employment while they further their education.

None of these results should be surprising. Minimum wage research is more than a hundred years old. Casting aside some preposterous research from the 1990s, economists are broadly in agreement that higher minimum wages are associated with reduced employment, especially among youth. The research published this week is groundbreaking in its data and methodology. At the same time, the results are unsurprising to anyone with any understanding of economics or running a business.

Overly caffeinated millennials, people with big blue prints of how to make the world a better place and politicians who want desperately to get re-elected have neither.

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