The effect of minimum wage on employment and business viability is still uncertain; just this past week, two separate studies on Seattle's minimum wage hike presented diverging results. The reasonable increase of $12 by 2018 left room for businesses to adjust and was supported by the Tacoma-Pierce County Chamber of Commerce.
The city has set up a wage enforcement bureau, the Office of Wage Standards, to take in complaints about employers that fail to pay the local minimum wages. They also may have limited wiggle room in how much they can charge their families, particularly if they are serving a low-income clientele. "Many of our organizations have been partnering with the government agencies covering the city of Los Angeles, the city of Santa Monica, and unincorporated areas of Los Angeles to ensure both workers and employers know about the wage increases", said Alexandra Suh, Executive Director at the Koreatown Immigrant Workers Alliance, earlier this week. Here's something different: ME just lowered its minimum for some workers. And a parallel study by the Seattle Minimum Wage Study Team at the University of Washington also estimated that the effect of the higher minimum wage on restaurant employment was zero. Nationally, fast food workers are among those actively seeking a $15 and hour minimum pay, and labor unions are organizing a "Fight for $15" push. "We feel an increase in the minimum wage must be met with better attention to workforce development to really be a benefit to everyone".
For one thing, it reveals a new and disturbing channel by which minimum wages could hurt the very workers they're created to help - reduced working hours. This is not about justifying the wealth of the rich, it's about respecting the natural law of market forces.
It's unclear the impact the gradual increase will have on low-wage workers, but it stands to reason overall family income will go up and that serves everyone. The number of low-wage jobs fell by 6.8 percent, while low-wage employees worked 9.4 percent less over the first nine months of 2016.
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It's a temptation to file the UW study under "We told you so", but keeping wages low is not the only takeaway. The average low-wage employee saw his or her wages drop by 6.6 percent, or $125 per month.
Smaller businesses, for example, will need to adhere to another increase under the state law to $11 per hour on January 1, 2018, before being required under the local laws to adjust their wages again next July to $12 per hour.
"With this vote, the minimum wage will no longer be a poverty wage in Los Angeles, " Garcetti said in June 2015 after the City Council voted to approve the hike.
Where does minimum-wage policy start to hurt poor workers instead of help?