Seattle Minimum Wage Increase

Seattle Minimum Wage Increase

The main question raised by the authors is whether the increase in minimum age in Seattle has impacted employment in all the categories of low wage employees spanning in all worker demographics and all industries (Jardim et al., 2017). The question is interested in the current minimum wage increase and the historical impact in the past. The examined conclusions of the two Seattle studies on increased minimum wage have been used to determine the impacts they bring to employment if any, that have been documented. This could enable compare the estimated employment effects and the wage effects and point out the pliability of employment with regard to the increased wage.

The estimate on the effect of the minimum wage was done using two methods which allowed for flexible pre-policy developments in treated and control areas: interactive fixed effects method and the synthetic control method. Both methods are used to evaluate the effect of the intervention in comparative case studies. At first, this was done by utilizing data obtained from Washington’s employment security department which had been collected for the purposes of administering unemployment insurance (Jardim et al., 2017). Cases from geographical regions and the cross-border difference in difference estimators were used to test the impact of increased minimum wage. The estimated employment effects were also compared to the wage effects to accurately reveal the spring of the employment with regard to the increased wage motivated by an increased price floor.

The results found out that while state minimum wage increase, the hourly pay for low wage workers rose only by 3 percent. The rise to $11 per hour had an insignificant impact on employment whereas the rise to $13 per hour led to a significant drop in employment (Jardim et al., 2017). Relatively, the total payroll for jobs lowered implying that low wage regulation reduced the sum to be paid to the employees in the minimum wage employments to usual pay of $74 per month per job. Concerning the wages, the authors found out that the wages have increased substantially with many in limited service restaurant as compared to the overall food service industry. The restaurant wages increased comparably in the full market and low wage market.

There is a noble motive to trust that an increased minimum wage beyond a certain level is probable to lead to larger employment losses rather than an increase in minor levels (Jardim et al., 2017). It is evident that prior studies that have been carried out to determine the impact of minimum wage effects through the use of data resources do not allow direct observation to different industries. On the other hand, one cannot assume the specific findings in generalized minimum wage findings that have been set at the state level. This is because the consequence of the minimum wage policies that have been established by the government likely depend on the industrial characteristics, structure and other features of the local labor force. Thus, the data used in determining the effect of increased minimum wage limits its scope to employees at a single location, therefore, it is reasonable to question the methods used to determine the consequences of the minimum wage increase. 

References

Jardim, E., Long, M. C., Plotnick, R., Van Inwegen, E., Vigdor, J., & Wething, H. (2017). Minimum wage increases, wages, and low-wage employment: Evidence from Seattle (No. w23532). National Bureau of Economic Research.