Seattle has a $15 minimum wage. No, the world didn’t end | Tuesday Morning Coffee

July 23, 2019 7:02 am

Good Tuesday Morning, Fellow Seekers.
If there’s one thing we heard over and over again from legislative leaders and business-types during debate over whether to raise Pennsylvania’s $7.25/hr. minimum wage for the first time in a decade, it’s that jobs would evaporate, small businesses would close, and that, we’re pretty sure, mountains would plunge into the seas, the glaciers would again cover the land, and maybe, just maybe, Baltimore would take two out of three off Boston.

Okay, so maybe that last bit isn’t the worst thing in the world … but … anyway, that kind of fear-mongering was enough to kill the argument over Gov. Tom Wolf’s plan to boost the wage to $12 this month and then to $15 by 2025, stone dead. At least for now.

But would it have really been as bad as all that? New reporting by Vox, on the state of Seattle’s $15/hr minimum, now four years old, suggests that the anti-wage hype here in Pennsylvania might have been decidedly overblown.

First, some background:
Five years ago, Seattle city officials passed legislation boosting the wage to $15/hr for companies with more than 500 employees, and then for all employers by 2021, Vox reported. Right now, the wage is $16/hr for those larger employers and $15 for everyone else (some employers, such as those with tipped workers, or who provide certain benefits, pay $12/hr), Vox reported.

A coalition of progressive advocacy groups rallies on the Pa. Capitol steps to call for better funding for public schools, a higher minimum wage, and other items in the 2019 state budget. (Capital-Star photo by John L. Micek)

So how’d that work out?

First, up employers: “Generally, those business owners who threatened to leave Seattle to evade the new wage haven’t been following through … According to the Bureau of Labor Statistics, the number of jobs in restaurants and bars in the Seattle area has grown from 134,000 to 158,000 since 2015 … Researchers found the most common response to the wage increase was to raise prices or fiddle with workers’ hours, and a “very small percentage were thinking about withdrawing or leaving the city,” Vox reported.

The result for workers, Vox notes, was a bit more varied, as “economists observed the impact of the hike in 2017 and found it had dramatic effects on the low-wage workforce and employment.

“Not all of them were good. They found that the policy ‘reduced hours worked in low-wage jobs by 6-7 percent, while hourly wages in such jobs increased by 3 percent … consequently, total payroll for such jobs decreased,’  Vox reported. The take-away there is that the “total amount that employers paid to workers was less with the new minimum wage in place than projected payroll if the policy hadn’t gone into effect,” Vox reported.

The available data, according to researcher Mark C. Long, “suggested a ‘tipping point’ between $11 and $13 when it becomes less tenable to keep work in the city.” (Critics were quick to point out that this likely wasn’t solely due to the minimum wage policy — Seattle’s labor market continued to heat up during that period, reducing the number of low-wage jobs compared to high-wage jobs overall.),” Vox reported.

(Image via Flickr Commons)

There’s always a ‘But:’
“But a year later, the team published another paper that complicated their findings. They looked at the same time period and same wage increase, but this time broke down the actual take-home pay of workers. They found that workers who were already employed at the low end of the wage scale in Seattle “enjoyed significantly more rapid hourly wage growth,” following wage increases in 2015 and 2016.

“Those who were already working more hours before the wage increase saw “essentially all of the earnings increases,” while the workers who had fewer hours saw their hours go down, but wages go up enough so that their overall earnings didn’t really change. They theorized that a slowdown in new hiring for low-wage jobs could explain their earlier findings that overall payroll had gone down.

“Ultimately, workers already employed either saw their take-home pay go up or stay roughly the same while working fewer hours,” Vox reported.

Bottom line: All those concerned agree that the push was a good idea. And that should provide additional inducement to Pennsylvania advocates — who have made it clear that they’re not going away any time soon.

WikiMedia Commons

Our Stuff.
As expected, advocates for low-income Pennsylvanians are suing in state court over last month’s elimination of Pennsylvania’s General Assistance program. Sarah Anne Hughes has everything you need to know.

Stephen Caruso updates on the status of an important state program that helps get low-income Pennsylvanians to and from their doctor appointments.  Caruso also has a quick hit on the Pennsylvania GOP appointing a ‘compliance officer’ in the wake of a sexual harassment scandal.

Pennsylvania Health & Human Services Secretary Teresa Miller stressed the importance of the ‘lifeline’ services her agency offers. She was this month’s speaker at the Pennsylvania Press Club.

On our Commentary Page, a University of Virginia law professor argues that sentencing people to hundreds of years in prison is a bad idea and doesn’t further the cause of justice.

(Photo via Flickr Commons)

A University of Pennsylvania law professor is taking heat for her remarks about race and immigration, the Inquirer reports.
Pennsylvania taxpayers are paying $10 million a year for messaging by the Legislature, including ‘news’ broadcasts, LancasterOnline reports.
The Post-Gazette has the details on street closures for Officer Calvin Hall’s funeral.
Police have charged a suspect in connection with Hall’s death, the Tribune-Review reports.
The Lehigh Valley is set to lose $380 million in transportation funding from PennDOT over the next 12 years, the Morning Call reports.
Penn State Health has announced plans for another central Pa. hospitalPennLive reports.

Here’s your #Pittsburgh Instagram of the Day:

Philly’s summer writing camp is ‘bursting at the seams,’ BillyPenn reports.
A rare butterfly has found refuge at a Pa. military base, the PA Post reports.
Democrat Debbie Wachspress has stepped up to challenge U.S. Rep. Brian Fitzpatrick, D-1st District, PoliticsPA reports.
During a controversial month, new White House spokeswoman Stephanie Grisham has not had much to sayPolitico observes.
The Trump administration and leaders on Capitol Hill have agreed to a two-year budget deal, Roll Call reports.

What Goes On.
10 a.m., Independence Visitors Center, Philadelphia: 
The House Liquor Control Committee holds a public hearing on converting liquor licenses.
10:30 a.m., Main Rotunda: A man who says he was sexually abused as a child announces his lawsuit against Harrisburg’s Roman Catholic Diocese.
11:30 a.m., Media Center: Auditor General Eugene DePasquale will release a follow-up report on state oversight of nursing home care.
1 p.m., Science Center, Philadelphia: House Democratic Policy Committee hearing on gun violence as a public health epidemic.

Gov. Tom Wolf 
has no public schedule today.

You Say It’s Your Birthday Dept.
Best wishes go out to Anna Orso, of the Philadelphia Inquirer, who celebrates today. Congratulations and enjoy the day.

Heavy Rotation.
Here’s an old favorite from Matthew Sweet to get the work day rolling. It’s ‘Looking at the Sun.’

Tuesday’s Gratuitous Baseball Link.
 dropped a 6-3 decision to the DBacks on Monday night. Plus la change, eh?

And now you’re up to date. 

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John L. Micek

A three-decade veteran of the news business, John L. Micek is the Pennsylvania Capital-Star's former Editor-in-Chief.