“The city of Seattle has the highest minimum wage in the United States,” notes Dylan Pahman in this week’s Acton Commentary. “While economists and policy-makers continue to debate the issue, a recent working paper from researchers at the University of Washington (UW) raises serious questions about the effectiveness of minimum wage hikes.”
In short, the study concludes that the “increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent.” The researchers explain, “The reduction in hours would cost the average employee $179 per month, while the wage increase would recoup only $54 of this loss, leaving a net loss of $125 per month (6.6%), which is sizable for a low-wage worker.” If this study holds up to scrutiny, it will show that, contrary to their intention, those who hoped to help workers at the bottom have actually made things worse.
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