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The Revealed Victims of Seattle's $15 minimum Wage Hike

June 27th 2017

Fast Food Burger

According to a report prepared for the city council of Seattle, the minimum wage hike to $15 per hour has hit the poor of that city hardest. In 2014, Seattle Mayor Ed Murray signed a measure into law that embraced the $15 minimum wage, which is double the federal minimum of $7.25. The ordinance calls for achieving that level by 2017 for all major employers and by 2019 for small businesses. While the new base rate has satisfied labor organizations such as the Service Employees International Union, the take-home pay of workers has suffered even before the hike has been completed.

University of Washington research shows that take-home pay for low-income workers fell dramatically when the city moved to the $13 mark in 2015. Businesses responded by reducing the number of hours employees work, in order to pay for the increased labor costs. "The lost income associated with the hours reductions exceeds the gain [in hourly rates]," the report says. "The average low-wage employee was paid $1,897 per month. 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."

The university study also found that the baseline wage did not help as many low-wage workers as forecast because "most affected low-wage workers were already earning more than the statutory minimum at baseline."

The Democratic Party, in concert with labor unions and radical groups, has pushed for a minimum wage raise for several years. For example, the $15 minimum wage was added to its 2016 party platform, under the guidance of Rep. Keith Ellison of Minnesota and former Congressman Barney Frank. Even Hillary Clinton had misgivings about the effect the new minimum wage would have on hiring. However, she initially backed a $12 rate at the beginning of the presidential campaign.

According to their party platform, "Democrats believe that the current minimum wage is a starvation wage and must be increased to a living wage. No one who works full time should have to raise a family in poverty. We believe that Americans should earn at least $15 an hour and have the right to form or join a union."

Besides Seattle, the $15 hourly rate has spread to other major metropolitan areas in New York, California, Massachusetts, and Washington, D.C.


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