A new study released by Seattle’s city government is showing that any benefits that were supposed to go to workers from he 2014 wage hike, which raised the minimum wage to $13, are actually being wasted.
Due to the increase in minimum wage, many employers have cut hours or positions. So while the working class was supposed to be making more, it actually evened out.
The study found that the new increase in hourly pay actually reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent.
The Daily Mail reports:
“Consequently, total payroll fell for such jobs,” the study states. “Implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016.”
There is evidence that attributes more modest effects in regards to the first wage increase. But the recent phase-in had a more direct and harsher effect on the low-wage workers. It reduced the number of low-wage jobs and the hours of retained employees.
Businesses that pay their employees minimum wage tend to focus on how to keep their assets high and liabilities low, in regards to wages. And they do this by playing the same game as the government.
Seattle rose the minimum wage too high too quickly without giving the city time to adjust and operate under the new conditions.
This will serve as another example as to how other states should pay closer attention to how their government and private businesses interact with each other in order to reach a successful middle ground that works with both entities.
Analysts are now saying that Seattle raised its minimum wage too quickly, without giving employers a say, or any time to adjust.
This is what led to employers creating cuts.