In Seattle, minimum wage went up, but unemployment went down (real estate, 2015)

[CrazyDonkey]

Seattle Minimum Wage Experiment is Over - The Big Picture

The unemployment rate in the city of Seattle – the tip of the spear when it comes to minimum wage experiments – has now hit a new cycle low of 3.4%, as the city continues to thrive. I’m not sure what else there is to say at this point. The doomsayers were wrong. The sky has not fallen. The restaurant business, by all accounts, is booming (in fact, probably reaching a saturation point when one looks at eateries per capita). I think it’s safe to say we’ve got enough data – over almost two years now – to declare that Seattle has not suffered adverse consequences from its increases in the minimum wage, and has certainly not experienced the dire effects foretold by the anti-min wage crowd.

[homesinseattle]

Great post Crazy. This is excellent news!

[CrazyDonkey]

The "trickle-downers" proven wrong, again? Don't let reality interfere with a truly held "conviction"...

Now, I'm more of a "siphon-upper"...

[robrath]

Isn't the full effect of the law suppose to take place by 2021? A bit too early to call it in 2016 isn't it?

[Sockeye66]

The $15 min wage isn't there yet. Depending on size of business and if offering med benefits the first $15 level isn't met until 1/17, the last isn't until 1/21.

The Seattle.gov page- $15 Minimum Wage - Mayor Murray

I live and work in Seattle, I can say I'm feeling the higher costs at my favorite pubs and restaurants.

[noah]

Many of us in the middle class are struggling quite a bit, we didn't see double digit wage increases when the minimum wage went up but sure saw the increases being passed on to consumers in various places. Its sad when a white collar professional with a CPA license is getting priced out of starter homes. Even with record wage growth averaging 3.5% it just can't keep up with 14% rent/real estate increases and like history has shown us in the past it means the increases will stop or reverse when the rent to income gap becomes too wide. In the mean time its becoming harder and harder even to afford a 900 sq ft rental house.

[perigee]

I am one of the biggest supporters of higher min. wages, you could even say I support it bigly, but Seattle in a boom cycle is a unique situation and this might be one of the boomiest boom periods that the city has experienced. Generally, I believe that giving poor people more money is a great way to stimulate the economy, I am hesitate to use Seattle as an example, at least till someone nerdier then me crunches the numbers.

My biggest worry is that Seattle model doesn't work in highly depressed areas in red states and that our movement gets setback. It's probably highly localized on what the sweet spot is for wages, labor and economic growth, I mean unless the federal government is willing to step in like they did during the Great Depression.

That being said, it's way past time for the federal min. wage to be raised.

[Sockeye66]

Good points by Noah and perigee.

Seattle is an outlier, much of the boom isn't coming from low wage jobs and earners making way more than my middle class salary. Maybe I can't afford to eat out as frequently but plenty of others can.

Thing is, the wage bumps are going to greater felt by mid and low wage workers, not so much by tech boomers rolling in.

[CrazyDonkey]

Except opponents were predicting that we'd already be seeing a downturn in employment, as the mere prospect of a higher minimum wage would discourage investment. That's clearly not happening. That doesn't mean, of course, that a minimum wage can't go up too fast or end up being too high. I've noticed more empty storefronts along Market Street in Ballard, for instance, although that could be due to higher rents more than higher wages. Or it could be the Amazon-Effect on run-of-the-mill retail. The mix of businesses could also simply be changing, from lower-margin to higher-margin goods and services.

It can be argued that a $15 minimum wage is perfectly appropriate in a high-COL "boom" city like Seattle. It allows workers who bus our tables, wash our dishes, and fry our burgers, etc., to afford digs in, or transportation in and out of, the city, put food on the table and clothes on their back, pay for medicine and healthcare, etc. Yes, wages might go up anyway as slack is taken up in the labor market, but not necessarily for everyone - and when the inevitable "downturn" comes, a floor would be set below which wages would not fall, with spending, and taxes paid, by those workers helping to soften the decline.

[henry1]

I have seen the effect of the so-called 15 dollar wage here in Ca where I go for my hospital visits in L.a. Area I have seen some of the new self order kiosk sets ups beening installed in some of the places around the hospital area .
I got to talking to one of the owners of the place there he told that labor cost alone in the place was driving him to think more terms of using Robots and trimming as much 0f the cost of labor out of his budget that he could