by Dr. Terry Stoops
Director of the Center for Effective Education, John Locke Foundation
Researchers from the University of Washington have released another study on the impact of minimum wage increases in Seattle. In an NBER study released today, Ekaterina Jardim and her colleagues write,
Our preferred estimates suggest that the Seattle Minimum Wage Ordinance caused hours worked by low-skilled workers (i.e., those earning under $19 per hour) to fall by 9.4% during the three quarters when the minimum wage was $13 per hour, resulting in a loss of 3.5 million hours worked per calendar quarter. Alternative estimates show the number of low-wage jobs declined by 6.8%, which represents a loss of more than 5,000 jobs. These estimates are robust to cutoffs other than $19. A 3.1% increase in wages in jobs that paid less than $19 coupled with a 9.4% loss in hours yields a labor demand elasticity of roughly -3.0, and this large elasticity estimate is robust to other cutoffs.
FiveThirtyEight has a good overview of the latest University of Washington study and previous research on the subject.