What happens when you actually check the Fraser Institute's citations?
What happens to the Fraser Institute’s conclusions when you actually check their citations?
According to a new blog post on the right-wing think tank’s website, a recent study looking at the effects of increasing the minimum wage from $9.47/hour to $11/hour in Seattle shows the city’s “minimum wage experiment” has “failed.”
The Fraser Institute claims a recent academic study by researchers at the University of Washington offers “sobering evidence for minimum wage proponents,” which they say proves “Seattle’s minimum wage policy thus far has been a failure” and foreshadows a dystopian future for ordinary Seattleites:
“Over time, minimum wage hikes will discourage future job growth and employers will seek ways to reduce the artificially higher labour costs by cutting back on hours, providing less on-the-job training, and switching to more automation.”
One problem, though: the report they’ve cited doesn’t really say that.
Although the Fraser Institute is correct in pointing out that job growth in Seattle has been driven by a strong economy rather than by the minimum wage increase, it also shows raising the minimum wage has not resulted in a “large increase in the number of unemployed workers” either – a claim the Fraser Institute has made in previous reports on the minimum wage. The study actually found employment in low-wage jobs impacted by raising the minimum wage still increased by 2.6%.
And although the Fraser Institute suggests “the number of hours worked by low-wage workers fell due to the minimum wage hike,” they don’t mention the study actually says “hours worked increased” (although on average the increase was 19 minutes per week less than increases in other areas of Washington state).
And here are a few other things the study – which the Fraser Institute points to as proof that Seattle’s minimum wage increase is a “failure” – actually says:
• “Job growth is clearly driven by increased opportunities for higher-wage workers, but businesses relying on low-wage labour showed better-than-average growth as well.”
• “In the 18 months after the Seattle Minimum Wage Ordinance passed, the City of Seattle’s lowest-paid workers experienced a significant increase in wages,” estimating the minimum wage increase is responsible for half those gains alone.
• “We do not find compelling evidence that the minimum wage has caused significant increases in business failure rates. Moreover, if there has been any increase in business closings caused by the Minimum Wage Ordinance, it has been more than offset by an increase in business openings.”
This is the Fraser Institute’s definition of failure?
Commenting on the same study in the Seattle Times last week, experts from the Washington State Budget & Policy Center and the National Employment Law Project also had a very different take on the study’s results:
“The University of Washington team studying the results of the minimum wage last week quantified that success: Workers are getting paid more, we’ve added jobs, and new businesses continue to open their doors in Seattle.
The new study found that ‘Seattle’s labor market is in great shape,’ with job growth triple the national average. It found that the first step in the increase, which went into effect April 1, 2015, and raised wages from $9.47 to $10 for workers at small businesses and to $11 at large businesses, meant low-wage workers brought home more in quarterly wages — raises that would translate into more than a 20 percent increase in their annual wages.”
And despite what the Fraser Institute says, they underline that Seattle’s “economy is growing and there’s been no massive closure of businesses.”