Anneliese Vance-Sherman is Employment Security’s regional labor economist for Whatcom, Skagit, Snohomish, King, San Juan and Island counties.
Over the past couple years, the issue of raising the minimum wage has ignited debate locally and nationally. Voters in the City of SeaTac approved a $15 per hour minimum wage that took effect in 2014. Shortly after, the City of Seattle approved a new minimum wage that will reach $15 per hour (adjusted for inflation) to be phased in over several years. The Seattle ordinance went into effect on April 1, 2015.
Following the announcement in Seattle, a number of other governments, businesses and non-government organizations throughout Washington and the U.S. have jumped into the debate, bringing it to a national audience.
Any policy change can have a variety of intended and unintended consequences, and there is no shortage of theories to support both proponents and opponents in this debate.
On the same day the Seattle ordinance was passed, the City Council passed a resolution to study the effects of the new law. The city awarded an interdisciplinary team of researchers at the University of Washington to conduct the multi-faceted study. The team is taking a neutral stance; they aren’t looking to support one theory or another, but to observe actions taken in response to the change, and the way these actions ripple into Seattle-area communities.
Two regional economists, Scott Bailey and I, have been included in the research team. Employment and wage data that the Employment Security Department collects through the unemployment insurance system is a crucial resource for capturing the effects of regulatory change on business viability and employment.
Scott and I will analyze wage and employment data during the study period to help identify possible changes in employment levels, wages and hours worked, as well as births and deaths of businesses. If businesses close, lay off workers or reduce hours, these changes will be reflected in the unemployment data. Likewise, if wages rise, businesses open or employment increases, these changes also will show up.
Regardless of what theories one espouses in the debate, this study is an exciting opportunity from a research standpoint. Seattle’s operating environment has changed relative to its immediate neighbors and the rest of the state, creating a great opportunity for evidence-based research. Different industries are likely to feel the effects of this change in different ways, and businesses and workers will make a variety of decisions in response, based on their unique situations and perceptions of the changing environment.
We’ll keep an eye on what unfolds and will keep you posted. Also, see an April op-ed in the Seattle Times about the study.