Minimum wage muddle: Part 1 – the evolving SeaTac story and a border tale

The Seattle Times takes a look at the effects of SeaTac Proposition 1 and finds, well, not much yet.

Six weeks after the new hourly minimum standard took effect at some hotels and parking lots in SeaTac, proponents and opponents alike say any evidence to gauge its impact is still anecdotal.

At the Clarion Hotel off International Boulevard, a sit-down restaurant has been shuttered, though it might soon be replaced by a less-labor-intensive cafe. The nearby Cedarbrook Lodge, by contrast, is undergoing a $16 million expansion.

Other businesses have adjusted in ways that run the gamut from putting more work in the hands of managers, to instituting a small “living-wage surcharge” for a daily parking space near the airport.

That’s pretty much what we expected. Yes, ultimately we believe jobs will be lost, particularly for young inexperienced workers, and job creation will slow. But not overnight. In our report we cite work by economists Jonathan Meer and Jeremy West.

In fact, they report

The most prominent employment ef- fect of minimum wage laws is a de- cline in the hiring of new employees. . . . This phenomenon is particularly important given the evidence that minimum wage jobs often result in relatively rapid transitions to higher- paying jobs.

The story offers some useful initial insights. For now, though, let’s give a liberal economist who generally backs higher minimum wages his due.

Arindrajit Dube, associate professor of economics at the University of Massachusetts-Amherst, predicts the lessons learned from SeaTac will take a long time to decipher.

Yes.

The New York Times offers a cross-border look at the minimum wage differential between Idaho and Oregon. The higher wage in Oregon has led some Idahoans to cross the border for work. While the story focuses on the upside of the higher wage for workers lucky enough to land a job, I thought this anecdote was instructive. Mackey’s is an Oregon restaurant and bar to which Carly Lynch commutes.

But Mackey’s owners also told her that she would have to work harder than before for that money. Higher labor costs meant getting rid of the dishwasher, for one thing, said Angena Grove, who owns the restaurant with her husband, Shawn. And whereas Ms. Lynch covered three tables at a time in her old Idaho job, Mackey’s waitresses, with the owners helping out, cover five.

“You work for the money,” Ms. Lynch said.

One dishwasher down and fewer waitresses working more tables. Sounds like job loss to me.

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