The lot of Seattle’s lowest-paid workers improved following the city’s minimum wage increase to $11 in 2015, but that was more due to the robust regional economy than the wage hike itself, according to a research team at the 91̽»¨’s .

Although the ordinance appears to have boosted wages for the city’s lowest-paid workers, the benefits of the increase may have been partly offset by fewer hours worked per person and slightly less overall employment, the research team found. Estimated income gains for the average worker were modest – on the order of a few dollars a week – and sensitive to methodological choices.

The City of Seattle passed its in June of 2014, and that December commissioned the 91̽»¨team to conduct a five-year study of the law’s impacts. The ongoing research is led by professors and with , associate professor in the 91̽»¨, and other co-authors from the Evans School, the and the Washington Employment Security Department.

The team presented its in an update to the council this morning (July 25).

The ordinance took effect April 1, 2015, raising the minimum hourly wage from $9.47 to $11. Under the law, businesses with fewer than 500 employees are scheduled to reach the $15 an hour wage in 2021. Employers with 500 or more employees, either in Seattle or nationally, will reach that level in three years, or 2017.

The challenge of this report, Vigdor said, was to isolate the effects of the wage increase ordinance from all other concurrent economic factors, chiefly the surging regional economy. This enables the researchers to compare Seattle to what it might look like today had the minimum wage ordinance never happened — knowing, too, that the strong economy was slowly pushing wages up regardless of the ordinance.

For their research, the team used employment, hours and earnings records from the Washington Employment Security Division going back to 2005 to create a model of how the local labor market works. They also viewed data on other nearby regions that did not increase their minimum wage, to better understand how rising property values, expanding tech employment and even the weather might have influenced what the team observed in the city itself.

The research sought to answer two questions: What has happened to Seattle’s labor market since passage of the minimum wage ordinance? And more crucially, what has been the effect of that ordinance on the labor market?

The first question involves simple comparisons of yesterday with today. But, Vigor said, “To imagine what a higher minimum wage might accomplish in a region not enjoying a significant economic boom, or what might happen in Seattle next year if the boom should wear off, the second question is the only one that matters.”

The researchers found that:

• Seattle’s lowest-paid workers saw larger-than-usual paychecks in late 2015, but at most, only 25 percent of the observed income gains — a few dollars a week — can be attributed to the higher wage.

• Businesses relying heavily on low-wage staff showed signs of cutting back, though they too benefited from the strong economy. They added jobs at about the same rate as businesses outside the city, but employees’ working hours in the city lagged by an average of about one hour per employee per week.

• Even amid a relative boom, Seattle’s lowest-wage earners show signs of “lagging behind” a control group drawn from other parts of the state. The employment rate was down about 1 percentage point for workers who earned less than $11 an hour in mid-2014; their average hours declined, and the proportion switching from jobs in the city to elsewhere ticked upward by 2 to 3 percent.

“Our report indicates that Seattle’s track record after increasing the minimum wage is neither as negative as some had feared nor as positive as some had hoped,” Vigdor said. “While the vibrant local economy is boosting employment and incomes up and down the economic ladder, the positive effects of a higher minimum wage are being at least partly offset by cutbacks in hours.”

The researchers cautioned, however, that their findings are statistical averages that could mask distinctions among different types of workers. The findings address only the short-run impact of Seattle’s wage hike to $11 an hour and don’t reflect the full range of experiences for thousands of individual workers in the Seattle economy.

Next, the research team plans to incorporate more detailed information about workers by linking employment records to other state databases. This will provide the capacity to determine, for instance, whether the workers benefiting most from higher minimum wages are more likely to be living in poverty.

Other coming work will include:

• Extending the analysis to Seattle’s second wage increase, in April 2016, when the ordinance began distinguishing between businesses of different sizes
• Collecting additional survey information from Seattle businesses and conducting more interviews with a sample of workers tracked since early 2015.

The team expects to make its next report to the city in September; that report will focus on how the minimum wage hike has impacted Seattle nonprofit organizations.

91̽»¨co-investigators on the ongoing study are of the UW’s and , and of the Evans School. Other co-investigators are Scott Bailey and Anneliese Vance-Sherman of the state employment security department.

The research was funded in part by the Eunice Kennedy Shriver National Institute of Child Health and Human Development grant to the UW’s . Funding also was provided by the Laura and John Arnold Foundation, the Russell Sage Foundation and the City of Seattle.

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For more information, contact the research team at mwage@uw.edu or J. Paul Blake, Evans School director of media and external relations, at 206-543-3958 or jpblake@uw.edu.

Grant # R24 HD042828

But a year after the law’s April 2015 implementation, the study indicates such increases don’t seem to be happening.

The interdisciplinary team, centered in the surveyed employers and workers and scanned area commodity and service prices. The team’s report found “little or no evidence” of price increases in Seattle relative to other areas, its report states.

The City of Seattle’s was adopted in June of 2014, and began taking effect on April 1, 2015. Under the law, businesses with fewer than 500 employees will reach the $15 an hour wage in seven years, or 2021. Employers with 500 or more employees (either in Seattle or nationally) will reach that level in three years.

When approving the ordinance, the Seattle City Council also commissioned a thorough study of the law’s impacts, and sealed a contract with the 91̽»¨in December 2014. The study is led by Evans School professors and with , associate professor in the 91̽»¨, and other co-authors from the Evans School and the . Two economists from the Washington Employment Security Department are also on the team.

The researchers released April 18 in a presentation to the Seattle City Council.

The study, conducted between January and May 2015, surveyed 567 randomly selected Seattle employers as well as 55 workers, asking their awareness of and feelings about its expected and actual effects, to establish a baseline for that information.

Responses indicate that nearly all employers knew about the new law, though many were uncertain about its implementation. Many employers expressed hope the higher wages will improve both worker morale and boost job applications, though they also doubt it will improve individual employee productivity among minimum wage workers.

Sixty-two percent of employers said they expected to raise prices of goods and services to accommodate the higher wages brought by the law. Ten percent of the employers believed incorrectly that the ordinance would force their business to move to a $15 wage immediately upon implementation.

But in an analysis of area prices over time, done through a combination of “web scraping” and in-person visits to grocery stores, restaurants and other retail locations, such price increases were not in evidence.

“Our preliminary analysis of grocery, retail and rent prices has found little or no evidence of price increases in Seattle relative to the surrounding area,” the team concluded.

Workers, for their part — many of whom reported struggling to make ends meet despite community and government assistance — responded to the survey wondering doubtfully if the wage increases would truly improve their financial situation. Most knew about the law but many were uncertain of details, the study found.

“Today’s report documents both the hopes and fears that workers and business managers expressed as Seattle began its initiative to raise the minimum wage,” said Vigdor. “Business owners are hopeful that small changes to their operation — such as small price increases — will keep them in the black.

“Workers are hopeful about the promise of greater income, but harbor few illusions about the potential for price increases, or reductions in government benefits, to eat away at these gains.”

The team’s subsequent study on the Seattle minimum wage law will include:

• A second round of worker interviews this spring to learn more about its effects on work and family life, and more in spring of 2017 if funding allows.
• Analysis this spring of employment security data on employment, hours, and earnings for a report to be released this summer
• Another full survey of employers and workers in 2017.
• A brief follow-up survey of employers this summer to depict changes over time.
• Continued study of prices, expanding to the areas outside Seattle.
• A study this fall on the impact of the ordinance on Seattle nonprofits, through surveys and interviews.

“From its inception, this study has sought to do more than track employment figures,” Vigdor said. “Our team hopes to develop a full understanding of how businesses and nonprofits change their practices to accommodate higher wages, and of whether a higher minimum wage meaningfully transforms lives. Today’s report showcases that broader approach.”

Vigdor and Long’s co-investigators on the Seattle Minimum Wage Study are of the UW’s and , and of the Evans School. Other co-investigators are Scott Bailey and Anneliese Vance-Sherman of the state employment security department.

The research was funded in part by the Eunice Kennedy Shriver National Institute of Child Health and Human Development grant to the UW’s . Funding also was provided by the Laura and John Arnold Foundation, the Russell Sage Foundation and the City of Seattle.

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For more information, contact the research team at mwage@uw.edu or J. Paul Blake, Evans School director of media and external relations, at 206-543-3958 or jpblake@uw.edu.

Grant # R24 HD042828

Faculty from the 91̽»¨’s schools of public affairs, public health and social work are teaming up for , a five-year research project to learn that and more.

An passed by the Seattle City Council in June 2014 mandates a citywide minimum wage increase to $11 an hour on April 1 that will grow to $15 an hour by the year 2022. The council also resolved to evaluate the impact of that ordinance and is contracting with 91̽»¨researchers and others for that work.

, professor in the , will be principal investigator on the project along with , also of the Evans School, and of the .

91̽»¨co-investigators are , and of the Evans School and of the . Other co-investigators are Scott Bailey and Anneliese Vance-Sherman of the Washington Employment Security Department.

“Our goal is to make this a data-driven conversation about what is the good that is being done, what is the harm that is being done, and are we happy with that tradeoff,” Vigdor in a recent interview.

The study will be a multifaceted evaluation of the wage ordinance’s effects on workers, employers and the local economy. Its several components will include an employer survey and in-depth study of the effect on families as well as on regional pricing and administrative and census data.

The researchers listed fundamental questions about the higher minimum wage to be investigated in the research:

• What is its impact on workers, their families, employers and the community?
• Does it impact employment and earnings among low-wage workers?
• Does it affect overall employment, business longevity or the mix of firms that do business in Seattle?
• How does it affect consumer prices?
• Does it improve quality of life measures, including health, nutrition and daily family life?
• Does it affect public assistance program eligibility and benefits received?
• Do nonprofit service organizations respond to higher wages by cutting back on services to vulnerable families?
• How do low-income families and employers experience the implementation of the policy and how do they perceive its benefits and costs?
• How do businesses adapt to higher labor costs?

The project will build on by Plotnick, Long and , also of the Evans School, on who would be affected by the wage increase. That was released in March 2014, prior to the passage of the ordinance.

The researchers will provide the city of Seattle regular updates on their study as the wage increases are implemented.

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For general inquiries about the Seattle Minimum Wage Study, write mwage@uw.edu. Principal investigator Vigdor is at 206-616-4436 or jvigdor@uw.edu; Long at 206-543-3787 or marklong@uw.edu; Romich at romich@uw.edu or 206-616-6121.