Seattle Minimum Wage Study (Part 3): Tell Me Why I’m Wrong, Please!

post by Zvi · 2017-08-17T23:56:48.000Z · LW · GW · 0 comments

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Previously: On the Seattle Minimum Wage Study (part 1), On the Seattle Minimum Wage Study (part 2)

To summarize the finding of my previous two part analysis:

There was a study of the recent raising of the Seattle minimum wage and its effects on low wage workers. Everyone who wrote about the paper thought that it showed that the rise in the minimum wage severely hurt the hours and pay of lower wage workers, or thought it was a bad study and should be ignored.

The numbers seemed odd to me, so I took a closer look. I found what appears to me to be a fundamental error. During this period, overall wages in Seattle rose by 13.3%. If you raise the threshold for ‘low-wage worker’ by 13.3% between the two time periods, all bad effects from the minimum wage disappear, it looks like nothing bad happened, and low wage workers likely benefited. It also presumably didn’t hurt Seattle much, since it was booming the whole time.

If anything, the study seems to be providing evidence that, at least in some situations, raising the minimum wage is good, rather than it being bad. It’s still weak evidence, because Seattle was unusually well situated to handle the change, but it seems important. It also seems like a lot of people have a strong interest in shouting this result from the rooftops, if true.

Several hundred people saw the posts in question, and I got two good detailed comments, both of which essentially agreed with the analysis.

No one told me where I went wrong.

So while I work on harder, more substantive posts that I’m a bit stuck on at the moment, I’m going to ask: If no one’s going to start shouting the result from the rooftops, can someone please explain why I’m wrong here?

 

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