December 3, 2021

New Evidence from the Seattle Minimum Wage Study

In 2014, Seattle passed a minimum wage law that raised the city’s minimum wage from the state’s minimum wage of $9.47 to $15, phased-in over several years.  Mayor Murray and his Income Inequality Advisory Committee developed the minimum wage law as a strategy to lower income inequality. Evans School of Public Policy & Governance faculty Mark C. Long examines earnings inequality in the city over the first three years of the law in an article, “Seattle’s Local Minimum Wage and Earnings Inequality” published in November in Economic Inquiry. Long analyzes State of Washington administrative data to assess whether Seattle’s minimum wage ordinance led to a reduction in earning inequality among the city’s workers from 2014 to 2017, a period when the local minimum phased in to $13 an hour.

Findings show that inequality among workers who earned less than the city’s median hourly wage ($26.42) was reduced modestly as workers in the lowest wage jobs saw large increases in hourly wages. There is no evidence to suggest, however, that Seattle’s minimum wage lowered the overall level of earnings inequality across all workers in the city, which substantially widened during this period. Further, Long notes that “the results in this report pertain to earnings inequality of those employed and thus do not include any additional increase in inequality produced by a reduction in the number of employed low-skilled workers.”

Findings from Long’s study are consistent with another article recently published by Evans School and University of Washington scholars entitled, “Minimum Wage Increases and Low-Wage Employment: Evidence from Seattle”, in the American Economic Journal: Economic Policy. In this paper, the study team examines the labor market effects of the Seattle Minimum Wage Ordinance when the citywide minimum was set to $13 an hour in 2017. Findings indicates that those earning less than $19 an hour saw wages rise by 3.4% once the city’s minimum wage was $13, while experiencing a 7.0% decrease in hours worked.

Low-wage workers employed before the policy took effect saw their wages rise more than their hours fell, yielding a net increase of around $12 per week. This increase in pay was larger for low-wage workers with more prior labor market experience. The team found evidence of a decline in the rate of hiring of low-wage workers who were not previously employed in the state of Washington as the minimum wage in the city reached $13 an hour.

Mark C. Long – 2021 – “Seattle’s Local Minimum Wage and Earnings Inequality” in Economic Inquiry

Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, and Hilary Wething – 2021 – “Minimum Wage Increases and Low-Wage Employment: Evidence from Seattle” in the American Economic Journal: Economic Policy