This is EXACTLY what economic theory would predict: if you raise the minimum wage you will get some combination of increased unemployment and a reduction in the other margins of compensation. Are these two women really better off? Its also why JUST looking at employment effects does not tell the whole story of the cost of having/raising the minimum wage. While attending an event at a SeaTac hotel last week, I met two women who receive the $15/hour minimum wage. SeaTac has implemented the new law on Jan. 1. I met the women while they were working. One was a waitress and the other was cleaning the hallway. “Are you happy with the $15 wage?” I asked the full-time cleaning lady. “It sounds good, but it’s not good,” the woman said. “Why?” I asked. “I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added. The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay. What else? I asked. “I have to pay for parking,” she said. Also see this story which indicates some steps folks were taking within the first month and also describes the predictable increase in the quantity of labor supplied in response to the higher wage in that market. seattletimes/html/localnews/2022905775_seatacprop1xml.html
Posted on: Sat, 31 May 2014 13:55:14 +0000