For the past several years, the nation has been locked in heated debate about raising the minimum wage. Many argue for workers’ rights and that the current minimum wage is not sustainable. Others argue that a $15 minimum wage is simply not possible for businesses. Forcing such a measure would result in a widespread loss of jobs and decreased income, thus harming workers even more.
Seattle is just one city that has stepped into the very center of this battle. In 2015, the city raised the minimum wage from the state level of $9.47 to between $10 and $11, depending on the size of the business and the availability of benefits. Then, in 2016, it raised minimum wage again to up to $13. This increase will continue incrementally in the coming years until eventually all businesses have adopted a $15 minimum wage.
In recent weeks, two organizations released research studies concerning this wage hike in Seattle. The University of California at Berkeley’s Institute for Research on Labor and Employment published the first study last week. The University of Washington’s Evans School of Public Policy and Governance published the second study earlier this week. Both aimed to address the correlations between increasing minimum wage and subsequent employment levels and income. However, both studies produced extremely different results.
What does this mean?
It is important to note that neither of these studies are conclusive. In both cases, the researchers conducted their studies using drastically different data sets and testing for different outcomes. Many variables may have pushed the conclusions one way or another. For example, the study from the University of Washington used more detailed data collected from the state but also excluded multi-site businesses from the analysis, therefore excluding many chain restaurants from the study. This does not make the results insignificant, though – the effects that occurred in the “single-site” businesses included in the study could potentially be mirrored in chains as well. Likewise, the Berkeley study focused exclusively on the food service industry, providing a smaller and less detailed data set but producing more relevant results for restaurant operators.
It’s difficult to discern the exact implications of this research. Major news articles have either heralded and denounced both of these studies for one reason or another. Unfortunately for operators, there is still no clear signal as to what the future may hold for wage increases. However, it is extremely important to stay informed and continue paying close attention to the situation in Seattle and other major cities that are raising wages. Only time will be able to provide more answers.
Like this infographic? You should check out the article, “Has Restaurant Turnover Finally Reached a Plateau?” for insights on recruiting difficulties, employment levels, and current index trends.
