Published on December 15, 2021
University of Washington researchers have been conducting studies into various facets of Seattle’s $15-an-hour minimum wage for years. For their latest study, they looked into how the higher minimum wage has addressed (or failed to address) income inequality.
Seattle minimum wage will increase on Jan. 1
The study found that over a 12-year period, inequality among lower-income workers was “modestly reduced,” while “Seattle’s minimum wage did little to offset widening inequality” when looking at all combined workers.
“The impact estimates as well as the simulation results suggest that local minimum wage laws are not likely to substantially reduce earnings inequality,” the study reads. “While wage gaps are likely to diminish, as mandated by law, the ability of firms to substitute away from low‐skilled workers may offset wage gains, leaving earnings inequality unchanged.”
It goes on to note that there’s still a level of uncertainty as to whether the same trends would play out in cities implementing their own $15 minimum wage ordinances.
“Similar results may not hold for other cities enacting such laws,” it theorizes.
Past research into Seattle’s minimum wage laws has come to a variety of conclusions. That includes another UW study from 2019 that found businesses will most often respond to mandated wage increases by reducing their staffing numbers and hours. A subsequent study looked into how phasing in a $15 minimum wage affects grocery prices, finding little to no change in Seattle.
Seattle first began phasing in its $15 minimum wage ordinance in April 2015. Starting in 2022, the city’s minimum wage will increase to $17.27 an hour for companies with more than 500 employees. For smaller companies (500 or fewer employees) that don’t pay least $1.52/hour toward the employee’s medical benefits and/or where the employee doesn’t earn at least $1.52/hour in tips, the minimum wage will also be $17.27/hour.
For those that do pay medical benefits or where tips exceed $1.52/hour, the new minimum wage will be $15.75/hour.
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Originally written by MyNorthwest Staff for MyNorthwest