I’ve heard some success stories about Seattle raising their minimum wage to $15 an hour. Here’s the thing though, the Seattle minimum wage is NOT $15 an hour. Its planned to be a scheduled increase, and even then, that is divided into different “schedules”, which are presented below.
Schedule 1 employers (more than 500 employees in the U.S.)
$15.00 by January 1, 2017
Schedule 1 employers (more than 500 employees in the U.S.) with medical benefits
$15.00 by January 1, 2018
Schedule 2 employers (500 or fewer employees in the U.S.)
$15.00 by January 1, 2021
Schedule 2 employers (500 or fewer employees in the U.S.) with minimum compensation
$15.00 by January 1, 2019
As you can see, the minimum wage won’t be raised for everyone until 2021, 6 years from now, and at the latest, it won’t be raised for anyone until 2017.
Nonetheless, what these “success” stories are doing is comparing the short-run effects of a (not-yet existent!) minimum wage. The long-run effects are the ones that people should be looking at, as Daniel Aaronson, Eric French and Isaac Sorkin explain: “much of the recent research suggesting that minimum-wage hikes barely reduce the number of jobs in the short run should be taken with caution. The longer-run disemployment effects are potentially large.”
So we’ll have to wait at least a decade (2021-2026 is a fair enough long-run) in order to accurately calculate the long-run effects of the $15 Seattle minimum wage on ALL workers.
I’ll be posting more about my thoughts on the minimum wage once I get done with my series on immigration.