The Ugly Truth

Seattle Reveals The Ugly Truth About The $15 Minimum Wage Movement

A minimum wage hike back in 2016 in Seattle resulted in lower, not higher, pay for low-wage earners, revealing the ugly truth of the $15 minimum wage movement -- a “living wage” isn’t an entitlement, it must be earned by delivering value to the consumer.

That’s the key finding of a recently released study by a team of economists at the University of Washington. “Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent,” writethe authors of the study. “Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase.”

The minimum wage movement has a pretty side and an ugly side. The pretty side is about the promise it makes to low wage earners—a “living wage.” The ugly side is the way it wants to deliver on this promise -- by disconnecting pay from performance, turning business enterprises into welfare agencies.

That’s a radical idea that can be traced back to Maoist China and the Soviet Union, where corporations were "units" within a centrally planned economy; and in countries that fell in love with these systems -- like pre-crisis Greece, where government bureaucrats and union bosses rather than markets set wages.

https://www.forbes.com/sites/panosmourdoukoutas/2017/06/28/seattle-revea...

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