Is dooming her beneficiaries to unemployment, if history matters, said Bruce Ramsey last December;
What is the likely effect of the rise in the minimum wage in SeaTac to $15, or some other increase? I was cleaning out my paper files preparatory to retirement, and under “Minimum Wage” was a study dated January 1991 from the University of Washington’s Northwest Policy Center. The principal investigator was James McIntire, who is now Washington state treasurer, the official responsible for floating state bond issues on Wall Street.
The study’s aim was to judge the effect of a 1968 state ballot measure that increased Washington’s minimum wage in two steps to $4.25 ($7.59 in today’s money) by January 1990. The effective minimum in Washington for most workers had been the federal minimum of $3.35.
This was a 27 percent increase over two years, which was fairly big, but less than half the 63 percent increase between the 2013 state minimum of $9.19 and the 2014 SeaTac minimum of $15.McIntyre, like most State officials in Washington, is a Democrat. But, apparently, one who stayed awake in economics class;
In its study, McIntire’s team surveyed more than 1,000 employers and interviewed more than 500 affected employees. It also looked at state Employment Security data.
More than 100,000 employees got wage increases in 1989 and 1990 because of the rise in Washington’s legal minimum. Over two years, employers reported laying off 11,700 workers “as a result of the minimum wage increases.” Employees reported about the same number.
In other words, for every 10 workers who got a raise under the law, one worker somewhere was laid off. The most-affected employers were restaurants and bars (the law also eliminated the tip credit), particularly in the lower-wage parts of the state. [Italics in the original.]So, two decades ago, the state of Washington ran an experiment, and the Laws of Supply and Demand were still operative.