Contrary to the common right-wing talking point that raising the minimum wage leads to economic disaster, a recent study conducted by the University of California Berkeley has found just the opposite.
The UC Berkeley researchers used Seattle, which instituted a $15-per-hour minimum wage on January 1 of this year, as a case study to examine the effects of increasing the minimum wage.
The researchers used the rest of Washington’s economy as a control to predict what would have happened in Seattle if there hadn’t been the minimum wage increase.
The study found that since the new law went into effect, wages have increased, unemployment has decreased and the total number of hours worked is up, meaning employers aren't cutting hours to account for the higher minimum wage.
This was true even in the restaurant industry, including fast food restaurants, which conservatives have often said would be crippled by an increased minimum wage.
These trends and data are meaningful, because Seattle didn’t just suddenly raise its minimum wage 6 months ago, they’ve been raising it slowly over the past several years until it got to $15-per-hour at the beginning of this year, and we’ve seen progressive improvements along the way.
The study found that instead of the new minimum wage making it harder for businesses to find low-skill employees, it’s causing surrounding communities to raise their wages to compete with the new opportunities for workers in Seattle. It turns out companies struggle when they’re not paying their workers enough, not the other way around.
Much of the benefits of raising the minimum wage make perfect sense intuitively. If people have more money to spend because wages are raised, that money will be recycled back into the economy as low-wage workers gain the ability to purchase consumer goods they otherwise may not have been able to.
In Seattle, as the minimum wage has increased, more people are working, they’re working more, and they’re being paid more, all of which is great for the overall health of the economy.
All the dire warnings from conservatives about businesses closing and widespread unemployment have simply not come to fruition.
The broader takeaway here is that Seattle’s $15-per-hour experiment is working. It’s already showing tangible benefits that suggest raising the minimum wage a reasonable amount relative to the cost of living has broad economic benefits and generally improves people’s lives.