Posts filed under “Wages & Income”
The City of Seattle’s minimum wage is now $11, going up to $15 for some employers by 2020. Mark Perry has posted his monthly missive on how April’s minimum wage hike is destroying restaurant employment there:
I’ve pointed out ad nauseum that this larger region is irrelevant to any discussion of the minimum wage debate. While the min wage has gone up in the City of Seattle, that may or may not have an impact on the entire — and many times larger — Seattle MSA.
The Seattle-Tacoma-Bellevue Metropolitan Statistical Area (MSA) that Perry likes to harp on is comprised of three counties – King (in which Seattle resides), Pierce, and Snohomish. The MSA has a population of some 3.6 million versus the city’s population of about 660,000. In other words, almost 3 million people, or about 72% of the total, reside (and likely work) outside the area are where the minimum wage was hiked.
To use this as the basis of a minimum wage critique is either incredibly ignorant or purposefully misleading. It does not reflect well on its authors. This inexcusable approach means that AEI has been party to what is an obviously false analysis. That is why amongst knowledgeable analysts, AEI are known as a “Stink Tank.” Everything they produce comes with the stank of its dubious validity and questionable intellectual honesty.
AEI seems to have finally figured out that obviously lying about data is going to get them called out as the fabricators they have unfortunately morphed into: The most recent post by Perry includes a disclaimer indirectly admitting this entire line of argument has been a scam. There has not been the sort of intellectual honesty where one admits error — no mea culpa like BR does — but instead a “Technical Note” at the end of the post essentially explaining why the entire post is utter nonsense. I assume AEI forced this on Perry in order to protect their already damaged reputation.
Technical Note: The BLS restaurant employment data for the Seattle MSA covers the entire metro area of 3.6 million people, while the population in the city of Seattle, which is the only part of the MSA that is subject to the eventual $15 an hour minimum wage, is only about 652,000. Therefore there are several possibilities when considering the loss of 900 restaurant jobs this year . . .
Even that is not a fair and honest disclaimer, as it posits a number of possible scenarios, rather than admit that the MSA is not relevant to the City of Seattle. We just don’t have sufficient data to draw a conclusion.
As I’ve said all along, there are simply no inferences to be made about the city from the MSA. But don’t take my word for it – here (again) is what regional economist Annaliese Vance-Sherman had to say about it:
It is not possible to draw conclusions about the city based on the MSA.
I think it is important to remember that the $15 minimum wage was a city-level ordinance. The City of Seattle falls within a large urban county (King County), which consists of 39 cities including Seattle. In turn, the county is one of three large urban counties that make up the Seattle MSA.
People from the City of Seattle are not going to drive two counties north or south, or cross the mountains, for a burger. If there is a border effect, it would be well within the MSA (well within the boundaries of the county, actually), and would register as a net zero change.
Without re-creating the chart, what could be showing up in this chart is that the recovery in Seattle has been stronger (and earlier) than the remainder of the state. The increased momentum in hiring could be representative of the relatively delayed recovery outside of the Seattle MSA.
For those who may (inexplicably) be new to this issue, here’s a map of the aforementioned tri-county area:
Sadly for Perry, who has married his original bad analysis and refuses to do any further investigating, there is more accurate data out there on employment in the state of Washington, compiled by the Employment Security Department of Washington State. At their site, we can explore and examine each of the counties on a stand alone basis.
@TBPInvictus here As those who have been following along already know, Seattle has been ground zero for the minimum wage battle, having raised it earlier this year. Critics of the higher minimum – of any minimum at all, actually – have been twisting and torturing data in a pathetic attempt to prove the higher wage…Read More
In the wake of last Friday’s October jobs release, conservative economist Stephen Moore (Heritage Foundation, Club for Growth) did a quick hit on Fox Business news with Maria “Should We Believe These Numbers?” Bartiromo (yes, she actually said that).
Before getting into the jobs numbers themselves, Moore laments the fact that sometimes, on Wall St., good news is bad news. In this case, stock futures had turned lower on the near-pristine report because of a “fear” that it will provide further inducement for the Fed to hike in December. (In this regard, I agree with Moore – good news in this case should be perceived as good news, not bad. If the economy is continuing to gain strength, that should be a positive, not a negative. That said, I still think the Fed should hold off.) Moore’s argument that more and more jobs enable a virtuous cycle (i.e. why the jobs report is good news) went like this, by my transcription. This comment begins at the 00:35 into the clip (emphasis mine):
Let me make it very clear to people cause this is very simple as an economist: If people have more jobs, if they’re earning more money, guess what? They can go into stores and they can buy more things and the value of stocks goes up.
Very simple indeed, is it not?
@TBPInvictus here. Conservative Seattle talk show host Dori Monson had the (conservative) Washington Policy Center’s (WPC) Erin Shannon on his show to discuss the city’s minimum wage initiative. Hilarity ensued. There can be no doubt that Monson hosted Shannon because of this piece that she’d authored several days ago at WPC’s website. Shannon, sadly, had…Read More
@TBPInvictus here: In a “story” that minimum wage critics couldn’t wait to latch on to, Speedway, a wholly-owned subsidiary of oil giant Marathon Petroleum, announced it would discontinue its Dunkin’ Donuts franchisee operations at about 100 locations. Although the Fortune story mentions nothing about minimum wage being an issue, a Google search using [Speedway “minimum…Read More
@TBPInvictus Moe and Larry on Seattle’s minimum wage are now joined by Curly, a fellow by the name of Mike Patton, whose recent screed on the topic can be found here. To demonstrate the deliterious effects of Seattle’s new law, Patton provides us the following chart: (Let’s disregard the fact that what Patton cites as 3.7%…Read More
Today’s column might anger some people on the right AND the left. Try not to react emotionally. Instead consider this as a way to point out some obvious truths to your ideological opposites. Take a look at the Robin Hood Index chart at right (via Bloomberg). It shows the effect of confiscating all of the wealth of…Read More
Whenever I am going through a rough patch in my life, it’s nice when a friend offers kind words of encouragement, some motivational thoughts – Hey! You can get through this! — and everything eventually gets better. Perhaps that’s what JPMorgan Chase Chief Executive Officer Jamie Dimon was thinking when he in effect told the poor – Buck up! Things…Read More