Imagine that Diogenes, the Greek philosopher who according to legend roamed the streets of Athens in search of an honest man, had found such a man but didn’t like the truths he uttered. What would he have done? I don’t know the answer to that question, but I can tell you what the city of Seattle did under similar circumstances 2,400 years later. When given bad news about its minimum wage law by one honest man, its leadership harrumphed and went in search of another whose “truth” it might find more palatable, more in keeping with its liberal preconceptions.
As The Washington Post noted on Monday, the city commissioned a group of economists at the University of Washington to study its plan, enacted three years ago and already in progress, to increase the city’s minimum wage to $15 an hour. The stated goal was to improve the lives of low-income workers.
But what a preliminary working paper released by the researchers shows is that the hike has had the opposite effect:
Already … some employers have not been able to afford the increased minimums. They’ve cut their payrolls, putting off new hiring, reducing hours or letting their workers go….
The costs to low-wage workers in Seattle outweighed the benefits by a ratio of three to one….
On the whole, the study estimates, the average low-wage worker in the city lost $125 a month because of the hike in the minimum.
David Autor, an economist at the Massachusetts Institute of Technology who did not participate in the research, called the study “very credible” and “sufficiently compelling in its design and statistical power that it can change minds.”
The news, for Seattle in particular and liberals in general, goes from bad to worse:
Economists might not readily dismiss the new study as an outlier…. The paper published Monday makes use of more detailed data than have been available in past research, drawing on state records of wages and hours for individual employees.
So what action has Seattle taken? Has the city council convened to discuss revisiting the minimum wage law? Surely you jest. According to Fox News, the city has taken action all right. It immediately cut off funding to the University of Washington research team and hired another economist from the University of California at Berkeley. The name of the new “honest man” is Michael Reich, who earned his PhD in economics from Harvard and is currently co-chair of the Institute for Research on Labor and Employment.
But likely impresses the Seattle city council is not his credentials so much as it is the fact Reich has authored several studies on the effects of raising the minimum wage and all conclude that increasing the minimum wage helps low-skilled workers.
And here’s the kicker:
According to emails obtained by Fox News, Reich was given a deadline by [Mayor Ed] Murray. His work was to be completed just before the University of Washington team announced its [final] results.