Has an Increased Minimum Wage in Seattle Helped or Hurt the Local Economy?

Seattle's decision to increase its minimum wage to $15 per hour has sparked a debate about whether the move has helped or hurt the local economy. Various reports and analyses have explored the consequences, particularly in the food and beverage service industry, and the results are mixed.

The Impact on Restaurant Employment in Seattle

One of the most visible impacts of the increased minimum wage has been on the number of jobs in the restaurant sector. According to a report by the Washington State Employment Security Department, job gains at Seattle-area restaurants rose just 1.8% from a year ago, down from 4.6% growth a year earlier. This is their worst year for employment since 2009. Meanwhile, the rest of Washington State saw a significant increase in restaurant employment gains, with a 6.3% growth rate. (Source: )

Seattle’s minimum wage hikes started in April, rising from the statewide $9.47 to $11 per hour for companies with more than 500 employees. For smaller employers, the minimum wage increased to $10, which then rose to $10.50 at the start of 2016, or to $12 for employees without employer-provided health insurance. (Source: )

During the period from January 2015 to May, the number of restaurant jobs dropped by 2,000. However, between May and November, after the April increase to $11 an hour, the jobs increased by 2,900, resulting in a net gain of 900 jobs from January to November. (Source: )

Impact on Teen Employment

The impact of the minimum wage hike extends to other demographics. A study shows that the employment rate for teens aged 16 to 19 in the Seattle-Tacoma-Bellevue area fell from 45.8% in 2000 to 25% in 2012 (Source: )

In Seattle, the youth unemployment rate is over 13%, and for low-income youth, young people of color, and 'disconnected' youth, it's even more severe. Nationally, youth aged 16-24 are experiencing unemployment rates that are more than twice the national average. In June 2015, when the national unemployment rate was at 5.3%, the youth unemployment rate stood at 12.1% (Source: )

Conclusion

The debate over whether increasing the minimum wage has helped or hurt Seattle's economy is ongoing. The data suggest that there are mixed results, with some positive outcomes for those still employed but negative implications for teenagers and low-skill workers. As always, the impact depends on who you are. If you are still employed, it can be great. However, if you are a teenager looking for a first job, especially if you are black or have a low skill set, the increase in the minimum wage has not been particularly helpful.

Keywords

Seattle minimum wage, minimum wage increase impact, restaurant employment