One of the most popular arguments against raising the minimum wage is getting demolished

One of the most popular arguments against raising the minimum wage is getting demolished

by David Dayen at Salon

http://www.salon.com/2016/04/26/one_of_the_most_popular_arguments_against_raising_the_minimum_wage_is_getting_demolished/

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Four researchers at the University of Washington looked at the early returns from Seattle’s landmark minimum wage law, enacted in 2014. The law raises the minimum wage in stages, with all workers reaching $15 an hour by 2021, and some faster than that. The first phase, in April 2015, took most workers to $11 an hour. (It has since increased again to between $12-$13 in January 2016.) The researchers looked at the first year of implementation, with a particular focus on prices.

This is one of the critics’ many go-to arguments: Raise wages, they say, and businesses will have to raise prices to maintain their profits. It seemed like an uncontroversial claim; even supporters of the Fight for $15 said they would be willing to pay a bit more to give workers a living wage. And 62 percent of Seattle employers responded in an initial survey before the wage hike took effect that they would likely raise prices.

But they haven’t yet.

The UW researchers visited grocery stores, gas stations, restaurants, and retail outlets in the year since initial implementation, and also scraped the Web to check local prices on goods, services, and rent. “Our preliminary analysis of grocery, retail, gasoline, and rent prices has found little or no evidence of price increases in Seattle relative to the surrounding areas,” the researchers concluded.

The team found no measurable price hike at all at grocery stores, gas stations or retail outlets. Researchers filled a sample “grocery basket” in March 2015, before the wage increase, and it cost them $317. After the wage increase, that same basket cost $315.



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