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Column: New study says the minimum wage hike in Seattle is bad for low-wage workers

A recent study found that gradually raising the minimum wage to $15 has caused serious damage to low-wage workers in Seattle. Economist Jonathan Meer says policymakers should take note. Photo by David Ryder/Reuters

Editor’s note: An economic working paper on the effects of a substantial minimum wage hike, such as the recent one in Seattle, commissioned by the city itself, is causing quite a stir in economic circles, both pro and con. The study finds that the minimum wage boost, now up to $13 an hour for large employers in Seattle, has cost jobs for the city’s lowest-wage workers. Though I’ve been warned against reading too much into an academic working paper that hasn’t even been peer reviewed yet, this one is getting enough publicity to warrant attention here at Making Sen$e. We’ve covered the topic extensively, particularly in Seattle, from a 1996 interview with Princeton professor and Obama economic adviser Alan Krueger to the series from Seattle in 2013 when a minimum wage hike first appeared on the ballot there.

Of course, at some level, a higher “minimum wage” will inevitably mean fewer low-skill jobs. Imagine a $100 minimum wage, for example. Employers would replace workers with machinery anywhere and everywhere or simply go out of business. Longtime wage hike advocate Alan Krueger himself has wondered in print if a minimum wage of more than $12 might not be too high. So the real question is: Just how high can the minimum wage be raised before it becomes counterproductive?

We’re presenting two views of the controversial new study here on our Making Sen$e page. The first is from economist Jonathan Meer, associate professor of economics at Texas A&M University, who has done earlier work claiming the minimum wage hurts low-wage workers. A version of his comments ran in the conservative National Review.

— Paul Solman, economics correspondent

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