On June 2, 2014 Seattle’s city council approved a raise in the minimum wage to a highest in the nation $15 an hour. Not one member of the council voted against it. Like most liberal progressives, the Seattle city council believed they could regulate prosperity. The law
did not have the intended consequences.
The National Bureau of Economic Research (NBER), a private, non-profit, non-partisan organization conducting economic research, published a paper, on June 26, about the impact of the increase in the minimum wage on Seattle. The working paper is called “Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle.”, and was put together by a team from the Daniel J. Evans School of Public Policy and Governance of the University of Washington.
The report analyzes of data from the second quarter of 2014, right before the law was passed, and the second quarter of 2016. The data shows a reduction of 39 percent in jobs that pay less than $13, as to be expected. However, the data also showed a decline in jobs, 4,528, that pay under $19. This is where the jobs were the loss in jobs under $13 was supposed to go.
The bad news didn’t stop there. Over the same two-year period, the data showed a significant reduction in the amount of hours worked. People making under $13 showed a decline of 5.8 million hours in reduction, while people making under $19 lost 1.7 million hours of work. Once again, there was supposed to be a decrease in hours of people making less than $13 with an increase in people making less than $19. Just as the number of jobs decreased, the hours worked by those that held onto their jobs decreased.
Overall, this was a disaster for the working class in Seattle. Yes, people got raises, but thousands lost their jobs, and those that could keep their jobs, saw their hours decreased. For someone working for an hourly wage, it’s simple math, work more hours, make more money. It is estimated the race to make $15 the minimum wage in Seattle cost low-wage earners an average of $1,500 per year. The increase in pay, did not make up for the reduction in hours. I don’t remember “work less, get paid less” being a slogan of the $15 movement.
The federal government should use the Seattle model as a warning. According to the U.S. Census data there are approximately 84 million jobs that make under $40,000. If Seattle’s experience is any indicator of how a national minimum wage hike up to $13 an hour would work out, the cost could be a loss of 1.2 million jobs making less than $40,000 a year, without being moved to a higher wage.
In another winner from the Seattle City Council, a “violence” tax went into effect on January 1, 2016. The measure placed a $25 tax on firearms sold in the city, and up to 5 cents per round. The city tried to hide the attempted denial of Second Amendment rights, by saying the tax would be a revenue raiser with the proceeds going towards violence research. It was expected to raise between $300,000 and $500,000 per year. Let’s just say, it didn’t quite work out the way they planned.
The measure failed spectacularly in two ways. First the measure failed to raise the expected funds. Seattle has yet to release how much was raised last year, probably because it is ashamed to mention the number. What we do know, is that it is less than $200,000. That is at least 33 percent less than the minimum expected revenue. And what revenue has been collected, has not been spent on the promised research. There is a lawsuit challenging the tax, and the city will not spend the money until the suit is resolved. The city went forward with the research spending and spent $275,000 on the research. So, the “violence tax” has so far cost taxpayer over a quarter of a million dollars, and if the lawsuit goes against the city, they will never see the money.
What about the violence the tax was supposed to mitigate? Once again, Seattle failed miserably. Comparing the first five months before the tax was initiated with the first five months of this year, you get startling statistics. Rapes have gone up by 56 percent. Aggravated assault has gone up by 18 percent. Homicide and robbery have stayed the same. The Seattle violence tax did nothing to discourage violence. Will they ever learn?
Two laws passed had the exact opposite affect the laws intended. When it comes to the progressive left, no matter how much evidence presented of a failed policy, nothing changes.
Seattle now stands as a message to other cities across the U.S. The city enacted laws that tax citizens who want to defend themselves, or ended up getting them fired all together. Don’t be like Seattle.