City’s wage hike did not slash foodservice jobs, study shows

Seattle’s minimum wage increase did not lead to a slowdown in job hires, a recent study by the University of California at Berkeley shows.

Looking at seven years of city and county data on employment and wages in the foodservice industry and comparing it to a “synthetic control” group, Seattle employees received higher wages and employment in the industry was unaffected, concluded the study, which was commissioned by the mayor of Seattle.

Researchers created the control group, a simulation of the city’s current economy without an increased minimum wage, via an algorithm using weighted data from other cities that have not seen wage hikes. They were quick to point out, however, that Seattle’s “hot labor market” could be the reason why unemployment did not increase, and that other cities may not see the same results. 

The findings contradict those from a study out of the University of Washington, which last year concluded that Seattle employees working low-wage jobs had seen a slight reduction in employment (to the tune of one percentage point) since the introduction of a higher wage and had also been working fewer hours relative to other employees in that region. That study did note that Seattle’s low-wage employees who retained their jobs were “modestly better off” than they had been before the increase.

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Seattle’s minimum wage is currently between $11 and $15 an hour, depending on the size of the employer and whether employees make tips or receive healthcare. The city began phasing in its wage increase in 2015 and will complete the hike in 2021.