Fresh on the heels of the ludicrous claim that Sarah Palin was responsible for the 2011 Tucson shooting, the New York Times editorial board published another head-scratcher yesterday, this one about Seattle’s minimum wage hike. The Times’ editorial, titled “Seattle shows the way to higher pay” notes the study found the wage hike to $13 an hour did “more harm than good.” And yet, a few paragraphs later the Times simply dismisses those findings and concludes all is well:
In attempting to assess the effects of the increase, the Seattle study excluded workers at businesses that also have locations outside the city, including chains and franchises like Starbucks and McDonald’s. The intent was to isolate the impact on Seattle employers, independent of outside business concerns. But the consequence was to overlook — and most likely underestimate — the experiences of employers who can best afford the raises. Similarly, the study blames the minimum wage increase for a decline in low-wage work in Seattle, when a likely cause is the city’s strong economy in which competition, not the minimum wage, bids up pay.
Seen in that light, it seems safe to conclude that Seattle has tolerated its minimum wage increase well and that, by extension, other strong economies could do so. It also suggests that a key to successful large increases is a gradual phase-in that gives businesses time to adjust and experts time to study the impacts as they unfold.
The claim that the UW study leaves out multi-state businesses and therefore omits the people most like to benefit from the wage hikes sounds good. But here’s what the NY Times doesn’t tell its readers. Jacob Vigdor, who led the team doing the UW study, surveyed 500 Seattle businesses in order to find out how they responded to the wage hike. He found that the multi-state businesses were actually more likely to respond by cutting back on hours. From the NY Daily News, this is Vigdor writing about his own study:
We worried – and to some extent, we still worry – that our data might be missing some jobs. We’re using data collected by the State of Washington covering almost every worker who receives a W-2. But sometimes the data aren’t specific enough to let us know whether a job was in Seattle or another part of the state. This is a particular problem for businesses with many locations. Maybe these businesses were adding jobs even as others cut them.
Fortunately, my colleagues participating in the Minimum Wage Study at the University of Washington have been conducting a survey of over 500 licensed Seattle businesses, many of them with more than one location. Owners of these chain businesses were actually more likely to report cutting jobs compared to small one-location companies. So our best guess is that adding in the data for these companies would make our results even more negative.
In an interview with Inlander, Vigdor expanded on the findings of the survey of multi-state businesses:
“Some businesses are trying to move operations out of Seattle,” Vigdor says. “I heard from one business owner that moved some of their employment to Ohio. Sometimes it’s not so much going to Ohio as going to the suburbs. [Or] getting by with fewer workers on the shift.”
He says some businesses decided to open later or have their workers waiting on-call in case things got busy, instead of guaranteeing work for them.
But say the surveys were wrong. Multi-location businesses would have to be experiencing massive growth, Vigdor argues, to compensate for what he’s seeing in the single-location businesses.
“If this negative stuff you’re seeing in 62 percent of the workforce is negated by the other 38 percent of the workforce, you’d have to assume tremendous job growth is happening in the other 38 percent,” he says.
Why would the NY Times omit this obviously relevant information? Did the editorial board not know about this or did they just not want their readers to know? After the Sarah Palin debacle, it’s probably not safe to assume the editorial board is aware of the underlying facts when writing these pieces.