Seattle Voted to Hike the Minimum Wage to $15 an Hour. Here’s What Happened to Seattle’s Job Market.
October 22, 2015
Data shows that the Seattle Metropolitan Statistical Area (MSA) lost 700 restaurant jobs from January to September of this year, and a report from the American Enterprise Institute suggests that this could be the product of adverse effects of minimum wage hikes on restaurant jobs.
“What is also noteworthy about the loss of Seattle restaurant jobs this year is the fact that restaurant employment in the rest of Washington state is booming this year,” writes Mark Perry, an AEI scholar and professor of economics and finance at the University of Michigan’s Flint campus.
A report by Perry, published Wednesday on AEI’s public policy blog Carpe Diem, notes that there has been an increase of 5,800 new restaurant job positions in the rest of the state of Washington.
While the overall job growth rate this year for the Seattle MSA is higher than the national average, the drop in restaurant jobs stands out. The past three years have seen restaurant employment in the Seattle MSA area at an average job gain of almost 4,000 employees during January-September, according to Perry’s work.
“One likely cause of the stagnation and decline of Seattle area restaurant jobs this year is the increase in the city’s minimum wage,” Perry wrote.
Restaurant owners acted to compensate for a government-mandated 10%-20% labor cost increase? Who could have forseen that? Does anyone believe the coming ~36% additional labor cost increase will be any les harmful to Seattle’s labor market. I’m guessing the data for restaurant closures and openings for the several years prior to, through, and a couple of years beyond these government-mandated additional labor cost increases might prove interesting as well.