Even if the minimum wage doesn’t reduce employment levels, which is unlikely, it can still make workers worse off

Even if the minimum wage doesn’t reduce employment levels, which is unlikely, it can still make workers worse off | AEIdeas:

There is now some anecdotal evidence to support the adverse secondary effects of minimum wage hikes in the wake of the increase in the minimum wage to $15 per hour in the Seattle suburb of SeaTac for certain service industries on January 1 of this year. 

This article outlines some of the negative impacts the $15 per hour “economic death wish” is having on businesses and employees in SeaTac, and this report from the Asian Weekly is especially illuminating:

While attending an event at a SeaTac hotel last week, I met two women who receive the $15/hour minimum wage. SeaTac has implemented the new law on Jan. 1. I met the women while they were working. One was a waitress and the other was cleaning the hallway.

“Are you happy with the $15 wage?” I asked the full-time cleaning lady. “It sounds good, but it’s not good,” the woman said. “Why?” I asked. “I lost my 401k, health insurance, paid holiday, and vacation,” she responded. “No more free food,” she added. The hotel used to feed her. Now, she has to bring her own food. Also, no overtime, she said. She used to work extra hours and received overtime pay. What else? I asked. “I have to pay for parking,” she said.

I then asked the part-time waitress, who was part of the catering staff.

“Yes, I’ve got $15 an hour, but all my tips are now much less,” she said. Before the new wage law was implemented, her hourly wage was $7. But her tips added to more than $15 an hour. Yes, she used to receive free food and parking. Now, she has to bring her own food and pay for parking.

Bottom Line: Even in cases when the minimum wage doesn’t have adverse effects on employment levels, which is highly unlikely, it most certainly does have adverse, secondary effects on low-skilled workers, as the anecdotal evidence above suggests.