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The effect of raising the minimum wage in Seattle

The New York Times looked at two recent studies about the minimum wage increase in Seattle. As one of the first jurisdictions in the country to move to a $15 per hour minimum wage, Seattle has become a focal point in the wage debate.

The studies were conducted by the University of California, Berkeley and the University of Washington, and looked at whether the increased wages caused a reduction in employment, as opponents of the law predicted it would. Interestingly, the researchers in charge of the studies came to very different conclusions.

The researches conducting the Berkeley study focused on data from the restaurant industry. They found that for each 10 percent increase in wages, industry-wide wages increased by 1 percent, with little effect on employment numbers. The findings supported previous studies which determined that raising an area's minimum wage by half or less of the current wage has little effect on employment rates.

Seattle has been following that model since it began implementing higher wages in 2015. The law called for the wage increases to be rolled out over time, with the $15 per hour minimum wage taking effect this year for large businesses.

Contrary to the Berkley study, researchers at the University of Washington looked at data from all industries across the city and found that, especially after the minimum wage rate increased from $11 per hour to $13 per hour in 2016, there was a significant reduction in the number of hours low-wage earners were working.

There are plenty of supporters on both sides of the minimum wage debate, and there are studies to support both points of view. These are two reputable institutions that came to completely different conclusions.

We're too early in the process to truly determine the full effect of these minimum wage increases. As jurisdictions across the country continue to push for higher minimum wages, researchers will have access to more data that will help businesses and employees understand the effects of raising wages. 

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