Not surprisingly, Washington also has the highest state minimum wage in the country at $9.32, although several other states, California included, are considering giving their lowest paid workers a boost. The federal minimum of $7.25 is under heated discussion, although it won’t jump any time soon.
Soon to be followed by "Businesses leave Seattle. Unemployment soars".
It will be an interesting experiment. I feel sorry for those who will inevitably suffer, but I think good data will come out of this.
You know... I'm not certain, but I thought we were in a Recovery still. Might not be the best time to drop mandated 50% pay increases on every business in Seattle.
"If we're trying to lift people out of poverty conditions and improve their well-being — improve their chances of being able to make a living — there are much more efficient, less costly ways of doing that than through this artificial mechanism of raising the minimum wage," said Steven Lanza, an economist at the University of Connecticut.
Expanding the Earned Income Tax Credit, for instance, could go further in helping low-income workers survive, he said.
One unknown is whether employers will start cutting back on hiring.
Employment growth in Connecticut has lagged behind the nation since December, data show. Nationally, employment grew 0.62% from December through April, while employment in Connecticut fell 0.19% over the same time period.
Much of that drop-off was related to the elimination of 10,900 jobs in January, the month employers had to start paying 45 cents more. In the previous three years, Connecticut had added an average of 4,000 jobs over the same time period.
More job cuts wouldn't surprise economists. If companies have to pay more for labor, they'll try to save somewhere else, said Keith Hall, a research fellow at the Mercatus Center at George Mason University.
"Because you're raising the cost of hiring, you can get this unintended consequence where some of the people on the margin have their hours reduced," he said.
When Segui began working at Dunkin' Donuts, she was scheduled for 35 hours a week. A few months ago, she and other workers starting getting fewer hours. She now works from 20 to 27 hours a week.
Employers say they're worried that minimum-wage hikes will inflate their whole pay scale; they fear they'll have to raise all wages so that skilled workers proportionally get more than unskilled workers.
"It's hard for them to absorb additional labor costs," said Jack Mozloom, a spokesman with the National Federation of Independent Business.
Edited by DieChecker, 03 June 2014 - 06:06 AM.