In June of 2014, Seattle’s city council passed the highest minimum wage law in the country (cue chorus of “Seattle cares more about workers than any major metro area!”).
Leftists and progressives celebrated and prophesied wondrous results. Conservative and free-market right wingers rolled their eyes and warned that jobs would be lost.
Guess who was correct?
Look what happened to employment in the city:
And look what happened to the city’s unemployment rate:
Lest you think it was an economic issue for the entire area, look what happens when you overlay the city’s employment rate with that of the surrounding area:
For the graph-unabled, the key is this: employment declined in the city but increased in the surrounding area (that was NOT hobbled by an increase in the forced minimum wage). In fact, the surrounding area broke an employment record in late 2015, at the same time the city itself was losing jobs at a record rate.
In other words, it was NOT the economy of the area that was hurting workers in the city.
The idea that forcing employers to pay their workers more might sound good, especially if you’re predisposed to think of business owners as greedy selfish slave-masters. But the reality is that the real minimum wage in any area is $0 and anytime the price of something goes up (labor, in this case), absent a corresponding increase in demand (businesses wanting more workers), there will be less buying of that thing.
These three graphs clearly show that workers in Seattle are learning this lesson the hard way.
Thank you for reading and please share!