The Wage Debate

The City Knew the Bad Minimum Wage Report Was Coming Out, So It Called Up Berkeley

Seattle is getting an object lesson in weaponized data.

Michael Reich and Jacob Vigdor. Photos courtesy of Berkeley and UW

Two weeks. Two studies on minimum wage. Two very different results.

Last week, a report out of the University of California—Berkeley found “Seattle’s minimum wage ordinance has raised wages for low-paid workers, without negatively affecting employment,” in the words of the Mayor’s Office. That report, produced by the Center on Wage and Employment Dynamics at Berkeley, was picked up far and wide as proof that the doomsday scenarios predicted by skeptics of the plan were failing to materialize.

And while another study that came out Monday from researchers at the University of Washington doesn’t exactly spell doomsday either, it wasn’t exactly rosy. “UW study finds Seattle’s minimum wage is costing jobs,” read the Seattle Times headline Monday morning. The study found that while wages for low-earners rose by 3 percent since the law went into effect, hours for those workers dropped by 9 percent. The average worker making less than $19 an hour in Seattle has seen a total loss of $125 a month since the law went into effect.

There’s an old joke that economics is the only field where two people can win the Nobel Prize for saying the exact opposite thing. However, by all appearances these two takeaways on Seattle’s historic minimum wage law are not a symptom of the vagaries of a social science but an object lesson in how quickly data can get weaponized in political debates like Seattle’s minimum wage fight. In short, the Mayor’s Office knew the unflattering UW report was coming out, and reached out to other researchers to kick the tires on what threatened to be a damaging report to a central achievement of Ed Murray’s tenure as mayor.

Let’s review the facts.

While the Berkeley report, written by Michael Reich, Sylvia Allegretto, and Anna Godoey, was cheered in many corners of the web, one blogger at Forbes called foul. Michael Saltsman is an avowed critic of higher minimum wages, and his post takes a lot of talking points straight from the Washington Policy Center and other minimum wage foes. This includes the hugely oversimplified but oft-repeated contention that Louisa’s Cafe in Eastlake shut down due to the minimum wage hikes. However, Saltsman raises a good question, pointing to a paragraph on the title page of the study that says the Berkeley report was “prepared at the request of the Mayor of Seattle.” This was odd, Saltsman noted, given that the city was already funding a series of six studies from the University of Washington on the impacts of the wage law. Why look outside the city for research when taxpayers are already funding local number crunching?

He had a theory: Those UW studies just weren’t positive enough. Saltsman pointed out that Reich is a go-to academic for proponents of a $15-an-hour minimum wage across the country. Reich is also affiliated with the Berkeley Labor Center. As the Albany (N.Y.) Times Union noted last year, the center “has done at least six … studies on the minimum wage in California municipalities, all showing that a wage increase would be beneficial.”

Last week, I reached out to Benton Strong, the mayor’s spokesman, to ask why the city was requesting research already covered by the UW team.

He responded to say that “the upcoming UW study is not part of the work funded by the City. Michael Reich is a well-known economist who had done extensive work on policies like the minimum wage and the City asked him to review early drafts of the UW report, specifically the methodology, and provide analysis. Yesterday, he also provided analysis of the impacts of the minimum wage in Seattle.”

At the time, I wasn’t aware of what upcoming UW study he was talking about, and asked for clarification, to which Strong said: “There’s apparently one coming next week.”

And so there was.

To review, the timeline seems to have gone like this: The UW shares with City Hall an early draft of its study showing the minimum wage law is hurting the workers it was meant to help; the mayor’s office shares the study with researchers known to be sympathetic toward minimum wage laws, asking for feedback; those researchers release a report that’s high on Seattle’s minimum wage law just a week before the negative report comes out.

Strong is correct in saying that the UW study was not funded by the city. It should be noted, though, that the researchers involved in the study are the same researchers who are in charge of the city-funded reports.

Those reports have previously grated advocates of the $15 minimum wage. In September, Councilmember Kshama Sawant took the research group to task for various aspects of a report from last July, which Sawant argued cast the wage law in a poor light due to bad methodology and accused the director of the study, Jacob Vigdor, of “idelogical editorializing.”

In a brief interview Monday, Vigdor defended the group’s most recent study, saying it was based on far more granular data than the Berkeley team had access to. Specifically, the state provides his group special access to individual worker data while the Berkeley researchers have a “public use data set, which is basically a bunch of … summaries of this data.”

“Ours has a lot more details and depth to it, because we’re looking at individual workers,” he said.

Asked whether he thought the Berkeley report was a ploy by City Hall to preempt their report, Vigdor said: “I’m not going to comment on that.”

Berkeley’s Reich did not return a phone call seeking comment, but in a memo released Monday he blasted the UW report, saying it was full of red flags.

Among other things, the UW study did not include multisite businesses in the study, which the UW researchers argued produced a cleaner data set but which Berkeley researchers said meant a huge portion of Seattle’s low-wage work force was left out of the study. Reich also notes that many of the UW team’s most dire conclusions fall outside what even highly critical research would suggest.

“The unlikely UW estimate of large negative employment effects likely results from the problems noted above. Their findings are not credible and drawing inferences from the report are unwarranted,” Reich wrote.

In a statement Monday, Murray stood by the wage law, pointing to Seattle’s low unemployment figures.

“Seattle’s $15 minimum wages is raising pay for low-wage workers, while our City’s economy is booming and unemployment is at historic lows,” he said. “Businesses across the city are competing for employees and our city is in the midst of a period of nearly unprecedented growth. Raising the minimum wage helps ensure more people who live and work in Seattle can share in our city’s success, and helps fight income inequality. It isn’t just the right thing to do, it’s the smart thing to do.”

dperson@seattleweekly.com

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