Illustration by Kelly Bjork

One Wage, Two Takes

Inside the Minimum Wage Data War

The UW team studying the $15 minimum wage was supposed to transcend politics. Fat chance.

Jacob Vigdor moved to Seattle in July 2014. Just one month prior, the Seattle City Council had passed a historic ordinance that put the city on the path to becoming the first municipality in the United States with a $15 minimum wage.

Vigdor, an economist specializing in public policy, was instantly intrigued. “I started having conversations around campus—are there plans afoot to do something about this? Because it seems like something that’s worth studying,” Vigdor recalls while sitting in his office at the Evans School of Public Policy at the University of Washington. Vigdor, 45, seems cut out of central casting as a brainy academic. He’s thin and bespectacled and explains topics with a professorial remove—even when the topic is himself. He’s also quick to smile and apt to employ sports metaphors. His office is decorated with Elvis memorabilia, which he explains has less to do with the King’s music and more to do with the economic phenomenon of Elvis.

Vigdor came to UW after 15 years at Duke University. The move was precipitated by his wife, Elizabeth, whom he had met while studying at Harvard. She had long wanted to get back to her hometown of Seattle, and when the opportunity presented itself, they trucked themselves and their three kids across the country and settled in Ballard.

To that point, Vigdor’s research had focused on important public-policy questions, but nothing that got much attention outside academic circles—teacher compensation and immigration, to name just two. His media mentions, he says, were “few and far between.”

But Vigdor’s timing and curiosity would change all that. Just as he was asking colleagues about the possibility of studying the impact of Seattle’s minimum-wage law, the City Council put out a request for proposals for a research team to do just that. The RFP was a little unusual, because while it called for five years of continued research, it had no funding attached. Instead, the 2015 budget included $100,000 in funding for that year, with nothing accounted for going forward. Nevertheless, Vigdor and a team of researchers submitted a proposal.

As it happened, no one else did, and the UW group won the contract.

The idea behind the study was this: With a policy as politically sensitive as the minimum wage, the Council should take into consideration data, and not politics, when analyzing whether it was working. In the study team’s RFP, they signaled they agreed: “Understanding how Seattle’s citizens, workers, and employers adjust to and are changed by this ordinance is important to assess the measure both to forecast the future well-being of our city and inform other localities interested in following Seattle’s lead.”

It seemed like a perfect fit: researchers from UW, housed in a school named after Dan Evans, the former Republican governor whose name is a byword in Washington politics for non-ideological governance. However, as became clear last month, the honeymoon between the city and the researchers has ended—in divorce, it’s safe to say. The trouble has revolved around two papers released by the research team, one last summer and another in June. The paper last summer suggested the minimum-wage law was slowing job growth for low-wage workers; the paper this year went further, finding that the minimum-wage increase to $13 an hour that went into effect in 2016 was actually causing low-wage workers to lose money through their hours being cut. City leaders balked at the findings. Depending on whom you ask, it was either because they didn’t like any research that disagreed with their politics, they disagreed with the way the research was conducted, or they took issue with the way Vigdor characterized the findings in the press.

There have been snippy tweets and testy letters. Two years into the five-year study, the city has declined to put any more of its own money into the research. In June, as the UW team prepared to release its most recent working paper—the one concluding workers were losing money due to the minimum-wage law—the mayor’s office rushed to highlight competing research from a team at Berkeley that came to more positive conclusions, essentially trying to undercut the findings of the city’s own five-year study.

In sum, what was supposed to be an objective look at Seattle’s minimum-wage law has itself become ensnared in ideology, raising serious questions about what role academics should play in politics and what role politics can play in research.

Raising the stakes of minimum-wage law and the UW study is Seattle’s status as a bellwether for higher minimum-wage fights across the country. Being the first to pass a $15 minimum wage—soon followed by New York and California—Seattle is expected to show the first results of the policy as well.

As such, Vigdor, the man whose media mentions were once sparse, has now been quoted in every major newspaper in the country, often sounding a skeptical note about the impact Seattle’s ordinance is having on low-income workers. “The economy has changed in ways that give businesses more options for cutting back on labor,” he told The Washington Post following the release of last summer’s paper. “If you are a person who is trying to make ends meet at the lower rungs of the economic ladder, you might be used to this idea that forces conspire against you. The minimum wage is an effort to try to keep some of these forces at bay, but there are definitely questions about how effectively and for how long.” And following the most recent paper, Vigdor published an op-ed in the New York Daily News titled: “Take It From Seattle: A $13 Minimum Wage Won’t Necessarily Boost Pay.”

In turn, the UW study and Vigdor’s media statements have provided steady fuel for those who see the nationwide efforts to raise minimum wages as a soft-headed policy prescription detached from economic reality—or, more cynically, those who see higher minimum wages as a threat to corporate profits. Most recently, Missouri Gov. Eric Greitens, a Republican, invoked the UW research in justifying the passage of a state law that overrode a minimum-wage increase in St. Louis, effectively dropping the minimum wage in the city from $10 back to the state minimum of $7.70. “This increase in minimum wage might read pretty on paper, but it doesn’t work in practice,” Grietens said, referencing the UW findings.

Supporters of the minimum-wage law have responded to this dynamic by highlighting Vigdor’s ties to conservative think tanks. Specifically, Vigdor is a former fellow at the American Enterprise Institute and currently a fellow at the Manhattan Institute, both of which tend toward free-market ideologies. Vigdor also wrote a blog post in 2014, shortly before moving to Seattle, entitled “The minimum wage is a lousy anti-poverty program.”

“Clearly, the messenger seems to have an ulterior motive,” a writer for The Progressive wrote about Vigdor last year. “Never once in all the media stories covering Vigdor’s minimum-wage study is Vigdor identified as a well-known conservative who moonlights for rightwing groups adamantly opposed to raising the minimum wage.”

Vigdor has somewhat underscored this narrative with his Twitter account, which he has used to debate progressives who have either—by his telling—misrepresented his team’s work or unfairly criticized it. Namely, he’s battled Civic Skunk Works, the policy blog run by Seattle philanthropist and vocal $15-an-hour supporter Nick Hanauer. When Skunk Works writer (and Seattle Weekly literary columnist) Paul Constant wrote last summer that the paper just released by the UW team showed the minimum-wage increases were “great for workers and businesses,” Vigdor shot back: “This article grossly oversimplifies our report. Please don’t misinform.” Hardly the stuff of Trump, but the tweets opened Vigdor to criticism that he was policing progressive interpretations of the team’s data while allowing conservatives to run riot. In September, Vigdor tweeted an apology: “Back in July, I got snippy with @civicskunkworks. That was a mistake, and I regret it. The @UW study is public, all have a right to weigh in.”

Vigdor says today that the apology came from a realization that he can’t dictate how people use the team’s work. “We can’t control what people say. That was part of my personal learning process,” he says. He also insists he’s not the anti-minimum-wage crusader some have pegged him as. His work for the Manhattan Institute focuses on education funding and immigration (specifically, that it’s not the drain on the economy some say it is); his work for the AEI also focused on education funding, which he says helped inform an education-reform bill in North Carolina that increased state spending and was supported by both Republicans and the teachers’ union. As for Gov. Greitens’ comments, Vigdor emphasizes that their paper had lots of caveats and was focused on Seattle. “It doesn’t tell us a whole lot about what would have happened in St. Louis” had the $10 minimum wage stayed in place.

In considering Vigdor’s politics and their influence on the UW research, it’s important to note that while he is the principal investigator on the research team, six other core researchers and scores of others have contributed to the team’s papers. One of those researchers, Scott Allard, says personal ideology never comes up in their discussions about the minimum-wage study. “I don’t have a good feel for what Jake’s personal politics are,” he says. “We just don’t talk about it. It’s not relevant to how our team functions.”

Allard has just published a book, Places in Need, that examines suburban poverty in America and makes the case for strengthening the food-stamp program and other forms of government assistance—hardly the stuff of a crusade against the poor. He says he became interested in studying poverty policy as a teenager, after his dad lost his job as a radio broadcaster in Minneapolis and struggled to find a job to support his family. “If you look at what we do as scholars on this team, it’s finding solutions for low-wage workers. We got into this because we thought we’d ask questions that other people aren’t,” Allard says.

By all accounts, the main question the UW team is asking is a difficult one to answer: In an economy like Seattle’s that’s experiencing a historic boom, does a minimum-wage hike of equally historic proportions help or hurt low-wage workers? The question requires researchers to filter out an incredible amount of noise, using data that does not capture the entirety of the low-wage economy. The team attempts to pull off this feat by, first, analyzing payroll data of individual workers, to which they have been given exclusive access by the state of Washington; and second, by creating a “synthetic Seattle” that uses jobs data from other cities in Washington to estimate how low-wage workers would have fared in Seattle had the minimum-wage law not passed.

In its June paper, which measured the wage hike from $11 to $13 that went into effect in 2016 (the full $15-an-hour wage didn’t go into effect for big businesses until earlier this year), the research team used the payroll data to reach the finding that low-wage workers on a whole were having their hours cut as wages rose, which thus led to these workers actually losing money due to the law. The average low-wage worker in Seattle lost about $125 per month per job, the researchers found. But comparing the real and “synthetic” Seattles revealed data still more alarming: The researchers estimated that Seattle had 5,000 fewer low-wage jobs than it would have without the minimum-wage increase.

With many cities and states considering higher minimum wages and closely watching Seattle’s experience, the results sent an understandable shock across the country. As Jeff Guo put it on Vox: “The University of Washington study is an unusually meticulous look at an issue that has come to the fore in recent years with the Fight for $15 and other campaigns to establish a living wage. Seattle is one of many jurisdictions, including New York, Chicago, and California, that have led the nation in raising their minimum wage to significant new heights. Some have interpreted the University of Washington paper as evidence that these efforts have gone too far.” Speaking to The Washington Post, MIT economist David Autor called the study “very credible” and said it was “sufficiently compelling in its design and statistical power that it can change minds.”

At the same time, other labor economists have been picking the study apart, arguing that there are red flags in the data that should make people skeptical.

Ben Zipperer, an economist at the nonpartisan but left-leaning Economic Policy Institute, notes that the dire effects the UW study found for low-wage workers falls well outside what decades of research on the subject would have predicted. While that may be the case, it also suggests that the paper is an outlier, he says, and should not be trusted without further evidence.

Another common critique of the study is that it looks only at people who work at firms with one location. This is because state payroll data does not distinguish which location of a chain a worker is employed at. Thus it is impossible to know, for example, whether a barista is working at a Starbucks inside Seattle or outside. The UW study team argues that, based on interviews with employers, they believe that restaurant chains were more likely to cut worker hours, so by excluding them, the study is likely to actually underestimate the wage hike’s negative effects on workers.

Zipperer and others say the opposite is true. The way Seattle’s minimum-wage law is set up, only the biggest firms had to raise their wages to $13 an hour in 2016. This, conceivably, induced some workers to leave jobs at small firms in order to get a pay raise at larger chains, the report’s critics say. Such job movement “is not a remote possibility,” Zipperer says. “It agrees with a lot of intuition.” But when that happens, he says, the worker falls off the study’s radar: “This study is going to count that [movement] as a job loss.”

There’s also ample anecdotal evidence that Seattle firms are struggling to find workers—Hanauer, writing a response to the report for PBS, shared a photo of a “Help Wanted” sign from a Seattle Jimmy John’s sandwich shop that advertised a position at $20 an hour. How, he wonders, could employers on the one hand be cutting worker hours because they are financially pinched, yet on the other be offering generous wages to get workers in their doors?

The UW study is a working paper, meaning that it has not been peer-reviewed. But because of all the attention the study has received since it was published, that review is, in some ways, happening in real time. Also, the research team is only halfway through its five-year study, meaning there’s still much research to be done.

“It’s great to see that the public is paying attention,” says research associate Ekaterina Roshchina, an author of the June study. But “it’s challenging in the sense that our study is not the final word … It’s sometimes disappointing that people take our study and say, ‘The debate is settled.’ ”

While the UW research continues, its affiliation with the city seems to be permanently severed. The first inkling of sore feelings between city leaders and the research team emerged last September, when Councilmember Kshama Sawant sent Vigdor a letter criticizing him for both the study that came out in July and his comments to the press about it. For example, Vigdor told Dori Monson on KIRO Radio that the paper showed the minimum wage was “putting a little bit of drag on the Seattle economy.” Sawant, who has a Ph.D. in economics, criticized the “synthetic Seattle” modeling, and more so Vigdor’s characterization of the results. “Even if we were to ignore the report’s methodological flaws and accept the results of its synthetic model at face value, your public comments would still call into question your objectivity,” Sawant wrote.

In response, the lead researchers on the study, including Vigdor, wrote a letter saying that the research was not the product of Vigdor alone, and defended the use of a synthetic model; they also argued that the press can take quotes out of context to prove a point.

As would later become clear, Sawant’s concerns were not assuaged by the team’s response. The exchange of letters occurred just as the City Council entered the budgeting process for 2017–18. As it had in past years, the UW research team submitted a request for funding to continue the five-year study; the request was not fulfilled. Vigdor says that the decision was made “behind closed doors,” with no explanation given to the team. Sawant would later say that the decision was made due to the Council’s concerns over the team’s methodology.

Then, in May, as a courtesy, the UW research team shared with the mayor’s office a draft of the study it was preparing to release in June—the one showing that the minimum-wage law was costing workers money. The mayor’s office, in turn, asked a team of economists at the University of California–Berkeley to review the report. Much as progressives are with Vigdor, conservatives are deeply skeptical of minimum-wage research out of Berkeley. Last year, an investigative report by the Albany (N.Y.) Times-Union found “a deep level of coordination” between a Berkeley economist and advocates of a $15 minimum wage in New York as that state’s minimum-wage law was working through the legislature. The coordination, the Times-Union found, included exchanging talking points prior to legislative hearings and meetings with editorial boards, which critics saw as an indication that the researchers were crossing into advocacy. Central to the New York campaign was a study authored by another Berkeley economist, Michael Reich—the same economist contacted by Seattle to look over UW’s recent work. That said, none of the Times-Union reporting implicated Reich, who’s considered a leading expert in the field, in coordinating with wage advocates.

Regardless, a week before the UW study was published, Reich’s team published its own report, focused on the food-service industry, that found restaurant workers are benefiting from Seattle’s minimum-wage law. Much like the negative headlines the UW study would produce a few days later, the Berkeley report led to lots of celebratory media coverage declaring another victory for Seattle’s minimum-wage law.

To critics of the $15-an-hour ordinance, the decision to halt funding, paired with the request for Reich’s team to conduct a separate study, shows a clear intent by city leaders to undermine research that doesn’t fit their political narrative. That would be a particularly egregious sin given that the whole point of creating the five-year study was to remove politics from the city analysis to begin with. “These people are shameless,” huffed a blogger at Forbes. Others, like David Goldstein—a senior fellow at Hanauer’s Civic Ventures—have argued that one can’t be upset about Berkeley’s supposed biases without also accounting for Vigdor’s. In the end, it can feel like a cynical game of pick-your-own-facts.

Vigdor grew up in Bloomington, Indiana, and like a good Hoosier, uses basketball to explain things. He sees the UW research team as refs on the court, and all the shouting around them as attempts from one team or the other to get calls to go their way. He says some of that shouting is justified. “Badgering that’s effective is not saying, ‘You made a bad call.’ It’s, ‘Watch out for number 42; he’s playing dirty,’ ” he says. Likewise, he says, feedback about quirks in the labor market—a tendency in the restaurant industry to underreport hours, say—helps them improve their research. Getting called a conservative, not so much. “When it gets personal, when they attack me, that means they can’t attack the work,” he says.

Because the city was never in a position to fund the bulk of the team’s research, it’s been funded largely by other grants, and Vigdor says they’ve already been able to replace the money they’d hoped to receive from City Hall. He doesn’t seem to much regret its riddance. “We were not hired to be a propaganda organ. We were hired to do independent research, and there’s a case to be made that independent research should be fully independent—that if research is independent but is funded through a political process, that there are going to be risks,” he says.

The loss of city funding would seem to lessen the visibility of the team’s research. Part of the appeal of the team’s work was that it had the stamp of approval from the city whose law it was analyzing. If they found fault with the law, then, it would carry a greater air of credibility.Without that credibility, the team’s finding may very well be relegated to whichever outlets its findings best serve—or, even more likely, relegated to the obscurity of academia. Vigdor, who spent most of his career out of the media spotlight, says he won’t mind if that were to again be the case.

“Those first couple of times that people outside the university pay attention to what you’re doing, maybe there’s some excitement there,” he says. “But you learn pretty quickly, the media stuff is really ephemeral.”

dperson@seattleweekly.com

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