Thursday, November 14, 2013

SeaTac is the canary in the coalmine

It looks like we have a natural experiment on our hands, although not the best one.

Voters in Washington state approved a $15 minimum wage for SeaTac airport employees. Sort of.

This is being misreported as a minimum wage for all of Seattle or all airport employees. SeaTac is technically a city, but this is mostly about the airport. The wording for Proposition 1 is long and complex, and the exceptions are getting lost in the shuffle.

This new minimum wages does not affect restaurants outside of the airport, grocery stores, most small businesses and hotels with both less than 10 rooms and 30 rank-and-file employees. It doesn't even affect some small businesses inside the airport.

While I look forward to a natural experiment to show the effects of the minimum wage, such as pricing low-skilled workers out of the job market, this experiment has a lot of variables that will soften the damage.

It's bad enough that Seattle voters accepted a socialist economic instructor who supports rent control (this is like a Republican biology professor who supports creationism) but their golden opportunity at a natural experiment is bogged down in compromises. The harm from this policy will still be real, but it won't be as acute and jagged as an actual across-the-board $15 hourly wage would. I fear that more people will have to suffer when the experiment is inevitably repeated.

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