NYS Exposed: Seattle's minimum wage: What are the lessons for New York State?

July 10, 2017 11:37 PM

Every year in New York state, the minimum wage is going to go up. By 2019, in all of New York City, it'll be $15 an hour. By 2020, in upstate, it'll be $12.50 an hour.

For the first time, we are getting a look at the impact of raising the minimum wage on the people who make the money.

Two universities studied what higher wages did to workers in Seattle where the minimum wage is already at $13 an hour.

Seattle, like New York, is increasing the minimum wage a little bit every year. We wanted to know: what are the lessons for Upstate New York?

In New York, the rally to raise the minimum wage was called the "Fight for 15." It was a push to get working parents out of poverty.

"I've been in poverty for generations and it's getting to me at the point where I can't take it anymore," one rally member said.

Last year, New York state made it official: the minimum wage will go up every year. And now we're seeing how it could work.

The University of Washington and the University of California Berkeley looked at what's happening in Seattle. The UC Berkeley study looked only at restaurant workers. It found raising the minimum wage helped them make more money.

Sylvia Allegretto, UC Berkeley: It looks like it's working as intended.

Sylvia Allegretto led the study for UC Berkeley. I reached her by Skype.

Brean: What is the lesson learned as far as you're concerned from Seattle?
Sylvia Allegretto, UC Berkeley: I'm saying at $13 an hour you get the intended policy which is to increase the wages of workers.

But the University of Washington study -- which looked at every low wage workers -- shows that once Seattle hit $13 an hour, the number of hours an employee making minimum wage got scheduled to work started going down and they ended up losing money.

Hilary Wething, PhD student, Univ. of Washington: And so what this means is that low wage workers in Seattle have seen a net reduction in their net earnings by about $125 per month.

Brean: If you're telling me that the amount of money people are taking home is down, that's not a good thing.

Hilary Wething, PhD student, Univ. of Washington: You are absolutely right.

Chris Christanis, Peppermill Restaurant: It doesn't shock me. New York State -- we're making tough choices as well.

Chris Christianis owns the Peppermill restaurant in Rochester. Since the minimum wage increased here, he's closing one hour earlier. Monday through Thursday the doors lock at 9 p.m. It used to be 10 p.m.

And he says he's are adjusting the number of hours his employees work. In some cases, some employees could work less.

Chris Christanis, Peppermill Restaurant: Two things: the menu and our payroll. those are the two biggest things we have to worry about.
Brean: Is there a lesson for New York here?

Hilary Wething, PhD student, Univ. of Washington: I think the biggest lesson to keep in mind here is that boundaries matter.

In Seattle, the minimum wage is less outside the city. So employers can move their employees outside the city and save money.

Brean: So the fact that in New York it's statewide, it may mitigate some of those problems we're seeing in Seattle.
Hilary Wething, PhD student, Univ. of Washington: That's exactly right, yes.

Based on University of Washington study, the tipping point in Seattle is $13 an hour. In upstate it's going to stop at $12.50 an hour and only go up after that at the rate of inflation. So upstate might hit the sweet spot.

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