Seattle Businesses Predicted They’d Raise Prices as a Result of the Minimum Wage Hike. In Reality: No.
The University of Washington Evans School for Public Policy and Governance has completed the first round of a study of the effect of a rise in the minimum wage in Seattle, Washington. This inventive study followed two steps. In the first step, immediately after the 2015 passage of the minimum wage law in Seattle, UW researchers surveyed Seattle business owners. In that survey, 62% of employers echoed conservative pundits predicted that they would raise prices. In the second step of the study, researchers measured actual changes to prices from 2015 to 2016 in the city and the surrounding communities. Summing up this second phase of study, researchers declared, “Our preliminary analysis of grocery, retail and rent prices has found little or no evidence of price increases in Seattle relative to the surrounding area.” In other words, employer fears associated with local minimum wage hikes have not matched reality. As more cities hike their local minimum wage in response to federal inaction, it will be interesting to see if this pattern is repeated.