A team at the University of Washington has been studying the effects of Seattle’s minimum wage ordinance. In January, the team provided preliminary estimates on the ordinance’s impacts on prices (they suggested “a concentration of price effects in the restaurant industry”). In April, a report providing baseline employer survey and worker interview information was released. Now, a more comprehensive report on the impacts on wages, workers, jobs and establishments has been released.

The report looks only at the first nine months of the ordinance’s phase-in.

So it should be taken with a grain of salt—as the report notes,

Economic theory predicts the long-run adjustments to a regulatory policy change are likely to be greater than short-run adjustments. Prior research shows that in the long-run, certain industries affected by the minimum wage, such as the fast food industry, have more opportunity to relocate, change the composition of their workforce, or invest in technologies that reduce their need for labor.

Importantly, the report doesn’t just compare Seattle after the ordinance to Seattle before the ordinance. It also attempts to compare what has actually happened in Seattle thus far to what would have happened in Seattle in the absence of the minimum wage ordinance.

To do so, the researchers created a “Synthetic Seattle,” which is comprised of certain zip codes around the state “that have matched Seattle’s labor market trends in recent years.” (This group of zip codes “performs very well in mimicking Seattle in the pre-minimum wage period.”) The report also uses “Synthetic Seattle excluding King County;” King County outside Seattle and SeaTac; and Snohomish, Kitsap, and Pierce counties as comparisons.

According to the report,

The major conclusion one should draw from this analysis is that the Seattle Minimum Wage Ordinance worked as intended by raising the hourly wage rate of low-wage workers, yet the unintended, negative side effects on hours and employment muted the impact on labor earnings.

The researchers “conclude that Seattle experienced improving employment for low-wage workers, but the minimum wage law somewhat held employment back from what it would have been in the absence of the law.”

Some of the findings:

• Due to the minimum wage ordinance, median wages of low-wage workers in Seattle increased by $0.73.
• The likelihood of low-wage workers in Seattle being employed and working more hours increased, but by less than in comparison areas. Thus, due to the ordinance, the likelihood of low-wage Seattle workers remaining employed decreased by 1.2 percent and hours worked decreased by four hours per quarter.
• Earnings of Seattle low-wage workers increased by $463, but earnings for those workers in Synthetic Seattle increased by $391, so the impact of the ordinance on Seattle workers is a $72 increase per quarter. ("The effects of disemployment appear to be roughly offsetting the gain in hourly wage rates," leading to the small earnings impacts.)
• Due to the ordinance, the probability of low-wage workers continuing to work in Seattle (rather than elsewhere) decreased by 2.8 percent. 
• Seattle businesses did not close as often as they had previously, but “this improvement was not as strong as in comparison regions.” The researchers “conclude that any increase in business closures induced by the Minimum Wage Ordinance was more than offset by a corresponding increase in business openings.” One reason for this: “A higher minimum wage changes the type of business that can succeed profitably in Seattle, and we should thus expect some extra churning.”

All in all, the findings of this report are fairly modest. (After all, the report only considers the increase from $9.47 to $11.) They show that there are tradeoffs involved—although wages go up for workers who keep their hours, there are disemployment effects. (See here and here for more on the minimum wage in general.)

As the researchers note, the ordinance lowered employment rates for low-wage workers. They suggest that this “needs to be followed closely in future years, because the long-run effects are likely to be greater as businesses and workers have more time to adapt to the ordinance."

Finally, the researchers

caution the reader to not interpret these results as likely to be generalizable to other cities nor to the state of Washington . . . . Seattle’s strong economy may make it capable of absorbing higher wages for low-wage workers, and this capacity may not be present in other regions.

I-1433 will be on the ballot in November. It would increase the state minimum wage to $13.50 in 2020—including in areas of the state with economies that are not as strong as Seattle’s.