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Study: Little or No Price Increases as Seattle Raises Minimum Wage

An early report finds increasing the minimum wage has had little effect on prices in Seattle. (Fibonacci Blue/Wikimedia Commons)
An early report finds increasing the minimum wage has had little effect on prices in Seattle. (Fibonacci Blue/Wikimedia Commons)
April 22, 2016

SEATTLE - As supporters in Washington gather signatures for a statewide initiative to raise the minimum wage, a new analysis of Seattle's minimum-wage increase is combating fears that higher wages mean higher prices.

The University of Washington study has found "little or no evidence" that the cost of rent, grocery-store food or other services has increased a year after the city began incrementally raising wages to $15 an hour.

Professor Jacob Vigdor was the principal investigator of the city-commissioned study.

"Our price analysis found that, for the most part, prices in Seattle have remained relatively stable," says Vigdor. "Since the minimum wage first went up on April 1, 2015."

Vigdor says there is some evidence restaurant prices may have increased slightly. More than 500 Seattle businesses responded for the analysis, and although none of the businesses said it had to take drastic measures, some owners of small businesses reported working more because they said they couldn't afford to hire more employees.

A statewide initiative to raise the minimum hourly wage to $13.50 by 2020 may be heading for the ballot in November. I-1433 needs around 250,000 signatures by the end of June.

The increase would affect more than 700,000 workers, according to Raise Up Washington. Vigdor says cities and states nationwide are watching the Seattle experiment with the minimum wage closely.

"I think there's going to be a high demand for learning about Seattle," he says. "Because Seattle moved a little bit earlier than a lot of these other places around the country."

Vigdor and his team are continuing research on the minimum wage's effect on prices and workers over the next year.

Eric Tegethoff, Public News Service - WA