According to a report released Sunday by the American Enterprise Institute (AEI), the $15 minimum wage has caused Seattle restaurants to lose 1,000 jobs – the worst decline since the 2009 Great Recession.
“The loss of 1,000 restaurant jobs in May following the minimum wage increase in April was the largest one month job decline since a 1,300 drop in January 2009, again during the Great Recession,” AEI Scholar Mark J. Perry noted in the report.
The citywide minimum wage increase was passed in June of last year. The measure is designed to increase the city minimum wage gradually to $15 an hour by 2017. The first increase under the plan was to $11 an hour in April. According to the report, Seattle restaurants have already faced severe consequences as a result. In contrast, in the six years since the 2009 financial crisis, the industry has been recovering in areas without the $15 minimum wage.
“Restaurant employment nationally increased by 130,700 jobs (and by 1.2%) during that same period,” the report also noted. “Restaurant employment in Washington increased 3.2% and by 2,800 jobs.”
Supporters of the $15 minimum wage often argue it will help the poor and stimulate economic activity. Opponents, however, argue such policies will actually hurt the poor by limiting job opportunities. How little or how much of either outcome usually depends on the study. Nevertheless, even the nonpartisan Congressional Budget Office (CBO) agrees at least some job loss is expected.
Studies also show that industries with low profit margins, like restaurants, are more likely to be hit the hardest. A June report from the investor rating service Moody’s claims the minimum wage doesn’t even have to go up to $15 an hour for negative effects to occur.
From rallies to media marketing campaigns, Fight for $15 has led much of the effort to raise the minimum wage in the past year. Though claiming to be a grassroots workers movement, the group is highly influenced and funded by the Service Employees International Union (SEIU).
The SEIU has been criticized by some, like Worker Center Watch (WCW), for using the Fight for $15 protests as a way of bypassing labor laws to more easily unionize fast food workers. Additionally, according to a report from the Center for Union Facts, a minimum wage increase would benefit the SEIU directly while hurting non-unionized SEIU competitors.
Fight for $15 and the Seattle City Council did not respond to requests for comment from The Daily Caller News Foundation.