Seattle’s Minimum Wage Experience 2015-16

Source: Michael Reich, Sylvia Allegretto, and Anna Godoey, University of California – Berkeley, Institute for Research on Labor and Employment, Center on Wage and Employment Dynamics (CWED), June 2017

From the abstract:
This brief on Seattle’s minimum wage experience represents the first in a series that CWED will be issuing on the effects of the current wave of minimum wage policies—those that range from $12 to $15. Upcoming CWED reports will present similar studies of Chicago, Oakland, San Francisco, San Jose and New York City, among others. The timing of these reports will depend in part upon when quality data become available. We focus here on Seattle because it was one of the early movers. …. Our results show that wages in food services did increase—indicating the policy achieved its goal—and our estimates of the wage increases are in line with the lion’s share of results in previous credible minimum wage studies. Wages increased much less among full-service restaurants, indicating that employers made use of the tip credit component of the law. Employment in food service, however, was not affected, even among the limited-service restaurants, many of them franchisees, for whom the policy was most binding. These findings extend our knowledge of minimum wage effects to policies as high as $13. …

Related:
Press Release

Minimum Wage Increases, Wages, and Low-Wage Employment: Evidence from Seattle
Source: Ekaterina Jardim, Mark C. Long, Robert Plotnick, Emma van Inwegen, Jacob Vigdor, Hilary WethingNBER Working Paper No. 23532, June 2017
(subscription required)

From the abstract:
This paper evaluates the wage, employment, and hours effects of the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 per hour in 2016. Using a variety of methods to analyze employment in all sectors paying below a specified real hourly rate, we conclude that the second wage increase to $13 reduced hours worked in low-wage jobs by around 9 percent, while hourly wages in such jobs increased by around 3 percent. Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies.

Five Flaws in a New Analysis of Seattle’s Minimum Wage
Source: Rachel West, Center for American Progress, June 28, 2017

A team of faculty and students at the University of Washington was tasked with assessing how Seattle’s 2014 minimum wage ordinance, which is gradually raising the city’s minimum wage to $15 per hour, is affecting low-wage workers. This week, the group released a working paper—without peer review—that looks at the ordinance’s first two phases, under which the minimum wage for most workers increased from $9.47 to $11 per hour in 2015 and then to $13 per hour in 2016.

Methodological flaws plague the group’s approach, causing them to draw conclusions wildly out of step with dozens of studies of similarly sized wage increases cited by both critics and proponents of higher minimum wages. The vast majority of rigorous, credible studies conclude that higher minimum wages have appreciably boosted workers’ earnings with little or no effects on employment. By contrast, the University of Washington researchers conclude that higher minimum wages not only reduced employment and hours worked in Seattle, but that the costs of the wage hike outweigh the benefits for the average low-wage worker—a finding at odds with the conclusions of even the most skeptical mainstream researchers. At the same time, the study’s results suggest—implausibly and largely inexplicably—that the wage hike to $13 per hour caused substantial growth in jobs paying more than $19 per hour in the restaurant industry. That’s just one of several questionable results that should give readers serious pause…..

Seat­tle and the (Method­ol­ogy of the) Eco­nom­ics of Min­i­mum Wage
Source: Ben­jamin Sachs, OnLabor blog, June 26, 2017

….Noam Scheiber also has a good story on the UW pa­per which lays out a cri­tique worth men­tion­ing here. In sum, the em­ploy­ment ef­fects iden­ti­fied by the UW study might be due, not to Seat­tle’s min­i­mum wage in­crease, but to a boom­ing job mar­ket in which high-wage jobs are re­plac­ing low-wage jobs. On this the­ory, the em­ploy­ment “losses” in the low-wage sec­tor that the UW study re­ports would ac­tu­ally just be peo­ple mov­ing from low- to high-wage em­ploy­ment. …

How a Rising Minimum Wage Affects Jobs in Seattle
Source: Norm Scheiber, New York Times, June 26, 2017

Seat­tle and the Eco­nom­ics of Min­i­mum Wage
Source: Ben­jamin Sachs, OnLabor blog, June 26, 2017

….There are, as al­ways, caveats. First, the Wash­ing­ton pa­per has yet to be sub­ject to peer re­view – it was re­leased on­line as an NBER work­ing pa­per. Sec­ond, an­other re­cent study – this one from Berke­ley – found that the Seat­tle or­di­nance “raises pay with­out cost­ing jobs.” As FiveThir­tyEight also re­ports, the Berke­ley study fo­cused ex­clu­sively on the fast food in­dus­try, and the Wash­ing­ton study it­self found no em­ploy­ment ef­fects of the min­i­mum wage hike on the restau­rant in­dus­try. One pos­si­bil­ity, then, is that the Wash­ing­ton study’s broader fo­cus is pick­ing up ef­fects that are missed by the (more tra­di­tional) fo­cus on the restau­rant in­dus­try. Many econ­o­mists, in­clud­ing Jared Bern­stein, how­ever, de­fend the method­olog­i­cal de­ci­sion to fo­cus a min­i­mum wage study on restau­rants. There are also, as al­ways, ad­di­tional method­olog­i­cal crit­i­cisms of the Wash­ing­ton study. (EPI has a press re­lease and pa­per that iden­ti­fies a num­ber of these con­cerns.)

Then there is an im­por­tant caveat in the other di­rec­tion: Seat­tle might be a city in the best po­si­tion to ab­sorb min­i­mum wage in­creases, which means – if the Wash­ing­ton study is right – that the em­ploy­ment ef­fects could be even stronger else­where. ….

The “high road” Seattle labor market and the effects of the minimum wage increase – Data limitations and methodological problems bias new analysis of Seattle’s minimum wage increase
Source: Ben Zipperer and John Schmitt, Economic Policy Institute, June 26, 2017

From the summary:
A team of researchers at the University of Washington has released an analysis of the economic impacts of the 2015 and 2016 increases in the Seattle minimum wage. The study, Jardim et al. (2017), looks at the first two stages of a phased-in set of increases that will eventually take the minimum wage in the city to $15.00 per hour. The authors of the study argue that they find large job losses associated with these first two rounds of increases, in which the minimum wage for most workers rose from $9.47 per hour to $11.00 per hour in April 2015 and then to $13.00 per hour in January 2016.

The authors’ analysis, however, suffers from a number of data and methodological problems that bias the study in the direction of finding job loss, even where there may have been no job loss at all. One initial indicator of these problems is that the estimated employment losses in the Seattle study lie far outside even those generally suggested by mainstream critics of the minimum wage (see, for example, Neumark and Wascher [2008])—as the authors themselves acknowledge.

In this report, we describe the most important shortcomings in the new analysis and make suggestions for how the researchers can attempt to correct for these problems in future iterations of their long-term study of the Seattle minimum wage.
See also: press release

Adjusting State Public School Teacher Salaries for Interstate Comparison

Source: Dan S. Rickman, Hongbo Wang, John V. Winters, Public Finance Review, OnlineFirst, Published June 20, 2017
(subscription required)

From the abstract:
Using the three-year microdata sample of the American Community Survey for 2009 to 2011, we compute public school teacher salaries for comparison across US states. Teacher salaries are adjusted for state differences in teacher characteristics, cost of living, federal tax rates, household amenity attractiveness, and location within the metropolitan versus nonmetropolitan portions of the states. We find high persistence in the state rankings of nominal public school teacher salaries across time. Yet, we also find that the rankings significantly shift with the adjustments, suggesting they are necessary for meaningful comparisons of public teacher salaries across states. The differences in teacher pay across states also greatly narrow with the adjustments. Finally, this is the first study to show and test that teacher salary comparisons across states should be based on a comparison of public school teacher salaries with nonteacher college graduates in the states, adjusted for differences in personal characteristics and effective federal tax rates.

Natural Limits of Wealth Inequality and the Effectiveness of Tax Policy

Source: Scott S. Condie, Richard W. Evans, Kerk L. Phillips, Public Finance Review, OnlineFirst, Published June 20, 2017
(subscription required)

From the abstract:
This article examines Thomas Piketty’s thesis that there are no natural limits on the accumulation of wealth. We undertake our examination in the context of a simple general equilibrium model with infinitely lived dynasties. We show that extreme wealth accumulation does not happen in general equilibrium unless capital and labor are substitutes, an assumption which also leads to unbalanced growth. We also show that even with unbalanced growth, differences in rates of return and effective labor are not sufficient to cause unbounded inequality. Only permanent savings rate differences can lead to extreme wealth concentration. Finally, we show that while a flat wealth tax will not eliminate extreme wealth concentration, both a graduated wealth tax and a flat income tax will.

Repressing Radicalism

Source: Chip Gibbons, Jacobin, June 15, 2017

The Espionage Act turns 100 today. It helped destroy the Socialist Party of America and quashes free speech to this day. …. A century later, as socialist politics gain favor again in the United States, it’s important to remember the role that brute repression played in the SP’s downfall — and the continued threat the Espionage Act poses to democratic freedoms today. ….

Toward a More Equal Footing: Early Head Start in Maine

Source: Jessica Carson, University of New Hampshire, Carsey School of Public Policy, National Issue Brief #122, Spring 2017

From the summary:
Policy makers and advocates nationwide recognize that funding for early childhood education is a crucial investment in the future. Critical foundational development occurs before age 5, and research consistently shows that high-quality early education for children leads to higher future educational attainment and lower likelihood of crime, and yields a return on investment of 7 to 13 percent.
Yet accessing affordable, quality early childhood education and care is a challenge for families nationwide. More than a quarter of families with young children are burdened by child care costs, and the availability and quality of child care and education are highly variable across states.
One program that connects the most economically vulnerable families with quality early childhood programming is Early Head Start (EHS). Subject to rigorous quality and staffing standards, implemented among the youngest children (prenatally through age 2), and delivered via a two-generation approach, EHS is a significant opportunity for providing quality care and education to a population that might otherwise struggle to access it. This brief explores the characteristics of EHS in Maine, compares them to the national landscape, and connects these findings to a discussion of the federal and state policy climates.

Key Findings:
– Maine has 837 funded Early Head Start (EHS) slots for more than 8,000 poor children age 0–2 in Maine. Limited funding means that EHS is unable to reach the vast majority of children living below the poverty line.
– Nearly half (47.2 percent) of Maine’s EHS enrollees participate via the home visitation service delivery model, compared with 37.3 percent nationwide.
– Maine’s EHS staff are more highly educated than EHS staff nationwide. More than one-third of center-based teachers and almost two-thirds of home visitors have at least a four-year degree, compared with about a quarter and a half, respectively, nationwide.

Predict Your FOIA Request Success

Source: data.world, 2017

Does your FOIA have a shot? This model is trained on 9,000+ FOIA requests tracked by MuckRock.

Predictions made using a K nearest neighbors classification algorithm with a test classification accuracy rate of 80%. Factors include word count, average sentence length, specificity (presence of nouns), references to fees, references to FOIA, presence of hyperlinks, presence of email addresses, and success rate of agency.
Related:
What makes a good FOIA request? We studied 33,000 to find out.
Source: Nicolas Dias, Rashida Kamal, and Laurent Bastien, January 30, 2017

Every journalist has ideas about what makes a good public records request. But surprisingly few people have actually tried to systematically analyze how requests can be written to improve their chances of success. To fill this vacuum, we analyzed more than 33,000 Freedom of Information Act requests and identified a few characteristics that were typical of those that were fulfilled…..

Public Education Finances: 2015

Source: U.S. Census Bureau, Educational Finance Branch, Report Number: G15-ASPEF, June 14, 2017

From the summary:
The U.S. Census Bureau conducts the Census of Governments and the Annual Surveys of State and Local Government Finances as authorized by law under Title 13, U.S. Code, Sections 161 and 182. The Census of Governments has been conducted every 5 years since 1957, while the annual survey has been conducted annually since 1977 in years when the Census of Governments is not conducted. The 2015 Annual Survey of School System Finances, similar to previous annual surveys and censuses of governments, covers the entire range of government finance activities—revenue, expenditure, debt, and assets (cash and security holdings).

This report contains financial statistics relating to public elementary-secondary (prekindergarten through grade 12) education. It includes national and state financial aggregates and displays data for the 100 largest school systems by enrollment in the United States….

State Revenues and the Aging Population

Source: Katherine Barrett and Richard Greene, PA Times, June 13, 2017

…. Not only are older people likely to need more services, especially health care; they also are inclined to bring in smaller amounts of revenue dollars, largely because their earned incomes tend to decline. Equally important, many states have tax laws that do not fully cover income from Social Security or pensions. This issue is growing in significance as the makeup of the population shifts. The number of U.S. residents over 65 is anticipated to grow by one-third over the next 15 years, according to the Census Bureau….

What Can Performance Information Do to Legislators? A Budget Decision Experiment with Legislators

Source: Labinot Demaj, Public Administration Review, Volume 77 Issue 3, May/June 2017
(subscription required)

From the abstract:
Studies on the influence of performance information on budgeting decisions have produced contradictory findings. This article offers a framework of the parliamentary context that links performance information to legislators’ budgeting decisions. The framework suggests that the impact on politicians’ allocations will differ depending on whether performance information is reflected in the budget proposal, whether the allocation issue concerns a politically difficult trade-off for the decision maker, and whether information falls into a receptive partisan mind. The experimental study uses 57 actual legislators. The results show that the introduction of performance information into legislators’ deliberation process leads to stronger deviations from the status quo allocation. This difference occurs because performance information highlights more clearly the expected consequences of budgetary changes and allows for more pronounced reactions. More informed decisions, however, might make compromise among legislators more difficult because individual positions will become more polarized.
Previous version:
What Can Performance Information Do to Legislators? A Budget Decision Experiment with Legislators
Source: Labinot Demaj, University of St. Gallen, Law & Economics Working Paper No. 2015-04, September 9, 2014

From the abstract:
Existing studies on the influence of performance information on budgeting decisions are limited and have produced contradictory findings. This paper argues that most previous work has somewhat problematically focused on self-reported use of performance information rather than on the legislative context into which performance information is introduced. This study offers a framework that links performance information to legislators’ budgeting decisions. I argue that the impact will differ depending on whether performance information is reflected in the budget proposal, whether the allocation issue concerns a politically difficult value tradeoff for the decision-maker, and whether the implications of the performance information fall into a receptive partisan mind. This paper studies these aspects by manipulating the first two of these factors in an experimental setting involving budgetary decision-making by 57 actual legislators. The control groups consist of 65 undergraduate students. The results show that the introduction of performance information into the legislators’ deliberation process leads to stronger deviations from the status quo allocation. I argue that this difference occurs because performance information highlights more clearly the expected consequences of budgetary changes and allows for more pronounced reactions. This paper concludes that more informed decisions based on good performance budgets might also create a situation in which it is more difficult for legislators to compromise because individual positions become more polarized.