A study on the effect of Seattle’s new minimum wage law is making the rounds today. The Washington Post warns in a headline that “a ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals,” while a FiveThirtyEight headline states that “Seattle’s Minimum Wage Hike May Have Gone Too Far.”
Read the Economic Policy Institute’s rebuttal of the study, however, and you’ll find that it suffers from several major flaws.
The employment responses estimated by the authors are well outside the bounds of most published research.
The study implausibly finds employment changes due to the minimum wage in parts of the labor market where there should have be none.
The study excludes an important group of workers, representing roughly 40 percent of the workforce: those working for employers with businesses in multiple locations.
Perhaps it won’t come as a surprise that another study of Seattle’s minimum wage law, this time out of UC Berkeley, found that the law “raises pay without costing jobs.”
So what to believe? In cases like this, I turn to Bertrand Russell’s advice for skeptics:
When the experts are agreed, the opposite opinion cannot be held to be certain. When they are not agreed, no opinion can be regarded as certain by a non-expert. When they all hold that no sufficient grounds for a positive opinion exist, the ordinary man would do well to suspend his judgment.
In this case, the experts are clearly not agreed – so, as Russell writes, “no opinion can be regarded as certain.” Don’t take for certain the results of this study. Instead, take them with a grain of salt.