Does a high minimum wage dampen job and earning opportunities for low-skill workers? Evidence suggests it does.

The $15 minimum wage experiment continues to provide evidence that the higher wage depresses job opportunities and earnings for lower-skilled workers. That finding, reported in June 2017 by a University of Washington research team studying the phased-in Seattle minimum wage hike, seems backed up by a couple of news items in recent days.

The Puget Sound Business Journal reports,

The Shake Shack restaurant opening in the heart of Amazon’s headquarters campus will have an automated ordering system to keep labor costs down.

High labor costs matter.

The Shake Shack planned for 2115 Westlake Ave. in Amazon’s South Lake Union headquarters campus will have one cash register and seven self-serve kiosks that let customers enter their own orders, the restaurant chain confirmed Tuesday.

The kiosks cut expenses in markets with high labor costs, such as Seattle and the Bay Area, Shake Shack Inc. CEO Randy Garutti said last week

Similar news about McDonalds, reported in the Seattle Times.
More than 170 McDonald’s restaurants in Washington are getting a new look as part of a $6 billion chain-wide upgrade that will include automated ordering systems and parking spaces for pickup of food ordered and paid for via mobile devices.
Arguably, the increased minimum wage just gave topspin to tech innovations already underway. But it’s hard to contend it had no downside effect on wages and employment.
 
Meanwhile, in D.C. – not known as a conservative hotbed – the City Council is moving ahead on plans to overturn a minimum wage initiative adopted by voters in June, according to the Washington Post.

In June, D.C. voters made a surprising but decisive choice. By a 12-point margin, the District approved raising the minimum wage to $15 an hour for restaurant workers and others who earn tips.

Less than 24 hours later, at least one council member was already trying to overturn the decision made by voters. “It’s not really the will of the people; it happens to be the will of the 17 percent of people who showed up and voted,” said Councilman Jack Evans.

Now seven of the council’s 13 members have sided with lobbyists for the restaurant industry and endorsed a plan to disregard Initiative 77. Even the mayor, who also opposed the measure, has said she would “really sit down and evaluate its impact.” They worry that eateries will go out of business because of higher labor costs and rising prices if the measure goes into effect. 

For a scholarly look at how minimum wage increases have been adopted across the country, we recommend this AEI report. Here’s the abstract.

This paper presents a dataset that tracks effective minimum wage rates across the U.S. states, including the District of Columbia, from January 1, 2011 to January 1, 2018. We link minimum wage changes to their underlying legislation or ballot initiative and document key dates in their legislative histories. The key dates we track include the dates on which each measure was approved by the legislature, signed by the state governor, or passed via ballot initiative. We then calculate lags between the date on which each minimum wage increase was approved and the date on which it came into effect. Comparing minimum wage increases implemented via ballot initiative to those passed by state legislatures, we find that minimum wage increases enacted through legislation tend to have longer lags to the first increase, longer lags to the last scheduled increase, smaller initial increases, and larger total increases than minimum wage increases approved by ballot initiative.

The decisions – and how they are made – matter.