Seattle’s Mayor Caught “Fixing” the Berkeley Study on Minimum Wage

By August 8, 2017Washington

Mayor Ed Murray More Concerned about Politics than the Truth

Before a University of Washington Study on the effects of minimum wage was set to be released to the public, a preliminary report was first released to Mayor Ed Murray’s office. That may not have been a problem if the study had supported Mayor Murray’s political agenda like the first study on year one did.

The first year of the U.W. study, with minimum wage raised to $11 an hour, showed no significant impact on businesses or jobs. The study failed to make waves of any kind.

However, since the second study releasing the effects of a $13 minimum hour showed a loss of jobs and an overall loss of wages to minimum wage employees, Ed Murray knew he had to do damage control. The best way to do damage control is to make the situation and the facts muddy and unclear.

A reporter for the Washington Free Beacon, Bill McMorris, has recently blown the lid off the scandal of two conflicting reports on the effects of Seattle’s new minimum wage. Through a Freedom of Information Act request, WFB was able to review the email correspondence between Ed Murray, a Union Public Relations Firm, and the University of California Berkeley Research Team.

It wasn’t a coincidence that U.C. Berkeley would be chosen to do a “counter” study. As another Forbes writer, Michael Saltsman, theorized in June, the Mayor requested the Berkeley Study to come out prior to the scheduled release of the U.W. study.

It shouldn’t be surprising that Murray chose U.C. Berkeley. None of the six economic reports they have generated on the effects of minimum wage have showed any negative impact, something highly unlikely in any study.

Saltsman noticed that the U.C. Berkeley study was “prepared at the request of the Mayor of Seattle.” McMorris was able to confirm exactly how and to what extent the study was “unbiased.”

Seattle Success in Minimum Wage Hikes is Critical for Fight $15

Seattle is the first major city to raise minimum wage to $15 an hour. Seattle is an optimal case study for how minimum wage hikes impact businesses and jobs.

Some of the reasons for this are because Seattle is a thriving city, has one of the lowest rates of unemployment in the country at 3.2%, has seen increased job growth, and has a skilled workforce.

Before Seattle’s first minimum wage increase to $11 an hour, the majority of Seattle’s lowest paid workers already made over $11 an hour. That’s the main reason that the first wage increase had little impact on jobs or workers.

However, U.W. found that with a $13 minimum wage, those lowest paid workers actually saw a monthly decrease of income from cut hours at work. On average, workers saw their income drop by $125 a month. The city also saw a loss of 5,000 jobs in 2016.

One of the reasons that U.W. could show a decrease in income and jobs is because it had access to the microscopic data which included paycheck data, hours worked, jobs created and lost and other granular data not available for any economic study before.

But, ironically, just weeks before the U.W. study was publicly released, U.C. Berkeley released a study that analyzed only the restaurant sector of Seattle from a wider view and found no negative impacts to the minimum wage. Interestingly, the U.C. Berkeley analysis agrees with the U.W. analysis of the same sector.

U.C. Berkeley chose what may have been the only positive aspect out of the U.W. study and published a conflicting study on minimum wage.

It is important to understand that if Seattle strongly shows negative job and wage impact from a rising minimum wage, that the Fight for $15 will have a much harder time convincing politicians and the public to support a minimum wage. The Fight for $15 is primarily funded by unions.

If Seattle, with a strong economy suffers a loss of nearly 5,000 jobs, imagine what will happen in weaker economies where companies have a smaller profit margin.

Email Correspondence Shows “Cooked” Study by U.C. Berkeley

An email from the Mayor’s office instructed economist Michael Reich not to mention the U.W. study “Leave the critique of the UW study until later. . . Don’t want your positive news to serve as a teaser for the UW Study.”

In fact, numerous emails show continuous correspondence between the Union PR firm, the Mayor’s office and U.C. Berkeley tweaking the “unbiased” study until it was approved by the mayor’s office.

“These emails are further proof that the Berkeley team is motivated by ideology, not evidence.” Saltsman told the Washington Free Beacon.He also said the level of coordination undermines Reich’s claim to be a disinterested academic and called the study a “sordid” affair.

In addition Reich coordinated with BerlinRosen, a large union public relations firm to draw attention to his study. BerlinRosen has collected nearly 2 million dollars from union dues. Reich exchanged emails with two staffers to coordinate “leaks” and craft a press release about the study.

Increasing the Bottom LIne while Staying Compliant with Employment Regulations

Even with the new evidence of U.C. Berkeley’s biased opinion, the fight for and against rising minimum rates is not likely to diminish. Fight for $15 is pushing in large and small markets across the country. In addition, the fight for mandatory sick leave, paid family leave, secure scheduling, and other employee benefit laws are also being debated across the U.S.A.

Business owners and employers should be aware of local legislation, opinion and events that will affect their companies. As local government entities look at raising minimum wage, implementing sick leave laws, or family leave laws, these businesses must find software solutions that maintain their bottom line in an increasingly compliant environment.

SwipeClock provides the ideal software for lowering total cost, and thus increasing the bottom line, while ensuring compliance with employment regulations.

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Resources

Forbes The Problem with a new study on Seattle’s 15 minimum wage

Seattle Weekly: The City Knew the Bad Minimum Wage Report was Coming Out, so It Called up Berkeley.

Union PR Firm, Seattle Mayor Coordinated on Pro-$15 Minimum wage Berkeley Study by Washington Free Beacon

University of Washington Minimum Wage Study

University of California Berkeley Minimum Wage Study

Written by Annemaria Duran. Last updated on August 8, 2017