New evidence suggests that Seattle’s ‘radical experiment’ might be a model for the rest of the nation not to follow

From Mark Perry. Excerpts:

"Early evidence from the Bureau of Labor Statistics (BLS) on Seattle’s monthly employment, the number of unemployed workers, and the city’s unemployment rate through December 2015 suggest that since last April when the first minimum wage hike took effect: a) the city’s employment has fallen by more than 11,000, b) the number of unemployed workers has risen by nearly 5,000, and c) the city’s jobless rate has increased by more than 1 percentage point (all based on BLS’s “not seasonally adjusted basis”). Those figures are based on employment data for the city of Seattle only (not the Seattle MSA or MD), and are available from the BLS website here (data are “not seasonally adjusted”)."

"Following the first minimum wage hike in 2015, there was a decline in the city of Seattle’s employment of 11,037 jobs between April and December as reported by the BLS (from 407,073 to 396,036) and by 8,114 jobs on a seasonally adjusted basis (from 404,202 to 386,089). By both measures of employment, that April to December 2015 drop in Seattle employment was the biggest decline over any 9 month period since between April and December 2009 period during the Great Recession when there were similar, but slightly larger job declines (see top chart above). And the loss of more than 10,000 Seattle jobs (on an unadjusted basis vs. a 9,950 job loss on a seasonally adjusted basis) in just the three months of September, October and November 2015 establishes a new record for the greatest number of Seattle jobs ever lost over a three month period going back to 1990 when the BLS first started reporting the city’s monthly employment levels. Notably, the three-month job losses last year in Seattle from September to November were greater that job losses in any three month period during the last three recessions (1990-1991, 2001 and 2007-2009)."

"the number of the city’s unemployed workers increased between April and December last year by nearly 4,700 on an unadjusted basis (dark blue line), and by nearly 4,300 on a seasonally adjusted basis (light blue line). Like for the decline in the city’s employment level last year between April and December, the rise in the number of unemployed Seattle workers between April and December 2015 was the largest increase over any 9 month period since the May 2009 to January 2010 period at the end of the Great Recession."

"Following the city’s minimum wage increase in April, the seasonally adjusted jobless rate increased by more than one percentage point (from 3.45% to 4.53%) to the highest level in more than two years going back to October 2010. The unadjusted unemployment rate increased by 1.2 percentage points from 3.0% to 4.2% between April and December last year. There hasn’t been as large an increase in Seattle’s jobless rate over a 9-month period since the end of the Great Recession between May 2009 and January 2010."

" until the first minimum wage hike last April, all three of Seattle’s labor market indicators had been showing ongoing and strong signs of improvement for the previous five years: the city’s employment had been steadily increasing since early 2010, the number of unemployed workers in Seattle had significantly declined from a peak of more than 33,000 in 2009 to fewer than 13,000 by last April, and the city’s jobless rate had fallen steadily from a post-recession peak of nearly 9% to only 3% by last April (unadjusted). But then each of those key labor market variables for the city of Seattle reversed sharply starting last April"

"while the city of Seattle experienced a sharp drop in employment of more 11,000 jobs between April and December last year (light blue line, BLS data available here), employment in Seattle’s neighboring suburbs outside the city limits (the Seattle MSA jobs less Seattle city jobs) increased over that period by nearly 57,000 jobs and reached a new record high in November 2015 before falling slightly in December."

"Here is the employment for the entire Seattle MSA: https://research.stlouisfed.org/fred2/series/SEAT653NA

As you can see, employment for the MSA doesn’t show any decline, and in fact has continued to increase steadily. So the only part of the MSA showing decline last year is apparently the city of Seattle, and that’s the only part of the MSA affected by the pending 61% in labor costs for minimum wage workers."