More than a year after a new minimum wage took effect in Seattle—$12.50 an hour now for small employers, increasing to $15 an hour by January 2018—prices at most stores haven’t gone up.
In a new report, researchers from the University of Washington presented data that showed “little or no evidence” of price increases in most sectors. Before the minimum wage law took effect, most retailers said they would have to charge more—and most low-wage workers were worried that they would have to spend more for necessities. So far, that hasn’t happened.
The researchers also checked the prices of things like rent and gas, because they wanted to understand how the law might affect the biggest expenses for low-income families. Those didn’t change either—not a surprising finding, since apartments and gas stations don’t rely on much labor.
The steady prices in the retail sector were more unexpected. “We looked in grocery stores, drugstores, and other types of retail outlets—we were focusing once again on places where your middle class or low-income families would be more likely to shop,” says Jacob Vigdor, a public policy professor at the University of Washington. “The fact that we didn’t find very many price increases in those types of outlets was a little bit more surprising to us.”
I wonder, if you went back a 100 years and looked at economic predictions, would any group come out more wrong than employers’ apocalyptic prognostication every time labor legislation was proposed?