Emails between the Seattle mayor's office and an economist at the University of California, Berkeley show that the mayor's staff tried to deliberately undermine a University of Washington study showing that the city's $15 minimum wage ordinance was harming the city's low-income workers.
The emails show the staff went to great lengths to publicize the Berkeley economist's report and downplay the other report's findings.
"Tomorrow's release will just highlight your study, correct (ie leave the critique of the UW study until later)? … Don't want your positive news to serve as a teaser for the UW study," wrote Carlo Caldirola-Davis, senior adviser to Seattle Mayor Ed Murray in a July 19 email to Berkeley economist Michael Reich. The emails were first reported by the Seattle Weekly, which obtained them through a public disclosure request.
Reich's report, released June 20, touted the economic benefits of the city's increase of the minimum wage to $13 an hour in 2016, up from $9.32 in 2013 and part of a scheduled phase-in to $15 by 2018. "Seattle's minimum wage law is working as intended, raising pay for low-wage workers, without negatively affecting jobs," Reich said. His study made no mention of the then-forthcoming University of Washington study, despite Reich having been given an advance copy of it by the university's economists.
The University of Washington study was released June 26 as a working paper by the National Bureau of Economic Research. For advocates of a $15 minimum wage, it was a rude shock, finding that the increase to $13 had sharply reduced wealth among low-wage workers because of job losses and reductions in hours worked. Businesses used both methods to mitigate the sharp increase in labor costs they faced.
"The lost income associated with the hours reductions exceeds the gain associated with the net wage increase of 3.1 percent. ... We compute that the average low-wage employee was paid $1,897 per month. The reduction in hours would cost the average employee $179 per month, while the wage increase would recoup only $54 of this loss, leaving a net loss of $125 per month (6.6 percent), which is sizable for a low-wage worker," the study concluded. It found that payrolls for low-wage workers declined by an averaging 5.8 percent after the $13 rate went into effect, reducing those workers' income by a staggering $120 million.
Those results came before the final $15 an hour rate was phased in, suggesting the situation for those workers was going to get even worse. The study was part of a series commissioned by the city in 2014 when the ordinance raise the minimum wage was adopted. The study was a major embarassment for Murray, who had signed the ordinance and remains a staunch advocate of a higher minimum wage.
Reich's report, coming a week earlier, tempered coverage of the university's findings, giving supporters of the minimum wage a contrasting study to point to. The emails obtained by the Seattle Weekly indicate that was the Seattle mayor's plan, and Reich worked feverishly to accommodate him.
"The Seattle mayor's office would like to release the report tomorrow," Reich said in a June 19 email. "I am still making some last-minute changes to the report itself ... I've been working morning to evening every one of the past seven days to complete this. The timetable moved up over the weekend." In another email, he assured the mayor's staff he would be finished "in time for your Tuesday event."
The mayor's office held a three-year anniversary for the ordinance's signing on June 20. Reich's report was highly touted by the mayor's office, which largely ignored the University of Washington report. The mayor's office also hired the liberal PR firm BerlinRosen to publicize Reich's study.
After the University of Washington study was released, Reich became a prominent critic. In a June 26 public letter to the mayor's office, he wrote, "There is no reason why Seattle's low-paid employers should be so much more sensitive to wage increases than employers elsewhere. ... Their findings are not credible and drawing inferences from the report are unwarranted."
In the same letter, Reich said, "I received an advance copy of the UW report on the evening of June 21" indicating he saw it only after he released his own study. However, the Seattle Weekly also obtained a June 12 "dear colleague" email from the university's Evans School of Public Policy and Governance to Reich offering to provide him an advance copy so he could provide "feedback" to the authors. "I would like to receive asap an advance copy" Reich responded.
The University of Washington report's authors have defended their findings, noting they had access to much more extensive data than Reich or others used. "The [minimum wage] advocates have been critical because our report makes their job harder," co-author Mark Long, a professor at the University of Washington, told the Washington Examiner last month. If the study had found results more to the advocates' liking, they wouldn't be complaining about the methodology in the first place, he said.
Neither Reich nor the Seattle mayor's office responded to requests from comment.