Panel Paper: The Effects of Local Workplace Regulations on Workers’ Earnings Dynamics: Evidence from Seattle

Friday, July 20, 2018
Building 3, Room 207 (ITAM)

*Names in bold indicate Presenter

Hilary C Wething, University of Washington

Local employer policies, such as higher minimum wages, have swept across the United States over the last decade. Intended to reduce inequality within the workplace, these policies can be viewed as a response to evidence documenting the rise in “precarious” or “bad” forms of non-traditional full-time, full-year work in the low-wage workforce. Low-wage workers in precarious jobs, many of whom have not seen a real wage increase in over twenty years, experience a range of uncertain work arrangements, including temporary and on-call work, involuntary part-time work, or unpredictable schedules. By shifting the risk of employment from employers onto workers, these jobs increase workers’ between-job instability through higher rates of job churn, and workers’ within-job instability through increased hours volatility within a consistent job. To the extent that municipal policy strives to improve the welfare of the workers in their city, evaluation of the effect of employer policy on earnings and employment dynamics is imperative.

This paper expands the scope of current evaluations on local employer regulations to examine the impact of Seattle’s Minimum Wage Ordinance on low-wage workers’ earnings and hours volatility and job turnover. I employ a quasi-experimental research design to compare low-wage workers in Seattle to low-wage workers in the rest of Washington State using quarterly employer-employee matched administrative data from Washington State’s Unemployment Insurance program. I rely on a synthetic control method to construct a weighted average of workers in regions in Washington with similar labor market pre-trends as Seattle to identify treatment effects.