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Recently, a University of Washington study released on the impact of raising Seattle’s minimum wage from $11 to $13 in 2016 showed some disturbing effects. It revealed that the number of minimum wage jobs declined and while lower-income workers were making higher wages they were employed fewer hours, resulting in a net loss in wages.

The study, commissioned by the city, was so disheartening that the mayor of Seattle decided to get another study done that would show better results. But trying to come up with another study that proves an argument because the implications of the first are not what were expected won’t help the people impacted by the policy. It will keep the minimum wage debate alive, though.

That said, some limitations to the University of Washington study, as pointed out by economist Michael Strain, show that Seattle’s experiment won’t end any time soon.

The data it used make it difficult in some instances to determine whether a particular job is in the city of Seattle or elsewhere in Washington state, and the study attempts to deal with this challenge by limiting its scope to workers at single-location firms. The data also don’t include contractors.

To determine the effects of Seattle’s minimum wage increase, the study compares hours and wages in Seattle to those in neighboring counties, before and after the Seattle increase. This is reasonable, but one could also reasonably be concerned that those neighboring counties are not the best comparison group. To address this possibility, the study uses more complex statistical methods. There again, it’s reasonable to question those methods — but not the conclusion that the Vigdor study materially advances our understanding of the effects of the minimum wage. It’s hard for me to understand how any economist could conclude otherwise (emphasis added).

At the same time, the Vigdor study is just one study. Should it increase our confidence that minimum wage increases can hurt low-wage workers? Of course. Does it prove that point for all time in all places? Of course not. The Vigdor study covers only one city. The economics of city-specific minimum wage increases are probably somewhat different from that of state or federal increases. It’s also hard to be sure that what happened when Seattle increased its wage to $13 per hour in the context of getting to $15 per hour can be generalized to what might happen if, say, Kansas City increased its minimum wage to a different amount in a different context over different years.

So where does this leave the debate over minimum wages? Right where it was before: confused.

In other words, the University of Washington study was conducted as professionally and with the best methodologies available to economists to sort through the information. But circumstances are not static, and trying to prove an overall argument of the minimum wage debate based on one city’s experience is an instance where politics gets in the way of policy.

The rise in the wage was part of a three-year plan to get Seattle’s minimum wage to $15 per hour. The last bump took effect at the beginning of this year. Concerns that the impact of such a sharp minimum wage increase hurts lower income workers are legitimate even as the impact of the final increase have yet to be determined.

The Vigdor study does not subscribe to a social policy. It merely points out the effect of the social policy chosen in Seattle for Seattle are not what the engineers had hoped. As Strain points out, popular solutions are not necessarily the best solutions for the people the solutions are targeted to help.

When thinking about whether minimum wage increases are good or bad, you have to think clearly about the social goal you are trying to achieve. If your goal is to help reduce income inequality and to increase the earnings of some middle-class households, then the minimum wage is not a crazy policy.

But if your goal is to help the least skilled, least experienced, most vulnerable members of society to get their feet on the first rung of the employment ladder and to start climbing, then the minimum wage is counterproductive. Its costs are concentrated among those vulnerable workers. It is an obstacle in their paths. It is bad policy.

Read the complete Strain article at Bloomberg

What’s a better solution — higher wages at the cost of jobs, or more jobs with lower wages? If you’re interested in seeing more people working, the latter is the better option. But it’s not just about the number of jobs. That’s why several economists question the logic of the “Fight for $15” movement or other minimum wage arguments.

“While boosting wages for workers is critical, helping workers retain their jobs and stay on the income ladder makes more sense for the economy.”

That’s what economist Aparna Mathur says in a recent article on wage hikes. Even the nonpartisan Congressional Budget Office found that raising the federal minimum wage to $10.10 per hour could result in the loss of 500,000 jobs.

Mathur notes that several localities aim to increase the minimum wage in the next few years, and warns that the people who are going to feel the impact are the very workers who would benefit from not being paid a mandated minimum wage.

Most policies of any kind involve trade-offs, and minimum wage hikes are no exception. When the government mandates that employers must pay minimum wage workers more — i.e., the hike is not because of any increases in productivity or skills — employers will strategize about how to recover the added costs. Can they pass them on to their customers? Should they invest more in automation? And of course: Should they decrease the size of the work force?

Mathur acknowledges disagreement in the economic models on the impact of minimum wages. It’s more than just the number of jobs available, the minimum wage is a variable with major reverberations to the overall economy and how work is conducted.

She points to the results of a major recent study by New York University. The study found that raising the minimum wage had a small impact on the overall drop in hiring, but a much greater impact on the amount of work each worker is doing.

Hours worked fell sharply, with reductions as large as 3% across all workers and 25% for the lowest-wage jobs. Presumably, the study’s authors wrote, some of the reduction was caused by employers economizing on labor. However, they also wrote, hours worked also likely fell because employers hired more productive workers.

And what’s the outcome for managing less productive employees? Automation, of course. The dreaded “robots.”

Many stores and fast-food restaurants are already planning this transformation. For example, McDonald’s plans to move away from cashiers to touch-screen kiosks nationwide and to allow mobile ordering rather than pay an employee $15 an hour to bag French fries. Wendy’s is considering a similar move. Walmart already is automating many positions that employ hourly workers.

Mathur says if government policy really wants to help low-wage workers, it could try more creative approaches, like the Earned Income Tax Credit program.

A targeted program with no risk of job loss, the EITC has been proven to lift people out of poverty, and it is the best way to boost incomes for poor households.”

At the same time, encouraging upgraded skills for workers through greater investments in on-the-job training and paid apprenticeship programs for younger workers would allow for greater upward mobility even for workers starting off in minimum wage jobs.

While boosting wages for workers is critical, helping workers retain their jobs and enabling them to move up the income ladder is even better. The risk of job loss that comes with a minimum wage hike threatens the ability of these workers to get on that ladder. States that are on track to approve such an increase should proceed with tremendous caution.

Wage Hikes: Proceed with Caution

The Problems With Seattle’s Minimum Wage Debate

How the ‘Fight for $15’ Movement Can Undermine Those It Aims to Help