Trying to tie short-term data to employment and economic trends is a dangerous game. Usually the time frame is too narrow, creating the danger of seeing patterns that don't mean anything in a larger context. Sometimes when you wait longer, what seems to have been a disaster turns into something else.
One example from last summer was when the American Enterprise Institute released an analysis of Bureau of Labor Statistics data collected and presented by the Federal Reserve Bank of St. Louis. AEI claimed that the minimum wage increase in Seattle was responsible for a loss of 1,300 restaurant jobs in that area. The think tank, which has a bias against minimum wage and regulation, claimed, "The loss of 1,000 restaurant jobs in May following the minimum wage increase in April was the largest one month job decline since a 1,300 drop in January 2009, again during the Great Recession."
Many restaurant and fast food jobs are at minimum wage levels. One of the criticisms of increasing the minimum wage has been the chilling effect it would have on employment of low-wage workers. Changes in restaurant employment are often seen as proxies for the effects of wage policies.
At the time of the AEI piece I did a detailed analysis to show how poorly the organization had examined the data. Large drops in Seattle-area restaurant employment were hardly unknown and the period between May 2015 and June 2015, immediately after the $11 an hour minimum wage went into effect, showed an increase in sector employment for the region. Cherry-picking time frames is unwise if you are really interested in addressing questions of economics and public policy.
So what has happened in the time following the AEI analysis? A sharp increase in the number of restaurant jobs after the $11-an-hour minimum wage hike. Here is the available 2015 data (chosen specifically to include the period during which there was a drop in the number of restaurant jobs) with the number of jobs in thousands:
- January 2015 -- 135.3
- February 2015 -- 134.6
- March 2015 -- 134.5
- April 2015 -- 134.3
- May 2015 -- 133.3
- June 2015 -- 134.4
- July 2015 -- 134.7
- August 2015 -- 135.3
- September 2015 -- 134.4
- October 2015 -- 135.5
- November 2015 -- 136.2
And here is the graph from the St. Louis Fed.
Yes, the loss of 1,000 jobs between April and May, after the implementation of the $11 an hour minimum wage, was large. There was a 900 position drop between August and September, which only shows that few trends work in absolute straight lines. But the gain of 1,100 jobs between May and June, at the same $11 an hour minimum wage, was larger. And that was equaled by the 1,100 position jump between September and October.
In short, the number of restaurant jobs dropped by 2,000 between January 2015 and May, but then increased by 2,900 between May and November, again after the April increase to $11 an hour. Net gain from January to November was 900 jobs.
It's impossible to say that the increased minimum wage, or anticipation of the hike, had no influence on the number of food jobs. Perhaps restaurant employment would have grown faster (although that would have been out of step with the overall historical trends in the area). Maybe some number of restaurateurs or food franchise owners gave up and closed shop with increased wages adding to other pressures.
But what is clear is that the $11 minimum wage failed to crush restaurant employment as opponents apparently hoped to prove.
