Seattle’s Minimum Wage Hike Is Boosting Child-Care Costs But Not Food Prices

Findings are from University of Washington research focused on the Impact of the city-mandated pay increase.
 
 
  • Seattle’s Minimum Wage Hike Is Boosting Child-Care Costs But Not Food Prices

Two recent studies conducted by researchers at the University of Washington zeroed in on the impact of the 2014 Seattle minimum wage law, which increases the base wage incrementally through 2021 to $15 per hour.

The study found that the rising wage standard is taking a bite out of child-care businesses in the city, causing many to raise fees and tuition or scale back staff hours in response to the increased cost burden. The study used state payroll data from some 200 child-care businesses and examined multiple variables, including staffing levels, wages and business payrolls from 2014 and into 2016. That research also was combined with surveys and interviews of child-care directors.

“The study found that more than half of Seattle child-care businesses were affected by increased labor costs as the policy increased to $13 per hour, and that the majority will be impacted as the policy increases to $15 per hour between 2019 and 2021,” the university noted in a statement about the study, which was published in an academic journal.

On a separate front, another study by UW researchers examined the impact of the city’s phased-in minimum-wage hike on area grocery prices. The researchers examined the concluded that the increased base wage “had no significant impact” on area food prices.

“This is really great news for low-wage earning Seattle shoppers,” says James Buszkiewicz, a doctoral candidate in the Department of Epidemiology and lead author on the study. “Typically, null findings do not get that much attention, but in this case, if local food prices remain steady while earnings increase for low and minimum wage workers, then that could mean increased purchasing power for things like fresh fruit and vegetables for the consumers that need it most.”

The study, also published in an academic journal, involved studying food prices for 106 grocery items across six large supermarket stores affected by the wage ordinance.  The researchers looked at prices over a period of time prior to the implementation of the new minimum-wage law and post-implementation.

“The paper also sought to evaluate the potential for differential price changes that might be related to diet quality, including analyses by food group, level of food processing and nutrient quality,” a university statement says. “The authors found no evidence of significant price increases in any of the diet-quality measures examined that could be attributed to the minimum wage ordinance.”

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