Fox News is hyping a report from the conservative American Enterprise Institute (AEI) blaming a marginal decline in restaurant employment in the Seattle-Tacoma-Bellevue metropolitan area on Seattle's recently-increased minimum wage. The think tank and right-wing media outlet both overstated the significance of a roughly 1 percent change in restaurant employment and focused on apparent job losses in one month while ignoring job gains the following month.
Fox Hypes Misleading Employment Statistics To Attack Minimum Wage
American Enterprise Institute: Seattle Minimum Wage Increase “Has Started Having A Negative Effect On Restaurant Jobs.” In an Aug. 9 blog, conservative economist and American Enterprise Institute (AEI) scholar Mark Perry claimed that a modest decline in “Seattle area” restaurant employment in the first half of 2015 was evidence that an April 2015 increase in Seattle's minimum wage from $9.47 to $11 per hour -- with an eventual rise to $15 in 2017 for some businesses -- “has started having a negative effect on restaurant jobs” :
[T]here is already some evidence that the recent minimum wage hike to $11 an hour, along with the pending increase of an additional $4 an hour by 2017 for some businesses, has started having a negative effect on restaurant jobs in the Seattle area.
Perhaps Seattle's restaurant employment will recover, or perhaps it will continue to suffer from the upcoming full 58% increase in labor costs for the city's restaurants that will be phased in during the coming years - time will tell. What we know for sure is that there are now 1,300 Seattle area restaurant workers who were employed in January who are no longer employed today, so it looks like the Seattle minimum wage hike is getting off to a pretty bad start. [American Enterprise Institute, AEIdeas, 8/9/15]
Fox News Hosts: “This Is Simple Economics,” Raising The Minimum Wage Is “Nonsense.” On the Aug. 11 edition of Fox & Friends, co-host Steve Doocy and Fox Business host Stuart Varney cited the AEI blog post to claim that the April 1 minimum wage increase in Seattle to $11 per hour “led to the loss of nearly 1,000 local restaurant jobs.” When asked if raising the minimum wage was an adequate solution to income inequality, Varney responded, “Of course it's not,” calling the idea “nonsense.” [Fox News, Fox & Friends, 8/11/15]
Fox, AEI Have Misrepresented Job Trends Since Wage Increase Took Effect
Seattle Represents Less Than One-Fifth Of The Seattle-Tacoma-Bellevue Metro Area. The Seattle-Tacoma-Bellevue Metropolitan Statistical Area (MSA) had a population of nearly 3.7 million people as of July 1, 2014 -- the most recent Census Bureau estimate. The current population estimate for Seattle is just 662,400, according to the city's Department of Planning and Development. Seattle accounts for just 18 percent of the total population of the region cited by Fox and AEI in their coverage of job gains and losses. The employment trends of the entire region are not representative of the impact of a local wage ordinance in a single city. [United States Census Bureau, Population Estimates, accessed 8/11/15; Seattle.gov, Department of Planning and Development, accessed 8/11/15]
Decline In Restaurant Employment Is Less Than 1 Percent. According to data from the Bureau of Labor Statistics (BLS) and compiled by the Federal Reserve Bank of St. Louis, total employment in the combined MSA in “food services and drinking places” declined from 135,300 to 134,000 from January through June 2015. This 1,300 reduction, which is still subject to revision, represents a less than 1 percent reduction in the area's restaurant workforce:
[Federal Reserve Bank of St. Louis, accessed 8/11/15]
Total Employment Continues To Climb Despite Wage Increase. Beyond the restaurant industry, total employment in the region increased by nearly 22,000 from January through June 2015, according to data from the BLS. City, state, and federal minimum wage laws in this case would apply to all businesses, not just those in the food service industry:
[Federal Reserve Bank of St. Louis, accessed 8/11/15]
Seattle Times: Claim That Restaurant Struggles Are “Linked” To Seattle Wage Increase Are “False.” According to a March 17 report by The Seattle Times, business and restaurant owners in the city expressed little anxiety about the upcoming April 1 minimum wage increase. The paper interviewed numerous business owners and found claims that the increase would hurt restaurants to be “false” :
Conservative pundits say recent Seattle restaurant closures may have been linked to the city's new $15 minimum wage. We find that claim to be false.
Renee Erickson is closing Boat Street Cafe, her first restaurant, but she runs three others and is in the process of opening two more. Asked in an email about the closure being associated with $15, she replied: “That's weird, ha. No, that's not why I'm closing Boat Street. Would have said so.”
Erickson continued, “I'm totally on board with the $15 min. It's the right thing to do ... Opening more businesses would not be smart if I felt it was going to hinder my success.” [The Seattle Times, 3/17/15]
Fox Has A History Of Dubious Attacks On Seattle's Minimum Wage Fox News has attacked the Seattle minimum wage increase with dubious claims in the past. On July 22, the network aired several misleading segments claiming that low-income workers were requesting fewer hours in light of the wage increase so they could still qualify for government anti-poverty programs. The network's evidence for its claim came from a single interview with a Seattle-based radio host who opposes both the wage increase and government anti-poverty programs. [Media Matters, 7/23/15]
Media Matters economic researcher Alex Morash contributed to this research.