Column: Fighting trickle-down economics in Seattle

Trickle-down economics claims that if wages go up, jobs must come down. A controversial new study from the University of Washington has inadvertently fallen prey to that antiquated narrative, writes venture capitalist and minimum wage advocate Nick Hanauer. Photo by David Ryder/Reuters

Editor’s note: In June, a working paper by University of Washington economic researchers on the negative effects of Seattle’s minimum wage increase set off a flurry of dire headlines. “Seattle’s Minimum Wage Hike May Have Gone Too Far,” FiveThirtyEight’s headline read. “A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals,” the Washington Post wrote. Conservatives pointed to the study as proof that raising the minimum wage hurts low-wage workers, while economic thinkers on the left rushed to discredit it.

Making Sen$e has long covered the minimum wage debate, from a 1996 interview with Princeton professor and Obama economic adviser Alan Krueger to the series from Seattle in 2013 when a minimum wage hike first appeared on the ballot there. Economists like Diana Furchtgott-Roth, who served as chief of staff of President George W. Bush’s Council of Economic Advisers, Veronique de Rugy of the conservative Mercatus Center and John Komlos, a liberal professor emeritus of economics at the University of Munich, have debated the pros and cons of raising the minimum wage on this page.

For this latest study, we asked venture capitalist, minimum wage advocate and Seattle native Nick Hanauer to weigh in. Hanauer has been one of Making Sen$e’s most popular columnists. His post, “This is why the middle class can’t get ahead,” drew 94,000 likes on Facebook. Hanauer has defended a minimum wage hike on this page before, with Mark Perry of the American Enterprise Institute arguing vigorously against him.

Below, Hanauer argues that the study by the University of Washington is a product of trickle-down economic…

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