Study: Seattle’s minimum-wage hikes didn’t boost supermarket prices

By Daniel Beekman / The Seattle Times

SEATTLE — Seattle’s trendsetting minimum-wage increases didn’t boost supermarket prices in the city in the two years after they began, according to a new study by University of Washington researchers.

Most child-care businesses did see their labor costs increase as the hikes were carried out, however, leading in some cases to staffing reductions, according to another UW study.

Research on Seattle’s experience has attracted widespread attention as more cities and states have moved to raise wages and as supporters and critics of such increases have sought to back up their positions.

This past October, a UW team reported that more experienced Seattle workers had seen their paychecks rise and stayed in jobs longer, while less experienced workers had seen less positive change.

In September, a University of California, Berkeley, team reviewing wage hikes in six cities, including Seattle, reported that food-service workers had seen pay increases without widespread job losses.

For the groceries study, the UW researchers recorded prices for 106 food items at six supermarkets in Seattle and six supermarkets from the same chains elsewhere in King County as the city — starting in April 2015 — raised its minimum wages toward $15 per hour.

They checked the prices a month before the wage hikes began, a year after and two years after, and they found no significant evidence of price increases attributable to the Seattle’s policy, according to the study paid for partly by the city.

The researchers also drilled down into the data to see whether the wage increases might have driven up prices for particular categories, such as nutritious foods. But they found no evidence of that, either.

Higher wages and steady prices may have provided some workers with more buying power, including for healthful items like fruits and vegetables, said lead author James Buszkiewicz, a epidemiology doctoral candidate. “This is really great news for low-wage earning Seattle shoppers,” he said in a news release Wednesday.

Arnold Ventures joined the city in paying for the study, which built on earlier but similar results shared in 2017. Seattle’s wage increases may be squeezing profits, though several new supermarkets have opened recently.

For the child-care study, UW researchers looked at payroll data from 2014 and 2016 for about 200 businesses. They also surveyed 41 child-care directors three times and interviewed 15 directors.

More than half saw their costs increase, and the most common response was to raise tuition while cutting staff hours or jobs.

Though wage hikes can help workers, they also can “shape organizational structure and service delivery,” resulting in other consequences, said lead author Jennifer Otten, a public-health associate professor.

For both studies, the researchers said their findings might not be applicable to cities without the same economic conditions as Seattle.