Does raising the minimum wage impact crime and unemployment? Researchers say it didn’t in Seattle

WASHINGTON — As low-wage workers continue their push to increase the federal minimum wage, some cities and states already have. One of the key arguments against paying workers $15 an hour is the possible impact it will have on businesses. If labor costs suddenly go up, small businesses may not be able to afford their employees. If people are suddenly out of work, experts have feared that crime will rise with unemployment. A new study contends that this snowball effect doesn’t take place. A review of Seattle’s shift to a $15 minimum wage reveals little change in both crime and unemployment in the city. So, will it work everywhere else?

Researchers from the University of Pennsylvania say Seattle, Washington’s move to become the first U.S. city to reach $15 an hour does not appear to be affecting violent crime rates. The team notes it also does not seem to be negatively impacting local unemployment figures. Seattle instituted the policy between 2015 and 2017, gradually taking the minimum wage up to $15. It’s a figure that more than doubles the federal minimum wage and is 60 percent higher than the city’s old standard.

“Our study suggests that Seattle increased its minimum wage without compromising public safety, at least in the short run,” says study leader David Mitre-Becerril, a doctoral student in criminology at the University of Pennsylvania, in a media release.

Do local businesses become prime targets for crime?

Researchers note that previous studies on raising the minimum wage and crime have produced mixed results. In this report, study authors compared Seattle to 118 U.S. cities across 18 states. These cities did not increase wages but do have similar crime rates to Seattle. Researchers relied on data from the FBI’s Uniform Crime Reports and the Seattle Police Department during the study.

Although raising hourly wages to $15 did not change the rates of violent crimes (like murder, assault, and robbery), the numbers for property crimes tell a different story. These type of offenses include burglary, larceny, and motor vehicle thefts. The report reveals burglaries increased by between 15 and 30 percent during the study. Most of these crimes were committed in commercial buildings. Overall however, researchers say there was little change in the aggregate level of property crimes in Seattle.

While burglaries of stores may be going up, researchers did not find a rise in arrest rates among any major demographic. This includes young men, who are statistically the main drivers of crime and the most likely to be impacted by wage changes.

Why didn’t unemployment go up in Seattle?

The study finds raising the minimum wage in Seattle did not end up costing many low-skill workers their jobs. However, researchers note this may be because Seattle has fewer low-skill workers than other major cities to begin with. Being a central hub of the tech industry, much of the city’s labor force is college-educated and likely would not be impacted by taking the minimum wage to $15.

With these limitations on their study, researchers also compared Seattle to four other cities who increased their hourly wage laws during the same time. These cities include Chicago and three cities in California — San Francisco, San Jose, and Sunnyvale. The results also show few consistent increases in criminal activity after minimum wage laws passed.

“In the aftermath of Seattle’s decision to raise the minimum wage, several other U.S. cities and states plan to follow suit,” says Aaron Chalfin, assistant professor of criminology at the University of Pennsylvania. “Therefore, the question of how high minimum wages can be pushed without compromising public safety is timely.”

“However, the COVID-19 pandemic is likely to affect regional economic dynamics: Although a $15 minimum wage appears not to have disrupted Seattle’s labor market during a period of broad economic growth, it could become a structural barrier to employment during the coming months, which may have implications for public safety.”

The study appears in the journal Criminology & Public Policy.

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