Tuesday, August 18, 2015

Unintended Consequences Watch

KIRO 7, the Seattle CBS station, reports on the impact of the liberal city's new higher minimum wage law. Unintended consequences abound. Hat tip to long-time friend Earl for the link.
Nora Gibson is the executive director of Full Life Care, a nonprofit that serves elderly people in various homes and nursing facilities. She is also on the board of the Seattle Housing Authority.

Gibson told KIRO 7 she saw a sudden reaction from workers when Seattle’s phased minimum-wage ordinance took effect in April, bringing minimum wage to $11 an hour. She said anecdotally, some people feared they would lose their subsidized units but still not be able to afford market-rate rents.

For example, she said last week, five employees at one of her organization’s 24-hour care facilities for Alzheimer’s patients asked to reduce their hours in order to remain eligible for subsidies. They now earn at least $13 an hour, after they increased wages at all levels in April.

Gibson said she fully supports a minimum wage increase but was not surprised when her employees asked for fewer hours. “The jump from subsidized housing to market rate in Seattle is huge,” she said.
Two questions: First, why do we subsidize rents for the poor? This is primarily a govt. subsidy to slumlords. Second, why have a minimum wage?