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?