Why don’t people who want a $15 minimum wage just move to Seattle?

This is actually more of a question that I have for other people. I’ll do my best to give my thoughts on the subject, but I have yet to hear a good one.

So my thought on the subject is that local and state governments don’t need the federal government’s permission to raise the minimum wage. So if you, as a citizen think that is brilliant, why not just move to the city that’s already done it? What are the downsides?

Actually maybe it would be more interesting to start with the arguments for a minimum wage. Here’s a Huffington Post argument for raising the minimum wage in general.

1. Seven Nobel Laureates in Economics endorse the higher minimum wage to $10.10 by 2016, saying it does not lead to lower fewer jobs.
2. Job losses from raising the minimum wage are negligible.
3. It is a myth that small business owners can’t afford to pay their workers more, and therefore don’t support an increase in the minimum wage. In fact, a June 2014 survey found that more than 3 out of 5 small business owners support increasing the minimum wage to $10.10.
4. The value of the minimum wage has fallen dramatically. Since the minimum wage was last raised in 2009, the price of apples went up 16%, bacon 67%, cheddar cheese 21%, coffee 27%, ground beef 39%, and milk 21%. The minimum wage went up 0%. Plus, in the 1960s the minimum wage was essentially half the average wage. If that was still the case it would be $12.50 an hour.
5. Saying we have a “free market” that will take care of workers is a myth. No corporations rely on the mythical “free market,” why should workers?
6. In fact, one way to look at this is that low minimum wage laws are government subsidies to low wage businesses.
7. There is widespread religious support for living wages.
8. Worker productivity has gone up much faster than wages.
9. It is a myth that the minimum wage is only for teens and entry level workers.
10. There is widespread bipartisan support for raising the minimum wage. In a2015 poll, “75% of Americans, including 53% of Republicans, support raising the minimum wage to $12.50” by 2020.
11. You know the minimum wage is too low when….WALMART announces it will raise its minimum wage to $10 an hour by February next year.

This sounds pretty compelling on the surface. There’s a lot to consider here. This makes it seem like being opposed to a minimum wage hike is borderline insane. Could it be true that there’s nothing but upside to the minimum wage going up? It’s not going to damage job growth (1,2), businesses can afford it if they wanted to (3,8,11), the people need the government’s protection from greedy business owners (5,6), and everyone else is doing it (4,10), so why shouldn’t we? Plus it’s just the right thing to do (7,9).

Well, we can! For example, Detroit has been run by nothing but liberal Democrats for over half a century. Why don’t they just raise the minimum wage to $15 an hour so that this utopia will displace all the horrifying urban decay that they preside over? No one could stop them from doing it. The government hasn’t instituted a maximum wage.

Or forget waiting for our cities to listen to reason, we can all just move to Seattle and as the nation sees poverty disappear, job growth remain stable and everything flourish there, we will see states and cities tripping over themselves to do the same.

My guess is that you’re thinking that would never work. But ask yourself, why do you think so? It sounds like there’s no downside to raising the minimum wage, so why shouldn’t we all just move to Seattle?

Okay, so having 300 million people move to one city probably won’t work. I can understand that much. But ask yourself, “Why don’t YOU move to Seattle?”

I bet the first thing that crosses your mind is that it will be hard to find a job. No matter what links 1 and 2 say up there, I think we all have an intuitive sense that if we are demanding more money from someone they are going to be more reluctant to give it to us.

But ignore that little voice. The Nobel laureates have spoken. Do you think you know better than them?

Friends and family? Get them to move with you! Job growth is fine there. It’s a bustling city! There’s no reason it couldn’t take in a small community of (if you’re lucky) 100 people!

This is where I run into a wall. Given the kinds of arguments put forth by outlets like the Huffington Post, it seems insane that every liberal state and city government wouldn’t be doing exactly the same thing as Seattle and anyone who was unfortunate enough to be locked into a ‘red zone’ wouldn’t be high-tailing it out of there.

Of course, I don’t think the arguments hold up to scrutiny. With the recent discussion of Trump and Bernie talking about companies going overseas for their manufacturing needs it should be obvious why they are doing so. Because labor is cheaper over there. They can get more done for less price. That means they can charge less for those goods, which allows them to out-price the competition.

Now, to be clear I want to raise the points made by 3 and 11 up there. No one is saying that higher wages holds down growth or productivity. No one is opposed to higher wages in general. The problem is not with someone giving their workers better pay, it is with dictating that they must give their workers better pay. Ask yourself, why don’t the workers just ask for more money? Because there is someone willing to do it for less. If no one came to work for you because you were only offering minimum wage, you’d hike it in a hurry. It doesn’t take a law, it just takes more jobs. If everyone in town needs a high schooler to work for them, and there’s not enough high schoolers to go around, you can be certain that they will start out-bidding each other for the labor. They will be willing to pay higher than the minimum wage. If wages go up naturally, that’s fantastic! When they go up because of force, you are risking all sorts of side-effects that may be difficult to predict but are certainly going to happen.

So should we move to Seattle? I don’t think so. I don’t know what the effects will be long-term. There are far too many variables to even know what to look for. This is not a controlled experiment. I think the incentive for business owners is to reduce their costs, which means reducing labor, maybe through automation. If it’s cheaper to buy robots than to pay workers, you can be certain that people will buy the robots, which may, paradoxically, provide jobs in robot engineering, maybe even in Seattle.

I think we’ll see less jobs and higher prices than we would have otherwise. That phrase is important. It’s possible Seattle, due to factors other than minimum wage, will continue to add jobs. The question isn’t “Have jobs gone up or down?” but “Would jobs have gone up more, or down less had there not been a minimum wage hike?” This is why it is dangerous to rely on broad statistical measures to define the success or failure of policy decisions like this.