minimum wage

Same Question, Different Answers: How It Happens

How can two studies researching the same question come up with two different answers? That was the dilemma that several media outlets recently had to confront, with the release of the results of two studies looking at the impact of the city of Seattle’s minimum wage ordinance, which raised the minimum wage rate for workers in that city. Even though the studies were looking at the same issue, they came up with results that contradicted each other.

The results of the first study indicated that the wage increase didn’t reduce overall job numbers or hours of work. Media: “Yay! Minimum wage increases are a good thing.” But then the results of the second study indicated that the wage increase caused declines in both numbers of jobs and amounts of work. Media: “Um…okay, maybe minimum wage increases aren’t that great.”

The fact that these studies had different results doesn’t mean that one study is right and the other is wrong, or that both studies are wrong and nobody really knows what happened. The studies are admittedly not easy reading – both use complex forms of economic analysis that, frankly, I wouldn’t try to explain because I would probably get them wrong. But we can still look at how the studies were designed and carried out to see if there are reasons why their results might differ.

Here’s a table that (more…)