Seattle’s Unemployment Rate Falls to Seasonally Adjusted 3.15%

Earlier this week I gave a thrashing to Forbes blogger Mike Patton for suggesting that an April through July rise in Seattle’s non-seasonally adjusted unemployment rate represented the early “negative financial consequences” of the city’s $15 minimum wage ordinance. Which was just plain stupid. The non-seasonally adjusted unemployment rate always bottoms out in April before rising over the next two or three months as high school and college graduates enter the labor market. Always.

But in case Patton is interested in digging his hole even deeper, he should take a look at the Bureau of Labor Statistics’ latest city-level numbers: Seattle’s non-seasonally adjusted unemployment rate fell to 3.3 percent in August, while the July numbers have been revised down from 3.7 to 3.6.

And seasonally adjusted, the Seattle’s unemployment rate is even more impressive—a mere 3.15 percent! That’s the lowest rate since April 2008, and just 0.3 points higher than the city’s freakish 2.85 percent February 2008 rate, just before the housing bubble popped, dragging the global economy into the Great Recession. By comparison, during the entire length of our extended dot.com boom, Seattle’s seasonally adjusted unemployment rate never dipped below 3.5 percent.

(And yes, we’re talking about just the city proper here, not the bullshitty three-county Seattle-Tacoma-Bellevue MSA.)

I emphasize the historical comparison (this BLS data set only goes back as far as 1990) not to boast about Seattle’s extraordinarily strong jobs market, but to warn observers that this likely isn’t sustainable. Minimum wage critics are looking for any uptick in unemployment as evidence of the detrimental effect of our $15 minimum wage ordinance, but we’ve really got nowhere to go but up. Think back again to the heady days of the dot.com boom when everybody in Seattle was getting rich: our unemployment rate bounced between 3.5 percent 4.25 percent for more than three years. And that was great! But the minute our current unemployment rate climbs back into that healthy range, critics will pronounce our minimum wage an unmitigated disaster.

And then there’s the number of food service jobs in Seattle, a number that American Enterprise Institute propagandist Mark Perry has been attempting to manipulate to prove an imagined decline in our restaurant industry. According to Bloomberg, Seattle is already number two among big metro areas in the number of eateries of per capita (and tops in the nation when it comes to the concentration of low-wage fast food restaurants). At some point that market has to get saturated, right? There’s gotta be an economic upper limit to restaurants per person, so we can’t keep outpacing the rest of the state and the nation in restaurant job growth forever.

The point is, these employment numbers are already about as good as they get, despite the fact that Seattle has long enjoyed the highest minimum wage in the nation—currently more than five times the $2.13 federal minimum wage for tipped workers! So rather than using these ahistorically robust jobs numbers as the starting point for gauging the early impact of our $15 an hour minimum wage (an unemployment rate that has never previously been sustained under any circumstances), a more apples-to-apples metric would be to compare Seattle’s economic performance directly to cities imposing the much lower federal minimum wage.

For example, Wichita—the largest city in the state of Kansas.

Wichita’s $7.25 an hour minimum wage is 34 percent lower than Seattle’s current $11 an hour rate. But is Wichita’s unemployment rate 34 percent lower? No, at a seasonally adjusted 5.2 percent, Wichita’s unemployment rate is more than 60 percent higher than Seattle’s. At $2.13 an hour, Wichita’s minimum wage for tipped workers is less than one-fifth Seattle’s current $11 an hour rate. But is Wichita’s eateries per capita ratio five times higher? Come on. It’s not even worth the effort researching that number.

If those metrics sound ridiculous, well, they’re no more ridiculous than the short-term metrics minimum wage critics are attempting to use.

The real measure of Seattle’s minimum wage experiment is not whether our jobs numbers tick up or down relative to some cherry-picked starting point or some arbitrary low-wage city comparison. The real measure of success is whether Seattle can sustain a reasonably healthy and robust economy while providing all our workers a livable wage.

For in the end, a 3.15 percent unemployment rate is not much to boast about if it leaves tens of thousands of our neighbors laboring in poverty and despair.