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Nobody’s Perfect

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The mistakes men make live after them…

Last week, I wrote a column for National Review Online about the minimum wage.

http://www.nationalreview.com/article/417280/voters-want-higher-minimum-wage-voters-are-wrong-michael-tanner

Most of the column dealt with some new studies that showed minimum wage increases resulted in job losses and hurt the vary low-wage workers they are designed to help. I also looked at where the Republican presidential candidates stand on the issue. Santorum is in favor of an increase. Rubio and Jindal oppose an increase but support the idea of a minimum wage. The others, including, surprisingly, Jeb, oppose the minimum wage to one degree or another.

In the course of the article, I mentioned that Seattle had recently voted to raise its minimum wage to $15/hour by 2022. I wrote that, while it was too early to know the results of that change, “There has also been a sharp fall-off in the number of firms seeking a business license in the city that has roughly corresponded with the passage of the minimum-wage hike.”

I was wrong.

The information came from looking at the Seattle Business License Database, which I compared with information supplied by economics blogger Evan Soltas. However, searching by specific NAICS code only returns those companies with a description, which is less than the total number of licenses. For every category except drinking places, this difference was not significant, which led me to believe, that the differences between the figures found through this method and Evan’s were directly comparable, especially because the number of licensed businesses had declined from 3829 to 3808 from December 2014 to March 2015 via Evan’s calculations.

The vast majority of the drop-off was concentrated in code Drinking Places (alcoholic beverages) and with this reduction the aggregate number of licensed business in the categories analyzed was lower. Thinking this odd, I hads my research assistant contact Evan to see if he had any thoughts on the matter. He later responded that he did not see the same effect, and that he used the index of the 100 most popular North American Industry Classification System codes for his results, which showed business licenses both with and without description. In using the index , we saw that there was a discrepancy between the licenses listed with descriptions in Drinking Places (275) and the total amount of licenses listed (currently 403).

The net result is that, while there has indeed been a decline in some categories such as “limited service restaurants,” there has not been an overall decline in business applications in the food and beverage industry.
By that time I was able to determine this, my NRO column had not only been printed, it had been picked up by other outlets. Mistake compounded.

I believe the basic article remains accurate, but clearly, in commenting on Seattle business licenses, I blew it. I regret the error.

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