Jeffrey Miron
In 2024, Seattle tried to raise wages for app-based workers by requiring that they receive a per-task minimum pay.
By comparing earnings for Seattle workers before and after the law went into effect, a recent study finds that while the policy raised per-task wages,
the increases in base pay per task were partially offset by a substantial reduction in average tips, a major component of delivery pay.
Moreover,
drivers experienced more unpaid idle time and longer distances driven between tasks … [And,] the policy led to a reduction in the number of tasks completed by highly attached incumbent drivers, … completely offsetting increased pay per task and leading to zero effect on monthly earnings.
Yet again, over-zealous intervention backfires.
Cross-posted from Substack.
