One of the claims of minimum wage advocates is that a high minimum wage will actually save employers money by reducing employee turnover and the associated costs of recruiting and retraining new workers.

But even liberal economist Paul Krugman understands the obvious flaw in that logic:

“…there is a fundamental flaw in the argument: Surely the benefits of low turnover and high morale in your work force come not from paying a high wage, but from paying a high wage “compared with other companies” — and that is precisely what mandating an increase in the minimum wage for all companies cannot accomplish.”

If every employer is required to provide the same high wages, turnover becomes a moot point because that high wage is no longer an incentive for an employee to remain with one employer over another.  Paying workers higher wages than other employers is what reduces turnover costs.  So mandating a high minimum wage will do nothing to reduce employee turnover and its associated costs. 

The most recent study of Seattle’s $15 minimum wage by a team of University of Washington (UW) researchers appears to support this reality.

According to the UW study:

“…the minimum wage may be increasing turnover in the low- wage labor market. This may be a healthy development, reflective of employees identifying new opportunities and leaving their jobs voluntarily. It could, however, also reflect increased firings and dismissals.”

So Seattle's low-wage workers are either leaving in search of better jobs (which could very well be the case since low-wage workers in other cities in the state are enjoying higher earnings), or employers are handing out pink slips.  Either way it is not the win-win result minimum wage advocates promise when pushing high wage laws.