on 13 Apr 2017 22:30
on 23 Apr 2017 15:08
We study the impact of the minimum wage on firm exit in the restaurant industry, exploiting recent changes in the minimum wage at the city level. The evidence suggests that higher minimum wages increase overall exit rates for restaurants. However, lower quality restaurants, which are already closer to the margin of exit, are disproportionately impacted by increases to the minimum wage. Our point estimates suggest that a one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating), but has no discernible impact for a 5-star restaurant (on a 1 to 5 star scale).
on 24 Apr 2017 13:24
on 24 Apr 2017 13:39
dropped sharply, with perhaps as many as 4,000 jobs lost,
"If job growth in the restaurant sector had just kept pace with the state's performance … the industry could have created 5,200 jobs instead of the 1,300 that took place,"
Economists say the restaurant industry is a good barometer for the consequences of minimum wage increases because those businesses rely heavily on low wage workers, operate on small margins, and have high rates of turnover (that is, restaurants tend to pop-up quickly in some areas and go bust just as quickly in others).
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