The Latest Restaurant Minimum Wage Study Doesn't Even Make Sense Internally
By Tim Worstall
We have yet another entry into the crowded field of studies concerning the minimum wage in the restaurant industry. It says there isn’t that much effect either way and therefore all the usual suspects are all over it. The problem with the paper though is that it doesn’t actually make sense by its own internal logic. This error is actually right there in the introduction in fact. They manage to believe two entirely opposing things about that minimum wage. Firstly that it has no employment effects and secondly that it raises productivity. These cannot both be true: because a change in productivity has employment effects.
And we’d be right to be extremely suspicious of anyone or any report that manages to make that blunder. The usual suspects of course include this:
Take that lobbyists.
When restaurants raise prices to offset moderate increases to the minimum wage, the industry as a whole is not adversely affected. Like, at all. This, the conclusion of a study (see below) released last month by theCornell University School of Hotel Administration entitled “Have Minimum Wage Increases Hurt the Restaurant Industry? The Evidence Says No!”. After an exhaustive audit of tipped and non-tipped minimum wage scenarios at state and federal levels over the course of a decade, professors Michael Lynn and Christopher Boone believe the industry needs to be more receptive to modest hourly pay hikes.
I would give some marks though as the site does post the report itself. Which contains this: