Surprise! New Harvard Study Says Increasing Minimum Wage HURTS Restaurants
Progressives have no understanding of elementary math. 1, 2, 3, 4, etc. might as well be foreign policy. Or a foreign accent. A foreign body in their colons. You pick. Despite it never being successful, the left is still trying to raise the minimum wage (see KARMA: Leftist Bastion UC Berkeley Laying Off Staff Due to Minimum Wage Hike and THANKS #Fightfor15: McDonalds Replacing Minimum Wage Employees with… Robots?!). Ever heard of inflation? The word applies to more than just the circumference of a liberal's conceited head.
A new study from Harvard reveals a higher minimum wage has resulted in restaurant closures, and reduced employment opportunities for inexperienced workers. Control your shock.
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).
Translation: rich, elitist restaurants aren't as affected as restaurants patronized by middle class people, which likely employ middle class to poorer people. But that's just my hot take. Supersize it next time.
While some studies find no detrimental effects on employment (Card and Krueger 1994, 1998; Dube, Lester & Reich, 2010), others show that higher minimum wage reduces employment, especially among low-skilled workers (see Neumark & Wascher, 2007 for a review).
University speak can be convoluted. Indulge me a second as I explain it for publicly-educated liberals: A higher wage means bye bye to employment at your favorite cheap, burned bean coffee shop with the naked mermaid logo. It also means bye bye to your job at the golden arches. Ta-ta to slinging everyone's favorite fried taters.
It's simple really. Higher costs for employees have to go somewhere. Usually passed right onto the consumer (you). But food isn't priced arbitrarily. It takes into account all the costs required to make and serve that burger to you. If the burger is priced too high, no one will buy it. Profits suffer. Cuts will need to be made. Like cutting low skilled workers, replaced with Cylons. Or some robotic facsimile thereof.
The people who the minimum wage increase is "intended" to help harms them instead. A perfect allegory of liberalism at work.