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A New Study Says Rising Minimum Wage Hasn’t Affected Restaurant Industry Jobs

It just gives people a living wage

PABU Lead Bartender Nick Jones
Bartender Nick Jones at PABU

The Bay Area has seen an explosion of fast-casual restaurants in recent years, as restaurant owners have trimmed staff and pointed to rising minimum wage as a key reason for developing new business models. But a new UC Berkeley study finds that the rise in minimum wage actually hasn’t led to significant job losses in the Bay Area restaurant industry — nor any significant growth.

As first reported by the SF Chronicle, the study examined minimum wages across a set period of time in San Francisco, Oakland, and San Jose, as well as Chicago, Seattle, and Washington D.C. In the Bay Area cities in 2016, minimum wage was $13, $12.55, and $10.30, respectively. Researchers began studying in 2009. Back then, minimum wage in San Francisco was just shy of $10 and $8 in Oakland and San Jose.

The study did not “detect negative employment effects” due to minimum wage increases. From city to city, jobs stayed remarkably steady — it estimated that a 10 percent increase in minimum wages led to a range a 0.3 percent decrease to a 1.1 percent increase, on average, in jobs. Researchers even examined counter-service restaurants and full-service restaurants separately and found “no detectable employment effects in either industry.”

So, what does it all mean? Why are so many restaurants cutting back on staff, revamping their business models, or calling it quits altogether? Well, there are hordes of reasons why running a restaurant is expensive — skyrocketing rents, insurance, rising costs of goods — and with the Bay Area’s housing crisis, retaining staff is harder than ever before because many low-wage employees can’t afford to live here anymore. But based on this study, providing folks with a living wage isn’t a factor.

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