Higher minimum wage means restaurants raise prices and fewer employee hours, survey finds

For restaurants, minimum wage hikes usually mean higher menu prices and fewer employee hours, according to a survey released Wednesday.

Fight For $15
Fast-food workers and supporters organized by the Service Employees International Union (SEIU) protest in front of a McDonald’s billboard in Los Angeles, in 2013.

The restaurant industry employs a large portion of minimum wage workers. It’s no surprise that 83% of survey respondents affected by minimum wage hikes reported that their labor costs rose at least 3%.

Twenty-three percent responded to minimum wage hikes by not making any changes to their business.

But the majority did. The most popular response — from 71% of operators — was to raise menu prices. Nearly half reworked their food and beverage options to reduce costs.

Some operators responded to the minimum wage increases by cutting costs, with 64% saying they reduced employee hours, and 43 percent saying they eliminated jobs.

Outside the restaurant industry, companies like Bank of America and Target have been hiking internal minimum wages to attract and retain employees in a tight labor market. Similarly, 87% of survey respondents affected by minimum wage hikes said that they increased wages for workers who made more than the minimum wage.

Continued: Higher minimum wage means restaurants raise prices and fewer employee hours, survey finds

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