According to a new report by Cornell University’s School of Hotel Administration, increases in regular and tipped minimum wage have not had a negative effect on restaurant industry profits – or on the number of employees restaurants hire.
For the study, the researchers looked at wage increases in states between 1995 and 2014 to asses the impact on restaurants, finding that hikes have had “no reliable linear effect on the number of full-service restaurants or on full-service restaurant employment, even when looking at cumulative effects over three years.”
Additionally, other research by academics, policy thinktanks, and financial institutions has found that wage increases would not, in fact, cost jobs, and in some cases even lead to job creation. One study from the Center for Economic and Policy Research even found that the 13 states that increased their minimum wages in 2013 have had stronger employment growth than the 37 states that didn’t.
The authors also suggest a correlation between wage increases and decreased turnover and greater employee productivity, concluding “that the restaurant industry should support rather than oppose reasonable increases in the minimum wage.”