The Minimum Wage in the Restaurant Industry

The Minimum Wage in the Restaurant Industry

The Minimum Wage in the Restaurant Industry

The Minimum Wage in the Restaurant Industry

Synopsis

Introduction--A Framework for Analysis History of the Minimum Wage in the Restaurant Industry The Market for Food Away From Home and the Industrial Organization of Eating and Drinking Places The Restaurant Labor Force Restaurant Compensation Responses to the Minimum Wage Summary and Conclusions

Excerpt

While the minimum wage is almost certainly the most thoroughly researched issue in labor economics, controversy about its effects on the economy continues unabated. Recently the quality of the debate has been enhanced by research that explores the impacts of the minimum wage in new areas superseding the discussions of the more distant past that have focused on the mandated minimum's effects on employment and unemployment. These new areas include the effects of the minimum wage on schooling and other forms of human capital accumulation, employee turnover, fringe benefits, wage distribution, and several others. The reports of the Minimum Wage Study Commission have been particularly important in adding new dimensions to the discussion. It is in this spirit that I have written this book.

In the book I explore the impacts of the minimum wage on the largest industrial employer in the economy, the restaurant industry. I trace the history of the minimum wage in that industry and examine the industry's structure, paying particular attention to the labor market. As in most traditional analyses of the minimum wage I examine the effects of the minimum on restaurant employment. However I also extend the traditional models and examine the effects of the minimum wage on restaurant workers' fringe benefits, wages, and wage distribution and on restaurants' sales, prices, and profits. I also compute how frequently restaurants fail to comply with the minimum wage statute.

I hope that this book will help illuminate several areas of recent policy debates on the minimum wage. For example, recently public policymakers have been debating issues involving a differential minimum wage for teenagers. Since restaurants employ large numbers of teenage workers, this book may help policymakers understand the issues involved in a differential minimum. Furthermore, the importance of the tip credit in restaurants in effect creates a differential minimum wage for a significant number of restaurant workers. Thus, analysis of the restaurant industry should offer insights into the behavior of a differential minimum elsewhere in the economy. At the very least, since the minimum wage's treatment of tip income is so important in the industry, we can anticipate continued debates over the Fair Labor Standard Act's treatment of tips. Also, future minimum wage debates are certain to occur over efforts to raise the minimum wage since inflation will inexorably erode its real value. Finally, my explorations of the minimum wage's effects on aspects of the labor . . .

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.