The impact of minimum-wage increases: Evidence from fast-food establishments in Illinois and Indiana

Research output: Contribution to journalArticle

Abstract

Fast-food establishments in Illinois and Indiana were surveyed during a period of state-mandated minimum-wage increases in Illinois. While entry-level wages of Illinois establishments rose substantially in response to the mandated increases, there is little evidence that Illinois establishments ameliorated wage increases by delaying scheduled raises or reducing fringe benefit offerings. There is little evidence of 'labor-labor' substitution in favor of women, better educated, or teenaged workers, or increased worker tenure at the new wage, but weak evidence of increased food prices. In contrast, there are large declines in part-time positions and workers' hours in Illinois relative to Indiana. Aggregate figures from the Bureau of Labor Statistics support relative declines in total fast-food employment in 'downstate' Illinois counties, as hypothesized. However, establishments' responses do not appear proportionate to the strength of the minimum wage change.

Original languageEnglish (US)
Pages (from-to)365-394
Number of pages30
JournalJournal of Labor Research
Volume30
Issue number4
DOIs
StatePublished - Dec 1 2009

Keywords

  • Fast food
  • Labor supply
  • Minimum wage

ASJC Scopus subject areas

  • Strategy and Management
  • Organizational Behavior and Human Resource Management
  • Management of Technology and Innovation

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