TY - JOUR
T1 - The impact of minimum-wage increases
T2 - Evidence from fast-food establishments in Illinois and Indiana
AU - Powers, Elizabeth T.
N1 - Funding Information:
Acknowledgments This project would not exist without Ron Baiman and Joe Persky, who first approached me about collecting original data on the Illinois minimum wage change. Their participation in the survey design, surveyor training, and data collection efforts is greatly appreciated. The Russell Sage Foundation provided generous financial support for this project. Students at the University of Illinois at Urbana-Champaign and the University of Illinois at Chicago conducted the surveys of fast-food outlets. Veronica Alaimo and Maghaisvarei Sellakumaran provided excellent graduate research assistance and Kathleen Dorrestein ably assisted with data entry. Alan Krueger and David Neumark provided help and advice at early stages of this work. Nick Powers provided helpful comments on numerous drafts. I am grateful to an anonymous referee for many helpful comments that greatly improved the paper. Responsibility for errors rests with the author alone.
PY - 2009/12
Y1 - 2009/12
N2 - 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.
AB - 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.
KW - Fast food
KW - Labor supply
KW - Minimum wage
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U2 - 10.1007/s12122-009-9068-3
DO - 10.1007/s12122-009-9068-3
M3 - Article
AN - SCOPUS:72249117969
SN - 0195-3613
VL - 30
SP - 365
EP - 394
JO - Journal of Labor Research
JF - Journal of Labor Research
IS - 4
ER -