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Abstract

This paper presents the first study of the economic effects of a citywide minimum wage---San Francisco's adoption of a minimum wage of $8.50 in early 2004. Using data from a balanced panel of restaurants and a variety of control groups, the authors find that the policy increased pay, compressed wages among restaurant workers, and did not create any detectable employment loss among affected restaurants. The authors also find smaller amounts of measurement error in these data than characterized earlier benchmark studies by David Card and Alan Krueger and by David Neumark and William Wascher. As a result, they can reject statistically negative employment estimates in previous studies. Other findings of the study are that fast-food and table-service restaurants responded differently to the minimum wage, with a small price increase and substantial increases in job tenure and the proportion of full-time workers at fast-food restaurants, but not at table-service restaurants.

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Bibliographic Info

Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 60 (2007)
Issue (Month): 4 (July)
Pages: 522-543

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Handle: RePEc:ilr:articl:v:60:y:2007:i:4:p:522-543

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Cited by:

1. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," Working Papers 060708, University of California-Irvine, Department of Economics, revised Jan 2007.
   
   • David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
2. Carrie H. Colla & William H. Dow & Arindrajit Dube, 2011. "The Labor Market Impact of Employer Health Benefit Mandates: Evidence from San Francisco’s Health Care Security Ordinance," NBER Working Papers 17198, National Bureau of Economic Research, Inc.
3. Alan Manning, 2010. "Imperfect Competition in the Labour Market," CEP Discussion Papers dp0981, Centre for Economic Performance, LSE.
   
   • Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, Elsevier.
4. Dube, Arindrajit & Lester, T. William & Reich, Michael, 2011. "Do Frictions Matter in the Labor Market? Accessions, Separations and Minimum Wage Effects," IZA Discussion Papers 5811, Institute for the Study of Labor (IZA).
5. Jeannette Wicks-Lim & Jeffrey Thompson, 2010. "Combining Minimum Wage and Earned Income Tax Credit Policies to Guarantee a Decent Living Standard to All U.S. Workers," Published Studies peri_mw_eitc_oct2010, Political Economy Research Institute, University of Massachusetts at Amherst.
6. John Schmitt, 2013. "Why Does the Minimum Wage Have No Discernible Effect on Employment?," CEPR Reports and Issue Briefs 2013-04, Center for Economic and Policy Research (CEPR).
7. Lester, William T., 2009. "The Impact of Living Wage Laws on Urban Economic Development Patterns and the Local Business Climate: Evidence from California Cities," Institute for Research on Labor and Employment, Working Paper Series qt9313w788, Institute of Industrial Relations, UC Berkeley.
8. Aretz, Bodo & Arntz, Melanie & Gregory , Terry, 2012. "The Minimum Wage Affects Them All: Evidence on Employment Spillovers in the Roofing Sector," IZA Discussion Papers 7047, Institute for the Study of Labor (IZA).
   
   • Aretz, Bodo & Arntz, Melanie & Gregory, Terry, 2012. "The minimum wage affects them all: Evidence on employment spillovers in the roofing sector," ZEW Discussion Papers 12-061, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
9. Allegretto, Sylvia & Dube, Arindrajit & Reich, Michael, 2009. "Spatial Heterogeneity and Minimum Wages: Employment Estimates for Teens Using Cross-State Commuting Zones," Institute for Research on Labor and Employment, Working Paper Series qt1x99m65f, Institute of Industrial Relations, UC Berkeley.
10. De Silva, Dakshina G. & McComb, Robert P. & Schiller, Anita R., 2011. "Do production subsidies have a wage incidence in wind power?," MPRA Paper 33861, University Library of Munich, Germany.
    
    • Dakshina G. De Silva & Robert P. McComb & Anita R. Schiller, 2013. "Do production subsidies have a wage incidence in wind power?," Applied Economics, Taylor and Francis Journals, vol. 45(28), pages 3963-3972, October.
11. Dube, Arindrajit & Lester, T. William & Reich, Michael, 2012. "Minimum Wage Shocks, Employment Flows and Labor Market Frictions," Institute for Research on Labor and Employment, Working Paper Series qt76p927ks, Institute of Industrial Relations, UC Berkeley.
12. Dube, Arindrajit & Lester, T. William & Reich, Michael, 2011. "Do Frictions Matter in the Labor Market? Accessions, Separations, and Minimum Wage Effects," Institute for Research on Labor and Employment, Working Paper Series qt4t3342nd, Institute of Industrial Relations, UC Berkeley.
13. Allegretto, Sylvia & Dube, Arindrajit & Reich, Michael, 2010. "Do Minimum Wages Really Reduce Teen Employment? Accounting for Heterogeneity and Selectivity in State Panel Data," Institute for Research on Labor and Employment, Working Paper Series qt7jq2q3j8, Institute of Industrial Relations, UC Berkeley.
14. Sen, Anindya & Rybczynski, Kathleen & Van De Waal, Corey, 2011. "Teen employment, poverty, and the minimum wage: Evidence from Canada," Labour Economics, Elsevier, vol. 18(1), pages 36-47, January.
15. Fahn, Matthias, 2011. "Three Essays on Commitment and Information Problems," Munich Dissertations in Economics 13750, University of Munich, Department of Economics.
16. Saul D. Hoffman & Chenglong Ke, 2011. "Employment Effects of the 2009 Minimum Wage Increase: Evidence from State Comparisons of At-Risk Workers (Revised Version)," Working Papers 11-16, University of Delaware, Department of Economics.
17. Hirsch, Barry T. & Kaufman, Bruce E. & Zelenska, Tetyana, 2011. "Minimum Wage Channels of Adjustment," IZA Discussion Papers 6132, Institute for the Study of Labor (IZA).
18. Yokota, Koji, 2012. "Time Discount and Convex Hiring Cost," ビジネス創造センターディスカッション・ペーパー (Discussion papers of the Center for Business Creation) 10252/4850, Otaru University of Commerce.
19. John Schmitt & David Rosnick, 2011. "The Wage and Employment Impact of Minimum-Wage Laws in Three Cities," CEPR Reports and Issue Briefs 2011-07, Center for Economic and Policy Research (CEPR).
20. De Silva, Dakshina G. & McComb, Robert P., 2011. "Geographic concentration and firm survival," MPRA Paper 32906, University Library of Munich, Germany.

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