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Minimum Wage Channels of Adjustment

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  • Barry T. Hirsch
  • Bruce E. Kaufman
  • Tetyana Zelenska

Abstract

type="main" xml:id="irel12091-abs-0001"> We analyze the effects of minimum wage increases in 2007–2009 using a sample of restaurants from Georgia and Alabama. Store-level payroll records provide precise measures of compliance costs. We examine multiple adjustment channels. Exploiting variation in compliance costs across restaurants, we find employment and hours responses to be variable and in most cases statistically insignificant. Channels of adjustment to wage increases and to changes in nonlabor costs include prices, profits, wage compression, turnover, and performance standards.

Suggested Citation

  • Barry T. Hirsch & Bruce E. Kaufman & Tetyana Zelenska, 2015. "Minimum Wage Channels of Adjustment," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(2), pages 199-239, April.
    • Handle: RePEc:bla:indres:v:54:y:2015:i:2:p:199-239
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    File URL: http://hdl.handle.net/10.1111/irel.2015.54.issue-2
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    More about this item

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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