Harvard Study Finds Minimum Wage Increase Causes Restaurant Decrease

At our sister site, Faces of $15, we’ve been documenting the “death march” of Bay Area restaurant closures due to dramatic minimum wage increases. Now a new Harvard Business School study provides additional analytical support to our observational findings.

The study concludes that every one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of median-rated restaurants going out of business. As Bay Area cities continue their march toward $15 over the next couple of years, the death march in the restaurant industry will only intensify.

We profiled one of these business closures last year–The Abbot’s Cellar in San Francisco.

“The conclusion,” writes Austin Yack over at National Review, is that, “over the next two years, San Francisco’s restaurant industry – the industry with the highest percentage of minimum wage workers – will likely shrink, as nearly 6,000 restaurant employers contemplate whether paying $15 per hour salaries is feasible.” Stay tuned to Faces of $15 for ongoing updates.