In a new study, some of the nation’s leading academic researchers on the impacts of minimum wage increases took a close look at how restaurant prices and jobs were affected after San Jose raised its citywide minimum wage by 25% in January 2013.
After analyzing a huge database of menu prices from 884 different restaurants from before and after the increase took effect, their statistical model found that for every 10% increase in minimum wage, restaurant prices increased by a grand total of.... 0.58%. And their research found no negative effects on employment levels at all.
This model suggests that over the course of Seattle’s several-year phased-in increase from $9.47/hour to $15/hour, we should expect a total restaurant price increase of.... about 3%. With no negative impacts on employment.
In other words: the sky remains aloft.
UPDATE (1/6/2016): New York's Shake Shack recently announced that after a 20% increase in the minimum wage in the city, prices are increasing... 1% to 2%. Which is right in line with the estimate here of 0.58% restaurant price increase for every 10% minimum wage increase. HOW WILL THE ECONOMY SURVIVE WHEN FRIES ARE 5 CENTS MORE EXPENSIVE?