Berkeley study sparks debate over effects of minimum wage increases

Berkeley study sparks debate over effects of minimum wage increases
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Economists are debating the effects of minimum wage increases after the University of California, Berkeley, published a study Thursday showing pay increases for restaurant workers did not harm job growth in six major U.S. cities.

The report, compiled by researchers for Berkeley’s Center on Wage and Employment Dynamics, found no negative impact on hiring within the food services industry in cities that adopted minimum wages in excess of $10 an hour.

Researchers focused on restaurant employees since they could not access data on low-wage workers across all industries.

The results are said to cast doubt on arguments against minimum wage increases, particularly a 2017 study from the University of Washington that found Seattle’s minimum wage hike to $13 negatively affected employment in Washington as whole.

Jacob Vigdor, one of the 2017 study’s co-authors, said he disagrees with the Berkeley team’s analysis.

“Most of the lowest wage jobs in the economy are actually not in the restaurant industry at all,” he told The Hill. “There are just as many low wage jobs in the health-care sector as there are in the restaurant industry.”

Vigdor added that the 2017 study also found that while Seattle restaurant jobs were not negatively impacted by minimum wage increases, low-wage employment as a whole was harmed.

“You have to think about those lowest wage jobs as being taken by the workers with less experience, who are going to require on-the-job training,” Vigdor said. “And based on what we’re seeing in our data, those opportunities are drying up.”

The authors of the Berkeley study pushed back on Vigdor's assessment, saying the median wage for restaurant workers across the country is less than $10 an hour.

“When you’re talking about the restaurant industry ... a pretty good share of the workforce is gonna be somewhere around or just above minimum wage,” co-author Sylvia Allegretto told The Hill.

The Berkeley study's co-authors also pointed to criticisms of the 2017 report that said researchers did not effectively disentangle the effects of Seattle’s booming economy from that of the city’s minimum wage increase.

Allegretto added via email that the Berkeley team had a greater diversity of data than the University of Washington (UW).

“By comparing the six cities to other large metropolitan areas, we address a key challenge that the UW team cannot given that they are limited to other parts of Washington state only when they make their comparisons,” she wrote.