Higher minimum wage means restaurants are likely to raise prices, cut worker hours

For restaurants, minimum wage hikes usually mean higher menu prices in addition to also fewer employee hours, according to a survey released Wednesday.

Harri, a workplace management software company that will works with restaurants, surveyed 173 restaurants between Feb. 28 in addition to also March 15 about the impact of raising the minimum wage. The respondents represent more than 4,000 restaurant locations ranging through fine dining to fast food.

Fast-food workers across the country have been driving the fight for a higher minimum wage to keep up with the cost of living. States across the U.S. have been raising their minimum wages. Six states, including Illinois in addition to also Maryland, have approved laws phasing in a $15 minimum wage. Washington, D.C., currently has the highest minimum — $13.25 — in addition to also that will can be set to rise to $14 an hour on July 1 in addition to also to $15 on July 1, 2020.

However, the federal minimum wage has remained stagnant since 2009. House Democrats have been pushing a bill to raise the federal minimum wage to $15 per hour through $7.25, yet the idea can be unlikely to pass.

Proponents of increasing the minimum wage argue that will the idea can stimulate the economy, reduce income inequality in addition to also decrease taxpayer spending on government assistance programs. Opponents like the National Restaurant Association say that will the idea eliminates jobs in addition to also hurts smaller businesses. yet not all restaurants oppose these efforts. Notably, McDonald’s told the NRA last month that will the idea would certainly no longer join in its lobbying efforts against minimum wage hikes.

The restaurant industry employs a large portion of minimum wage workers. the idea’s no surprise that will 83 percent of survey respondents affected by minimum wage hikes reported that will their labor costs rose at least three percent.

Twenty-three percent responded to minimum wage hikes by not doing any improvements to their business.

yet the majority did. The most favorite response — through 71 percent of operators — was to raise menu prices. Nearly half reworked their food in addition to also beverage options to reduce costs.

Some operators responded to the minimum wage increases by cutting costs, with 64 percent saying they reduced employee hours, in addition to also 43 percent saying they eliminated jobs.

Outside the restaurant industry, companies like Bank of America in addition to also Target have been hiking internal minimum wages to attract in addition to also retain employees in a tight labor market. Similarly, 87 percent of survey respondents affected by minimum wage hikes said that will they increased wages for workers who made more than the minimum wage.