Study: No Restaurant Job Losses From Bay Area $15 Minimum Wage

A UC Berkeley study published on Thursday found that no restaurant jobs had been lost in the 4 years since 3 Bay Area cities joined the ‘Fight for $15’ minimum wage.

The UC Berkeley Center on Wage and Employment Dynamics (CWED) was interested in the financial impacts on food workers from 7 states, 10 large cities, and dozens of smaller cities and counties representing about 20 percent of U.S. workers that enacted phased-in minimum wage hourly increases to $12 to $15 an hour.

With the 1960 federal minimum wage adjusted for 5 decades of inflation equal to about $10 per hour in 2018, a $12 to $15 an hour minimum wage is substantially higher. CWED found that as a result, the after-inflation “real wage” for a large portion of the low-paid U.S. labor market has already or will jump by 15 to 50 percent higher.

The first major study on the employment impacts of the ‘Fight for $15’ was a University of Washington analysis of Seattle published in June 2017 by the non-partisan National Bureau of Economic Research. NBER researchers found that in the first 2 years after the city adopted a phased-in schedule for a $15 minimum-wage, the average low-paid worker had lost income due to a reduction in jobs and a reduction in hours worked.

About 2.2 million workers, or 2.7 percent of all U.S. hourly workers in 2016, were earning wages at or below the $7.25 federal minimum wage. But hourly minimum wage in California’s Bay Area by 2016 was substantially higher with San Jose at $10.30 an hour, Oakland at $12.55 an hour, and San Francisco at $13 an hour.

CWED reviewed the 2014 to 2016 employment data for food services workers to understand the financial benefits and/or costs to low-paid workers from the big minimum wage increase for the Bay Area’s 3 largest cities.

The U.C. Berkeley researchers found that for low-paid food service workers in the Bay Area, a 10 percent bump in minimum wage raised pay for restaurant workers income between 1.3 and 2.5 percent.

Researchers stated that with the change in the number of restaurant jobs ranging from a decline of 0.3 percent to an increase of 1.1 percent, they did not “detect significant negative employment effects” to Bay Area restaurants as a knock-on effect from the big minimum wage increases.

CWED cited 17 recent studies of wages and employment that also found “little to no detectable negative effects” of minimum wage increases on restaurant employment, but acknowledged that “many restaurant studies, including ours, do not have data on hours of employed workers.”