What Happens to Service When You Raise the Minimum Wage?

What Happens to Service When You Raise the Minimum Wage?



There’s a lot of debate about whether raising the minimum wage decreases employment, and whether it is a net plus or minus for businesses. But a new study suggests that higher pay is a positive for at least one group: customers.

The study’s authors analyzed thousands of restaurant reviews after San Jose, Calif., raised its minimum wage from $8 to $10 in 2013 but the surrounding cities in Santa Clara County didn’t. They found the wage increase seemed to improve customers’ perceptions of wait staffs’ friendliness and courteousness, as measured by online reviews. For example, the number of negative comments about the wait staff at nonchain restaurants decreased 2.1% in the 12 months after San Jose increased the minimum wage, compared with both the previous 12 months and with restaurants in the surrounding cities of Santa Clara County.



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Rachel Meadows

Rachel Meadows

Trending topics news writer who enjoys cooking, walking her dog and travel.

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