More Negative Impacts of Minimum Wage | Eastern North Carolina Now

    Publisher's note: This post, by Brian Balfour, was originally published in the economics section of Civitas's online edition.

    Seattle has been increasing its minimum wage over these last couple of years, and the results have thus far been predictable (at least by those that understand economics). Low-skilled, low-wage workers have suffered, thru job losses and reduced hours (for example see this study).

    When the price of a good or service - in this case low-skilled labor - is increased by an external force like government, the demand for that good decreases.

    But thinking still further about the issue, when employers are confronted with an artificial cost increase of one of their inputs, they may also look to cut back on other costs as well; such as fringe benefits, working conditions, or even safety and cleanliness.

    This academic study on the impact of the minimum wage increase on Seattle's restaurants confirms this last notion:

• We assess the effects of rise in minimum wages on hygiene violation scores in food service establishments. Using a difference-in-difference analysis on hygiene rating of food establishments in Seattle [where minimum wage increased annually between 2010 and 2013] as the treated group and from New York City [minimum wage was constant] as the control group, we find an increase in real minimum wage by $0.10 increased total hygiene violation scores by 11.45 percent.