Local minimum wage hikes cause restaurants to leave or shut down and deter new ones from entering, according to a new Harvard Business School study of the San Francisco Bay Area restaurant industry that contradicts the orthodox liberal view that steeply raising the cost of unskilled labor will not affect jobs or hiring.
More interesting, though, are the study’s findings about which restaurants are forced to leave by the higher wage floors. The authors compared rates of departure of restaurants across different Yelp ratings, and found that the policy hit low and mid-quality restaurants much harder than top-tier restaurants. “Our point estimates suggest that a $1 increase in the minimum wage leads to an approximate 14 percent increase in the likelihood of exit for the median 3.5-star restaurant but the impact falls to zero for five-star restaurants.” While a restaurant’s Yelp rating doesn’t correlate directly with its price range, this differential effect suggests that it’s easier for rich people to ignore the deleterious effects of minimum wage hikes. Virtually all of the most expensive restaurants in San Francisco have four or more stars; the city’s business and professional elite are unlikely to see many of their favorite high-end destinations pushed out of the city. Poor or middle-income workers are less likely to have the luxury of only frequenting top-rated establishments, not to mention that they are more likely to work at the restaurants that the hikes put out of business.
We study the impact of the minimum wage on firm exit in the restaurant industry, exploiting recent changes in the minimum wage at the city level. The evidence suggests that higher minimum wages increase overall exit rates for restaurants. However, lower quality restaurants, which are already closer to the margin of exit, are disproportionately impacted by increases to the minimum wage. Our point estimates suggest that a one dollar increase in the minimum wage leads to a 14 percent increase in the likelihood of exit for a 3.5-star restaurant (which is the median rating), but has no discernible impact for a 5-star restaurant (on a 1 to 5 star scale).
The majority of green jobs in solar are construction jobs, that is, installing systems. A 2016 report from UC Berkeley’s Labor Center by Betony Jones, Peter Philips and Carol Zabin analyzes differences between construction jobs in the utility-scale segment of the renewable energy industry and jobs in the rooftop solar industry. The study finds that in California most workers in the utility-scale segment earn wages and benefits, and receive training that can sustain a middle class lifestyle. The report attributes this to the fact that utility-scale projects in California employ workers who belong to labor unions or receive equivalent wages and benefits to union members.
Jobs in rooftop solar, on the other hand, pay lower wages and offer more limited benefits. The Solar Foundation jobs report shows that most solar installers (69%) work on these lower paid residential and commercial distributed solar projects, not on the higher wage utility-scale projects.
Economic conditions might be another factor. Even though the recovery has been stronger in California than in the rest of the country, Borenstein said business activities – and the resulting carbon emissions – are lower than regulators assumed when they started pulling together regulations a decade ago.
Since January 1, 2016, over 300 “convenience zone” (CZ) recycling centers—those generally located within a half mile of supermarkets—have closed. CZ recycling centers are an important part of California’s Beverage Container Recycling Program (BCRP). They provide a convenient location for consumers to recycle beverage containers and have their deposit—the California Redemption Value, or “CRV”—repaid.