Thursday, July 13, 2017

Minimum Wage and Restaurant Hygiene Violations

From Tyler Cowen.
"This is evidence from Seattle, from a new paper by Subir K. Chakrabarti, Srikant Devaraj, and Pankaj C. Patel.  Here is the abstract:
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. Consistent with our theoretical model, an increase in minimum wage in Seattle has no influence in more severe (red) violations, and a significant increase in less severe (blue) violations. Our findings are consistent while using an alternate control group – Bellevue City, King County, located near Seattle.
Of course this makes perfect sense.  Even when minimum wages do not much decrease employment, they are not a free lunch, so to speak.  “There ain’t no such thing as a healthy free lunch” [TANSTAAHFL, the pronunciation differs only slightly] could be the new catchphrase."

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