Minimum Wage Channels of Adjustment

Abstract

The effects of minimum wage increases in [2007][2008][2009] are analyzed using a sample of restaurants from Georgia/Alabama. Store-level payroll records provide precise measures of compliance costs. Examined are multiple adjustment channels. Exploiting variation in compliance costs across restaurants, we find employment and hours responses to be variable and in most cases statistically insignificant. Channels of adjustment to wage increases and to changes in non-labor costs include prices, profits, wage compression, turnover, and performance standards.

Implications of the 2016 Oregon Minimum Wage Increase for Direct Market Farmers, Farmworkers, and Communities

“…Previous studies [35][36][37][38][39][40] have indicated that although aggregate employment may not decrease in response to MW increases, employers do respond to labor cost increases by adopting one or more offsetting actions through recognized channels of adjustment [3]. Businesses can make two types of strategic adjustments to stay competitive in the face of a shock such as wage increases: quality enhancement or cost minimization [44,45].…”

“…Quality enhancement strategies focus on increasing product quality in some way, leading to the ability to raise prices [45]. Cost-minimization adjustments reduce overall labor costs by changing wage policies, such as reducing normal wage increases; cutting "nonwage compensation" such as free or discounted meals, on-the-job training, or paid breaks; greater use of part-timers; limiting the availability of overtime hours; increased performance standards; cross-training employees for multitasking; and getting more work from each employee [3,37,45]. Additional cost minimizing adjustments focus on other aspects of the business, such as reducing waste, water, and electricity use [3].…”

“…Then, we review the DM sector in Oregon and examine how it fits within the Oregon agricultural landscape. Next, we review the business theory on "channels of adjustment", which addresses how firms respond to MW increases [3]. Then, we present findings from our 18 Oregon farmer interviews to understand which adjustments they anticipate using to adapt to the MW increase.…”

Minimaliojo darbo užmokesčio ir makroekonominių rodiklių sąsajos Europos Sąjungoje

“…MDU poveikis gali būti tiriamas tiek mikro, tiek makro lygmeniu. Prisitaikymą prie kintančio MDU aprašo koregavimo kanalų teorija (Hirsch, 2015). Koregavimo kanalai gali būti nustatomi pagal konkurencinio, institucinio-elgsenos, ar monopsoninio modelio prielaidas.…”

“…Atsižvelgiant į tai, lyginamiesiems MDU reguliavimo poveikio tyrimams yra tikslinga taikyti daugiamatės statistiko metodus. Dauginė atitikties analizė (Abdi, 2007;Husson, 2010) leidžia susieti kokybinius rodiklius nenurodant konkretaus priežastinio ryšio. Taigi straipsnyje nagrinėjama ši mokslinė problema: kokios yra MDU ir makroekonominių rodiklių sąsajos Europos Sąjungos (ES) valstybėse narėse ir kaip galima tobulinti MDU reguliavimą?…”