Minimum Wage and Fast Food Employment

by Siddhartha Rao

Faculty mentor: Dr. Steve Greenlaw

The topic of living wage is highly contested in today’s political environment with many liberals looking to implement some kind of minimum wage increase, while conservatives argue to keep it where it is. The most common economic theory for the minimum wage debate comes from micro analysis of single firms and shows a decrease in employment from an increase in minimum wage although studies have found no conclusive answer. A newer macro perspective shows the possibility of no change in employment due to a minimum wage increase. With this macro theory in mind, the aim of this study is to look deeper into this question through regression analysis looking specifically at fast food jobs, considered some of the lowest paying jobs in the country. The results of this study support that an increase in population leads to an increase in fast food jobs and an increase in GDP leads to a decrease in fast food jobs. The minimum wage variable had a very low t-value meaning that it was not different from zero. This supports the macro perspective in showing no change in employment from an increase in minimum wage.

Minimum Wage and Fast Food Employment

7 Replies to “Minimum Wage and Fast Food Employment”

  1. It would be interesting to see how the current pandemic impacts fast food employment

    1. That would be very interesting. I think it would decrease both the demand and supply of labor for fast food but I am not sure how it would come out in the end. I think that would be worth doing another project on simply comparing data during the pandemic and data from the quarters before.

  2. Interesting project that was nicely presented. You noted the limitations of looking at a relatively small n=50. Did you look into finding data from counties either across the country or in a state?

    1. I never thought about looking for county-level data but that would be something to look into. I do think that minimum wage is set at the state level so that would not change county to county but the other variables would be much more defined and easier to see their relation to the fast-food employment in that area. I do think it would be difficult to find fast food employment data on the county level which might make the collection difficult.

  3. This was an interesting topic and I thought you presented it well.
    Best wishes
    Tara Corrigall ’82

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