Wage hike set to squeeze fast-food restaurants
From the article: “On July 24 the federal minimum wage is set to rise 11% to $7.25 an hour, the last in a three-step increase. While employees may see a paycheck boost – some states’ minimum wage exceeds the federal mandated wage – companies like Burger King Holdings Inc. (BKC) and McDonald’s Corp. (MCD) will find it more difficult to absorb the hit or even pass it along to customers.”
Read the full article at the Wall Street Journal’s website.
Economist David Neumark has studied the effects of minimum wage increases extensively, and has found that minimum wage increases often result in fewer jobs for the most needy. According to Neumark, poor workers and workers with a low education level are often the first to be let go when labor becomes more expensive.