Harvard study: Minimum wage hikes drive some restaurants out of business

Minimum wage increases could push some restaurants out of business.
A new paper out from Harvard Business School examined the impact of minimum wage increases in the San Francisco restaurant industry. Using Yelp data, the researchers found that among Bay Area restaurants, a $1 increase in the minimum wage led to a 14 percent increase in 3.5-star restaurants shuttering. The wage increase had no impact on 5-star restaurants.

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​Harvard Business School professor Michael Luca and researcher Dara Lee Luca, of Mathematica Policy Research, observed that an $1 increase in the minimum wage increased the overall the likelihood of a restaurant closing by 4 percent to 10 percent.