Rising Minimum Wages Lead to Increased Restaurant Closures

Rising Minimum Wages Lead to Increased Restaurant Closures

A study released in April 2017 by Harvard Business School noted rising minimum wages have resulted in more closures in the restaurant business. These are restaurants that close indefinitely, acquisitions and sales are not factored.

This statistic is particularly concerning for hospitality groups, as it implies a diminishing market. Most studies on minimum wage focus heavily on the impact to employment or prices. This is one of the first that analyzes complete closure of business.

The study found that every dollar increase in minimum wage results in a 4 to 10 percent increase in restaurant closures. Now more than ever, it is important to combat rising labor costs by micromanaging food, liquor, and operating costs. Contact us to find out how Flores can help you control your bottom line.

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