Minimum-wage increases and employment in franchised fast-food restaurants

Card and Krueger's (1994) result that employment is unaffected by an increase in the minimum wage in the franchised fast-food restaurant industry appears to be inconsistent with conventional economic analysis. A discussion takes a closer look at the franchised fast-food industry and argues that...

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Bibliographic Details
Published in:Journal of labor research 1996, Vol.17 (1), p.211-214
Main Author: Wimmer, Bradley S
Format: Article
Language:English
Subjects:
Economics
Effects
Employment
Fast food industry
Franchisees
Labor force
Minimum wage
Restaurants
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Summary:Card and Krueger's (1994) result that employment is unaffected by an increase in the minimum wage in the franchised fast-food restaurant industry appears to be inconsistent with conventional economic analysis. A discussion takes a closer look at the franchised fast-food industry and argues that the presence of brand-name capital does not allow franchisees to substitute away from labor or decrease the level of services provides to customers - employment levels in franchised fast-food restaurants are closely tied to sales.
ISSN:0195-3613
1936-4768
DOI:10.1007/BF02685794