ALJAZEERA: Congress could more than double the federal minimum wage without doing serious harm to the fast-food industry, according to a report from economists at the University of Massachusetts at Amherst. In a hypothetical scenario in which the minimum wage gradually rose from $7.25 per hour to $15, the authors of the report found that fast-food companies would be able to “fully absorb” the increase without limiting its profit margin.
The industry could absorb increased labor costs, the report contends, by reducing turnover and slightly increasing prices. Reducing turnover would theoretically increase the productivity of the employees, therefore reducing the increase in labor costs.
“In terms of policy implications, our results offer a straightforward conclusion,” the report says. “Achieving a $15 federal minimum wage within the U.S., phased in over four years, should be seen as a realistic prospect.”… (more)
