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No manna from minimum wage

On Thursday the Harvard Business Review published an article under the headline, “Research: When a Higher Minimum Wage Leads to Lower Compensation.”

It's new research from data in California and Texas:

“For every $1 increase in the minimum wage, we found that the total number of workers scheduled to work each week increased by 27.7%, while the average number of hours each worker worked per week decreased [sic] by 20.8%,” the researchers wrote. “For an average store in California, these changes translated into four extra workers per week and five fewer hours per worker per week — which meant that the total wage compensation of an average minimum wage worker in a California store actually fell by 13.6%.”

Since the businesses are forced to pay more for each hour of labor, they make up for it by cutting benefits:

“We found that for every $1 increase in minimum wage, the percentage of workers working more than 20 hours per week (making them eligible for retirement benefits) decreased by 23.0%,” the researchers said.

I've seen this a lot in Ontario as well where many stores would rather hire 2-3 part-time workers instead of one full-time employee. This often means that such workers now have to juggle multiple jobs to make ends meet.

This meme seems appropriate:

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