How can an increase in the minimum-wage affect the restaurant industry?

Question

Quizplus · Accepted Answer

An increase in the minimum-wage can lead to a couple of different outcomes. If restaurant workers receive a pay increase, some restaurants may be unable to afford the added labor costs and may have to reduce staffing levels, leading to a surplus of restaurant workers. Additionally, some restaurants may choose to pass on the added labor costs to consumers by increasing prices for restaurant meals, which can lead to a reduced demand for dining out. Therefore, both B and C are correct.

How Can an Increase in the Minimum-Wage Affect the Restaurant