How Seattle’s $15 Minimum Wage Affected Restaurant Output

Minimum wages impact restaurant firms more than any other industry, yet no researcher has yet examined how the minimum wage affects restaurant industry output at the city-level. Seattle, Washington’s $15 minimum wage ordinance provides an opportunity to examine the effects of a large minimum wage increase. The author used data collected from the Washington State Department of Revenue and the Employment Security Department to conduct a difference-in-difference analysis. The estimates revealed a 1% increase in the Kaitz index led to a 0.92% decrease in restaurant industry output. Full-service firms suffered greater losses than limited-service firms. The results suggest restaurant leaders experience difficulty adjusting to large minimum wage increases.