Even in small businesses, minimum wage hikes don’t cause job losses, study finds

Many small businesses fear that higher minimum wages will force them to lose profits or cut jobs. But new research co-authored at UC Berkeley finds that costs can be passed to customers with little impact on business — and considerable benefit for workers. (Image via Wikimedia Commons)

Restaurants, retail stores and other small businesses, long thought to be vulnerable to increases in the minimum wage, generally do not cut jobs and may actually benefit when governments raise minimum pay, according to a new study co-authored at UC Berkeley.

The prevailing wisdom among many business owners and policymakers is that when the minimum wage rises, smaller low-wage employers suffer more from higher labor costs and are more likely to cut jobs. But the groundbreaking new study, co-authored by Berkeley economist Michael Reich, found that small businesses can pass the costs on to consumers with little…

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