Building an Economy that Works for Everyone

PolitiFact rates National Restaurant Association statements on minimum wage: “False”

It’s clear the National Restaurant Association is opposed to the minimum wage in principle. But would they go so far as to mislead the U.S. Senate about the effect of minimum wage policies? You decide:

Melvin “Mel” Sickler, a representative of the National Restaurant Association, recently told a U.S. Senate committee to put the brakes on a bill that would increase the federal minimum wage and tie it to inflation.

Why? Boosting the hourly minimum wage from $7.25 to $10.10 would reduce the number of jobs in the food service industry, Sickler said.

The claim: In his testimony, Sickler trotted Oregon out as an example of a state with a high minimum wage (it’s $8.95) tied to inflation, saying that’s happened here.

The problem for Sickler and the Restaurant Association, as PolitiFact Oregon points out, is this:

The “employees per establishment” number quoted by the restaurant association seems to have changed over time, but not because of a massive drop in employment or restaurants.

If you control for population growth, you get a clearer indication of the impact of recessions and the business cycle on the industry.

From 2001 to 2011, Oregon consistently had more establishments per 1,000 people than the U.S. average, and it had more people working in the food service industry per 1,000 people than the national average. During the entire time, Oregon’s minimum wage was higher than the national average and steadily crept up, matching inflation.

politifact_photos_False_meter

Image: PolitiFact

The ruling: Sickler wants to connect the shrinking size of restaurants on average in Oregon to the state’s minimum wage being higher than the federal minimum. In a vacuum, his data seem to suggest that link.

But when we looked at data from other states, the correlation just didn’t work. And putting employment and the number of restaurants into context…we can see that restaurant jobs rise and fall with the health of the national economy, not the state’s minimum wage. Oregon’s per capita restaurant employment is higher than the national average, in spite of having a higher minimum wage.

We rate the statement False.

Now, the Restaurant Association could take this particular Whopper™ off the menu – but given its long shelf life, my bet is they’ll simply reheat and serve it again later.

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