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How Do Employers Belonging to Marginalized Communities Respond to Minimum Wage Increases? The Case of Immigrant-Owned Businesses in Seattle.
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- Author(s): Somashekhar, Mahesh; Buszkiewicz, James; Allard, Scott W.; Romich, Jennifer
- Source:
Economic Development Quarterly; May2022, Vol. 36 Issue 2, p108-123, 16p- Subject Terms:
- Source:
- Additional Information
- Subject Terms:
- Abstract: Minimum wage opponents often argue that businesses owned by marginalized communities, which include woman-owned, Black-owned, and immigrant-owned businesses, are exceptionally vulnerable to minimum wage increases. Little research has investigated this claim. Using a unique survey of Seattle businesses that includes owners’ nativity status and was administered while the city began to phase in its $15 minimum wage ordinance, the authors find that immigrant-owned businesses respond to the higher minimum wage in ways that largely conform to the responses of other businesses. Nevertheless, immigrant-owned franchises are less likely than other franchises to fire employees, reduce employees’ hours, or lower the wages of employees earning more than $15 per hour. Evidence suggests that immigrant franchisees have a lower likelihood of passing the increased labor costs onto employees because they use fewer employees and rely more heavily on family labor compared to other franchisees. The authors’ findings suggest that firms owned by marginalized and nonmarginalized groups respond to municipal-level minimum wage increases in comparable ways. Nevertheless, marginalized status may matter more in certain sectors of the economy than in others. [ABSTRACT FROM AUTHOR]
- Abstract: Copyright of Economic Development Quarterly is the property of Sage Publications Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)
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