The Employment Policies Institute (EPI), a think tank set up by Richard Berman in 1991, released the results of an online survey of restaurant operators in California.
The study results have a number of notable findings, including that the restaurant owners reported that, in response to the California’s April 1 minimum wage increase, 98% have increased their menu prices.
Employment Policies Institute
The EPI is a non-profit think tank dedicated to investigating “issues that affect entry-level employment.”
They have released several policy briefs arguing against increases in minimum wage, and were founded by industry lobbyist Berman.
Who is Richard Berman?
Berman, also a qualified lawyer, has a reputation as an expert in crafting negative media campaigns.
A USA Today feature nicknamed him “Dr Evil”, in partial reference to his appearance, and described him as “the best, and apparently most hated, example of a third party hired by companies to be their public face as they take on unpopular battles.”
Participant Selection
The 182 participants were all operators of at least one fast food restaurant. 75% managed up to 9 restaurant locations or “concepts”, and the rest more.
They were distributed the survey by email through an EPI list and unnamed “partner associations”, though it is not said how this list was composed.
Survey Questions
The survey asked questions of the participants through an online form, and looked at both current perceptions and future predictions about their business practices, regularly referring to the minimum wage increase explicitly.
Questions included: “Does the current $20 minimum wage law apply to your restaurant(s)?”; and “What impact has the $20 minimum wage had on your restaurant(s) to date?”
Raise Menu Prices
Restaurant owners almost universally reported that they had raised the prices of products on their menu.
The vast majority, 98%, selected the ‘Raised menu prices’ option on the form when faced with the question: “What impact has the $20 minimum wage had on your restaurant(s) to date?”
Worry About Fewer Customers
Restaurant owners may be worried that their increases in menu prices may lead to reduced footfall through their stores.
In response to the question “To your knowledge, how do you believe raising menu prices would affect customer foot traffic in your restaurant(s)?”, 92% believed it would either ‘somewhat decrease’ or ‘significantly decrease’ customer foot traffic.
More Customers?
The survey also showed optimism in a small minority of owners over prices and foot traffic, although they do not provide their reasoning.
3% of restaurant owners believed that, rather than decreasing foot traffic, raised menu prices will either ‘significantly increase’ (2%) or ‘somewhat increase’ foot traffic.
Margin of Error
The survey has a significant margin of error, although it is not said how this has been calculated.
Titled “CRISIS IN CALIFORNIA”, the research concedes in the write-up that it “has a margin of error of seven percent.”
Debate Rages On
The response from restaurant owners surveyed in the EPI survey suggests that managers and business heads are less than enthusiastic about the recent wage hike.
Meanwhile, Governor Gavin Newsom and his team have shared data showing an increase in thousands of jobs from April 1 to June. The debate is likely to continue for a while yet.
