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Wages, minimum wages, and price pass-through: the case of McDonald's restaurants
Ashenfelter, O. ; Jurajda, Štěpán
We use highly consistent national-coverage price and wage data to provide evidence on wage increases, labor-saving technology introduction, and price pass-through by a large low-wage employer facing minimum wage hikes. Based on 2016-2020 hourly wage rates of McDonald’s Basic Crew and prices of the Big Mac sandwich collected simultaneously from almost all US McDonald’s restaurants, we find that in about 25% of instances of minimum wage increases, restaurants display a tendency to keep constant their wage ‘premium’ above the increasing minimum wage. Higher minimum wages are not associated with faster adoption of touch-screen ordering, and there is near-full price pass-through of minimum wages, with little heterogeneity related to how binding minimum wage increases are for restaurants. Minimum wage hikes lead to increases in real wages (expressed in Big Macs an hour of Basic Crew work can buy) that are one fifth lower than the corresponding increases in nominal wages.
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Wages, minimum wages, and price pass-through: the case of McDonald's restaurants
Ashenfelter, O. ; Jurajda, Štěpán
We use highly consistent national-coverage price and wage data to provide evidence on wage increases, labor-saving technology introduction, and price pass-through by a large low-wage employer facing minimum wage hikes. Based on 2016-2020 hourly wage rates of McDonald’s Basic Crew and prices of the Big Mac sandwich collected simultaneously from almost all US McDonald’s restaurants, we find that in about 25% of instances of minimum wage increases, restaurants display a tendency to keep constant their wage ‘premium’ above the increasing minimum wage. Higher minimum wages are not associated with faster adoption of touch-screen ordering, and there is near-full price pass-through of minimum wages, with little heterogeneity related to how binding minimum wage increases are for restaurants. Minimum wage hikes lead to increases in real wages (expressed in Big Macs an hour of Basic Crew work can buy) that are one fifth lower than the corresponding increases in nominal wages.
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Worker heterogeneity and the asymmetric effects of minimum wages
Luna Alpizar, Jose Luis
This paper explores the notion that minimum wages affect different lowskilled workers aszmmetrically due to productivity differences. In a search model with worker heterogeneity, a rising minimum wage lowers the employment and labor force participation of the least productive workers by pricing them out of the market, while having the opposite effect on other low-skilled workers that remain hirable. CPS data supports these predictions, a rise in the minimum reduces the employment and labor force participation of teenagers with less than high school education, but has the opposite effect on prime-age workers with high school attainment. The calibrated model requires small firm surpluses to match these observations. If firm surplus is small due to high nonmarket activity values, a moderate rise in the minimum improves aggregate welfare even when the worker's bergaining weight is high.
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Effect of minimum wages: do regional data tell a different story?
Májková, Tereza ; Baxa, Jaromír (advisor) ; Pertold-Gebicka, Barbara (referee)
This thesis examines the effects of an increase of minimum wage level on unemployment, employment, disposable income and risk of poverty. We contribute to the existing literature by directly comparing results resulting from two similar datasets, one working with national, one with regional data. We use different sets of explanatory variables to see whether they affect the results of the estimation. On national level, our results confirm positive effect of minimum wages on employment of adults and on disposable income - but these findings were not confirmed on regional level. With respect to the regional perspective, the results are however subject to substantial uncertainty and are prone to substantial sensitivity to empirical specification. We attribute this uncertainty mainly to the quality of the data - small number of observations together with large heterogeneity. JEL Classification E02, E24, J08, J30 Keywords minimum wages, employment effect, disposable income, risk of poverty, panel data, NUTS 2 regions, comparison Author's e-mail majkovat@gmail.com Supervisor's e-mail jaromir.baxa@fsv.cuni.cz
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Remuneration for work in labour-law relations
Mášová, Hedvika ; Soušková, Milena (advisor) ; Spirit, Michal (referee)
This bachelor dissertation examines the issue of remuneration. It deals with wages, salary and remunerations of agreements in terms of shared properties as well as individual properties. The goal of this work is the explanation of basic legal concepts as determined by the labour code and related regulations which is followed by the identification of legal consciousness of regular employees. This work is structured into three parts. The first part clarifies the concept of wages, salary and remunerations of agreements in terms of comparison of their individual characteristics together. The second part deals with issues of wages, salary and remunerations of agreements separately. Third part discusses the notions of standard practise and the view of these matters from the perspective of employees who receive wages or salary, and thus marks out legal knowledge of ordinary employees and their awareness of remuneration.
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