Sept. 14, 2017
Study: Higher pay might equal lower restaurant hygiene

In the months leading up to wage increases in places like Oregon and elsewhere, we've heard incessant cries that higher wages would lead to higher menu prices and lower overall business. While the verdict on that is still out, at least one immediate effect of wage increases in recent years appears to be worsening restaurant hygiene.

That's the finding of a study recently conducted by a set of Ball State University researchers, who found that restaurant hygiene appears to be falling off as wages increase in one of the most progressive areas of the country for wage increases, Seattle, Washington.

"We find that a dollar increase in minimum wage resulted in a 6.4 percent increase in overall health violations."

According to a story on NPR this morning, Ball State University study co-author, Srikant Devaraj, joined with fellow researchers, Subir Chakrabarti and Pankaj Patel to look at the health inspection records in Seattle's King County following a series of minimum wage increases there in recent years to determine if there are any accompanying effects on health and hygiene, the report said. 

Enactment of the minimum wage increases in King County took place in stages, with different parts of the county raising the wages at different times. That produced a great research situation for study authors to track how restaurant hygiene violations changed as the minimum wage grew in each area, according to NPR. 

The result? Researchers found that each dollar increase in minimum wage was accompanied by a 6.4 percent increase in overall health violations at affected restaurants, including a 15.3 percent increase in the less severe violations in basic restaurant hygiene. 

Many have argued that increased wages for restaurant workers would end up driving down business overall since operators would have to make up the additional expense elsewhere by passing on the costs in menu item price increases. In this study, however, the researchers believe that instead of that, or in addition to other money-generating actions, Seattle-area restaurant operators might have cut some corners on hygiene tasks and supplies. 

Seattle was studied because the city has led the nation in the "Raise the Wage" movement over the past several years, beginning in 2010 when the minimum wage there was $8 an hour, compared to today when minimum wage in Seattle hovers between $13 and $15 an hour.

"We find that a dollar increase in minimum wage resulted in a 6.4 percent increase in overall health violations and 15.3 percent increase in less severe violations as a result of the increases," study author Srikant Devaraj told NPR. 

Study authors said that because cost increases can be so deadly to businesses, they speculate that operators have responded instead by doing a kind of nip-and-tuck act on overall services and worker duties in restaurant to not only keep worker hours in check, but also possibly limiting product usage for activities related to restaurant hygiene. 

Low-level violations increase most

The study found if corners are being cut, they appear to be happening most often in the least serious areas of restaurant hygiene like protecting food from insect and animal contamination, or supplying restrooms with towels and tissue. Those are considered less hazardous to overall health under Seattle's health inspection system. 

But this is a very early study on possible minimum wage hike effects so it's possible the trend may take another direction long-term or change in other ways. But the bottom line is that the analysis provides some of the first feedback on what happens when wages increase.

In this case, it looks like restaurant operators are doing everything they can to pay the higher wage rates, while still keep customers content about pricing. The real problem is that in Seattle's case, it may end up rather innocuously affecting overall restaurant cleanliness and perhaps even food safety. 

 

Photo: iStock


Topics: Business Strategy and Profitability, Equipment & Supplies, Financial Management, Food Safety, Insurance / Risk Management, Operations Management


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