Question

Real Value of the Federal Minimum Wage, 1938-2012 Nominal Minmum Wage by Lew Part III: Longer Answer Question (8 pt.) Answer ONLY in the space provided, anything outside of the space provided will not be graded. S1O In the U.S., most of the minimum-wage workers are in the restaurant industry. California Restaurant Association (CRA) has been consistently against minimum wage increases and argues that minimum wage increases rarely improve the $8 s6 $4 $2 hardworking non-tipped employees!. Please use the diagram on the right to support or reject this argument. (In the diagram, darker line: real wage, lighter line: nominal wage).

Answer 1

1. California Restaurant Association (CRA) feels that the minimum wage increase will have a negative effect on the restaurant industry as it tend to benefit already high paid servers(tipped) but will rarely affect the non-tipped workers. So changes are planned in such a way that, if the minimum wage level are tend to be raised, the restaurants are to cut off the tips to the highly paid servers to enhance balance of payments.

2. This increase in the minimum wage could also affect the ability of the operator of the restaurant to provide an increase in wage to other who work hourly.

3. California's minimum wage level increased to $11 per hour in 2018 from $10.50 per hour in 2017 of employer with greater than or equal to 26 employees and level increased to $10.50 per hour in 2018 from $10 per hour in 2017 of employer with less than or equal to 25 employees.