The Effect of State Minimum Wage Increases on Restaurant Employment in Washington, Oregon, and Idaho from 2014 to 2024

Abstract

: State minimum wage increases remain contested because credible studies report different employment effects, especially in low-wage sectors such as restaurants. This paper examines restaurant employment in Washington, Oregon, and Idaho from 2014 to 2024, a period of large cumulative minimum wage increases in Washington and Oregon and a flat wage floor in Idaho. Using a state quarter panel for NAICS 722, the analysis estimates a two-way fixed effects difference in differences model and an event study to assess dynamics and pre-trends. The baseline estimate implies an employment elasticity of about -0.47, so a 10 percent increase in the minimum wage is associated with roughly a 4 to 5 percent decline in restaurant employment. Event study estimates show little evidence of differential pre-trends and suggest that effects emerge gradually over subsequent quarters. Robustness checks excluding the main pandemic window yield similar magnitudes. Overall, minimum wage increases in this regional setting are associated with moderate reductions in restaurant employment, with adjustment occurring over time rather than through immediate large job losses.