A Higher Minimum Wage Can Lead Employers to Lower Compensation

A study published this month in the Harvard Business Review finds that “as minimum wage increases, firms may strategically adjust their scheduling practices to reduce the number of workers eligible for benefits.” That’s a way for them to suppress compensation costs.

The study is based on an unidentified national fashion retailer and compares its stores in California, where the state minimum wage steadily rose from 2015 to 2018, with those in Texas, where the state minimum equaled the federal minimum of $7.25 an hour over the period. It finds that raising the minimum wage didn’t reduce the total number of hours ...