You can’t have your cheap burger and a higher minimum wage too.

Comment “Wages” and we’ll send you an article about this topic. Fast-food chains are particularly sensitive to minimum-wage increases. When the minimum wage rises, restaurants have to adjust to higher labor costs. They can do so along different margins: hire fewer workers, reduce employee benefits, cut hours, or charge customers more. Because fast-food restaurants operate in a highly competitive industry with relatively thin margins, higher costs are often passed on to consumers. Burger eaters are among the many people who bear the cost. But the effects go beyond price increases. As restaurants respond to more expensive labor, they have stronger incentives to automate their processes, invest in labor-saving technologies, reorganize production, or even reduce the pace at which they expand and hire. Some workers may benefit from higher wages, but those gains come with costs borne by consumers and by the workers who are never hired, whose hours are cut, or whose jobs are eventually automated away. These effects are much harder to see. In the long run, effectively “taxing” low-wage employment this way can make entry-level work scarcer while raising the cost of the goods those workers themselves consume.