Pay bumps mean better service: Study

Boosting restaurant workers’ wages is good for their wallets, but a new study suggests it’s good for their customers, too. It analyzed thousands of restaurant reviews after San Jose, California, bumped wages from $8 to $10 an hour in 2013, while pay in the rest of Santa Clara County stayed the same. The study, which incorporated artificial intelligence to evaluate customers' positive or negative feedback, found that their perceptions of wait staff friendliness edged up compared to the previous year and compared to other restaurants in surrounding cities.

Excerpt from the Wall Street Journal. By Lisa Ward.

There’s a lot of debate about whether raising the minimum wage decreases employment, and whether it is a net plus or minus for businesses. But a new study suggests that higher pay is a positive for at least one group: customers.

The study’s authors analyzed thousands of restaurant reviews after San Jose, Calif., raised its minimum wage from $8 to $10 in 2013 but the surrounding cities in Santa Clara County didn’t. They found the wage increase seemed to improve customers’ perceptions of wait staffs’ friendliness and courteousness, as measured by online reviews. For example, the number of negative comments about the wait staff at nonchain restaurants decreased 2.1% in the 12 months after San Jose increased the minimum wage, compared with both the previous 12 months and with restaurants in the surrounding cities of Santa Clara County.