The Effect of Maryland's 2022 Minimum Wage Increase on Employment in the Fast-Food Industry

Abstract Economic theory suggests that increasing minimum wage could lead to a decrease in employ- ment, especially for industries most sensitive to minimum wage laws. Using Pennsylvania as a control group, we study the labor implications of Maryland’s increase in minimum wage in 2022 using a difference-in-differences approach. Although OLS regressions infer that the minimum wage hike had no effect on employment in the fast-food industry, our more rigorous fixed effects regressions indicate that the minimum wage law had a negative and statistically significant impact on employment, implying that higher minimum wage caused an increase in unemployment among fast-food workers.

JEL classifications : J20, K31