Over the last two years many localities across the United States have increased minimum wage requirements. And, the past couple years has also seen an increase in stories of restaurant closures in the affected areas.

While this is no surprise to many economists, right-leaning publications, and right-leaning intellectuals, the left has sought to debunk the connections between restaurant closures and the increase in local minimum wages.  

However, a recent study by Harvard University shows concrete evidence that, at least in San Francisco where the study was conducted , the minimum wage increase is directly impacting restaurant closings overall.  

The study indicates that minimum wage has an overall impact on restaurant closures in general, but qualifies the study by stating “While lower rated restaurants are driven to exit by increases to the minimum wage, higher rated restaurants tend to be more insulated from such shocks.”

This statement caused left-leaning Los Angeles Times Columnist, Michael Hiltzik to allege, “Minimum wage increases can kill businesses—if they already stink.”  While the study does say that restaurants with lower review ratings have a tendency of exiting, it also refers to restaurants being “closer to the margin of exit”, or in other words, who have a higher overhead compared to sales intake.

Low ratings, in Hiltzik’s view, are to understood as a result of poor business practices resulting in poor service and product.  The statement from the study that he focuses on is “A $1 increase in the minimum wage leads to a 14% increase in the likelihood of exit for a 3.5-star restaurant…but has no discernible impact for a 5-star.”

Hiltzik’s assertion is incorrect as he fails to see some very important points. The first is that some restaurants, are a “3.5” rating by design, even when doing business in a solvent, professional manner. They are essentially closer to “the margin” that the report refers to.