Fast-food establishments in Illinois and Indiana were surveyed during a period of state-mandated minimum-wage increases in
Illinois. While entry-level wages of Illinois establishments rose substantially in response to the mandated increases, there
is little evidence that Illinois establishments ameliorated wage increases by delaying scheduled raises or reducing fringe
benefit offerings. There is little evidence of ‘labor-labor’ substitution in favor of women, better educated, or teenaged
workers, or increased worker tenure at the new wage, but weak evidence of increased food prices. In contrast, there are large
declines in part-time positions and workers’ hours in Illinois relative to Indiana. Aggregate figures from the Bureau of Labor
Statistics support relative declines in total fast-food employment in ‘downstate’ Illinois counties, as hypothesized. However,
establishments’ responses do not appear proportionate to the strength of the minimum wage change.
Keywords Minimum wage - Labor supply - Fast food