15$ an hour minimum wage.

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Joined May 22, 2019
With a drastic jump in minimum wage of 15$ an hour. Will that force small restaurants to close doors from raising prices on the menu?
 

kuan

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My guess is there will be a certain threshold where adding an extra employee or opening another day will push the restaurant to bankruptcy. Small restaurants, high quality, high check average, and maybe 2 people running FOH and 1 chef owner can do quite well.
 
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It depends upon the terms of the minimum wage law such as business size etc. However, from a food industry point of view, it will likely force smaller employers to cut full time hours and perhaps look to more part time help to take up the slack. It also will impact overtime availability etc.

Seattle. for instance, has not had the great results that were hoped for. At best, those results have been mixed. Some places are doing well while others have shut their doors permanently. Many employers relocated outside of the Seattle City limits to avoid the wage law. Those that stayed have cut hours and laid off higher wage staff to make room for the cheaper part time labor. On average, people who have avoided layoffs are actually earning less money per month, according to an analysis performed by Washington State University.

The cost of the increased overhead has generally resulted in an increase in the cost of goods and services.

Tips are also shrinking but, that too has mixed results. The net effect, however, is that the jobless rate within the city limits has increased, but not as much as the naysayers had predicted.

The first golden rule of any business is that the value of an employee's work product to that business cannot be less than the value of their compensation or else the business will fail.
 
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Joined Apr 15, 2019
I think really what we’re seeing is that the restaurant industry has been artificially inflated on low wages for a long time, now. Obviously this allows for more spending/circulation.

But it’s been a fine line of low wages, low profit, competitive pricing for decades. As we see a push toward “true cost” I do think that consumers will respond by using restaurants less often.

While it’s difficult to avoid feelings of being personally attacked by this, it’s really best to understand it as the cold indifference of the market.

Acceptance is often step one toward the innovations and adaptability that lead to success.
 
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