Posted on 07/15/2019 9:08:13 AM PDT by SeekAndFind
Progressives never learn. Even as Democrats running for president line up behind a national $15/hour minimum wage, on the West Coast, where cities like Seattle, Portland, and San Francisco all have implemented this demand, a restaurant chain with over 2,000 employees has filed for bankruptcy, citing the high minimum wages that have increased its costs.
Jeremy Hill reports for Bloomberg (hat tip: Legal Insurrection):
Progressive wage policies helped force upscale eatery operator Restaurants Unlimited Inc. into bankruptcy, according to court documents filed Sunday.
The company, which operates 35 restaurants ranging from fine dining to "polished casual" eateries, including Henry's Tavern, Stanford's, and Kincaid's, filed for Chapter 11 protection in Delaware on Sunday. Minimum wage hikes, two disappointing restaurant openings, and consumers shunning casual dining are to blame for the bankruptcy filing, chief restructuring officer David Bagley said in court papers.
The impact of minimum wage–driven higher labor costs was substantial.
Wage increases in Seattle, San Francisco and Portland boosted the company's wage expenses by a total of $10.6 million through its fiscal year end 2019, Bagley said. Revenue for the year ended May 31 was $176 million, down 1% from the prior year.
Keep in mind that many workers who receive higher than minimum wages have contracts that specify that they will receive minimum wage plus a certain number of dollars. So it not merely at the bottom that wages increase.
I am a partner in a restaurant that has adapted to the higher wage environment by using the service format that is gradually supplanting the waiter system of taking orders and delivering them to tables. It is a hybrid of the fast food model, of ordering and receiving food from a counter. Called "fine casual,"
(Excerpt) Read more at americanthinker.com ...
Heck, I don’t have a problem with that. Or a Buffet format.
Stanfords in Portland was one of my favorites!
Really high quality without the Elite prices.
And on the West Coast it’s “Serves them right- they didn’t want to pay their workers a living wage. Hope they all go out of business!!!” Economics is not a strong subject there.
I believe the high minimum wage has hurt a lot of food service businesses that were profitable but not by a lot.
In the town I live in the average price of lunch at a normal style restaurant went from around $7 to around $10+ due to the voters approving a minimum wage hike state wide. That might work in the cities where they make significantly more anyway but not so much in the smaller towns; especially where a lot of retirees are having to make do with less and less as costs go up every year. I think I read the inflation rate has doubled in the last 15 years in real buying power. I believe it and feel it.
People who could afford to go out to eat once a week are now able to do it just once or twice a month. That’s what an artificially high minimum wage hike means in real people terms. The irony since everything now costs more is it didn’t even help those who got the raise and of course those who got laid off due to the hike aren’t making anything after their low unemployment pay runs out in 6 months.
I am seeing an increase of the kiosk based order and payment systems. Olive Garden, BJ’s, and Chili’s here in Virginia have picked up on the trend.
Teaches them to love welfare.
I tried one at a local McDonalds, no thanks to using the devices after the kids and their dirty fingers have put their orders in.
How do you like them apples, strikers?
Wage increases in Seattle, San Francisco and Portland boosted the company's wage expenses by a total of $10.6 million through its fiscal year end 2019, Bagley said. Revenue for the year ended May 31 was $176 million, down 1% from the prior year.
$10.1 million sounds like a lot but as a percentage of revenue it is not. 10.1/175 = 5.7%. I am sure their food costs go up year over year by that much too. T
The minimum wage increase didn't cause a 30% increase in the menu price. LOL!
How much of the $175 Million revenue is PROFIT after taxes and expenses?
Yes it did. It's a ripple effect through the entire system. How else would you explain it happening at the same time? Inflation may contribute but that's usually a 5% increase at a time.
Do some research, labor in the restaurant industry is 20-25% of retail prices. A 30% increase in labor will only increase the retail price 10% at the most, not 30%.
I don't know. They didn't say and I don't care really. A 5% increase in costs do not drive them out of business.
Well, they would not go out of business if they were not losing money. The increased cost would have been the last straw.
Taxes, rentals, regulations they have to adhere to, PLUS the minimum wage were probably the factors.
BOTTOM LINE: COSTS ate up all the profits.
Now all those underpaid restaurant workers can spend more time with their family.
Evidently these mentally challenged Democrats do not understand a smaller percentage of something is better that a larger percentage of zero
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