Posted on 03/14/2015 6:54:42 AM PDT by afraidfortherepublic
Seattle is about to embark on a civic experiment that most experts predict will be an economic disaster; a $15 an hour minimum wage is set to go into effect on April 1st. And some restuarants in the city have already shuttered their doors and are either going out of business or moving to friendlier climes.
This was entirely predictable - and was predicted when the measure passed the Seattle city council. Restuarants are particularly sensitive to this sort of increase in wages since most of their employees are paid at the minimum, and such a large percentage of their operating costs go to labor.
“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”
“He estimates that a common budget breakdown among sustaining Seattle restaurants so far has been the following: 36 percent of funds are devoted to labor, 30 percent to food costs and 30 percent go to everything else (all other operational costs). The remaining 4 percent has been the profit margin, and as a result, in a $700,000 restaurant, he estimates that the average restauranteur in Seattle has been making $28,000 a year.
“With the minimum wage spike, however, he says that if restaurant owners made no changes, the labor cost in quick service restaurants would rise to 42 percent and in full service restaurants to 47 percent.”
Restaurant owners, expecting to operate on thinner margins, have tried to adapt in several ways including “higher menu prices, cheaper, lower-quality ingredients, reduced opening times, and cutting work hours and firing workers,” according to The Seattle Times and Seattle Eater magazine. As the Washington Policy Center points out, when these strategies are not enough, businesses close, “workers lose their jobs and the neighborhood loses a prized amenity.”
(Excerpt) Read more at americanthinker.com ...
Cost is per entree/dollar. So six percent stands so the per item cost increases is 6 cents on a dollar.
I like that. I never thought of telling libs that. $0 dollars per hour is the real minimum wage... well, after unemployment and various welfare perks and kickbacks run out.
A major contributing factor for my coffee shop closing was a 50 cent increase in minimum wage a few years ago. I don’t know how restaurant owners manage. Especially new start ups.
Unions are irrelevant. Only 7% of the workforce is unionized, and the amount is FALLING.
I remember once Nixon instituted a wage and price freeze
= = = = = = = = = =
True, but given time, ‘we’ worked our way around it.
New cuts of meat were suddenly ‘discovered’, a new, improved soft drink could/would cost more.
To get around the wage freeze, ‘fire’ someone and hire them back tomorrow at the ‘newer’ rate etc etc etc
We used to have gumption and work through these little crises.
Granted, the ‘smarter’ we got, the more red tape ‘they’ interjected.
There....fixed it.
I think the profit margin for sit-down chain restaurants is in the neighborhood of 12%+. I’ve heard that number in the past, and it made sense given that their were stockholders to pay. So, my sense is that they’re wrong on the 4% profit margin, but even if the restauranteur was pulling down 70 grand, that’s not a lot of money. It’s even less if taken down to 40 or 50 grand.
That won’t happen.
They reduce operating hours to their most productive hours, trim staff, trim menu, and go for less expensive ingredients. If someone’s bills are set based on a 70 grand income, they can’t shift down to 50,000 in a short period of time...if they ever can.
I could see them putting a “Minimum Wage Hike Surcharge” on the checks. Wanna bet the diners are not at all sympathetic, that tips would dive?
You could be correct in your iPad/serve yourself theory.
I just do not think it will fly. We do not dine out to eat, we dine out to relax in a different atmosphere. Good food, a nice setting, and the waitress that “waits” on us is all apart of the mix. If the service is good, I do not object to paying a good tip.
If that iPad/serve yourself thing ever materializes, it will be McDonalds or just plain cooking a good meal at home.
He earns a small salary... more when he's in the store than when he's out delivering. They clock him in and out for deliveries.
He has to turn over his tips after every run... he puts them in a box or something... then they are paid to him each night, along with a modest flat-rate stipend for each run he makes as vehicle compensation.
His salary is so small that he hardly ever gets a check worth noticing, since that is withheld for tax. Basically, he lives off tips.
Restaurant owners do it as a community service not expecting to be paid. They are happy to provide incomes and jobs for others, but are delighted when they sleep in homeless boxes with their families every night. That’s what it’s all about. None of that nasty profit motive going on there. These are pure people who are free of capitalist urges wanting only to feed the masses.
I believe that some restaurant(s) did that, and were forced to retract that policy when the news outlets picked it up and claimed it was “illegal” or something.
Some places outside the U.S. do not have the custom of tipping. Take Australia, for example. In Oz, there is no “tipping”. A “tip” is something you give a homeless person or a beggar. It’s considered something of an insult, as if you consider the person pitiable and in need of your benevolence.
Then again, if I ever get the chance to do so, I would deliberately tip certain individuals a few coins if I were ever forced to meet them to show them exactly what I think of them. Nan Pelosi, Obama, Reid, Sharpton, Jakson, Holder... just to name a few.
Between this and Obamacare, these businesses are pretty much screwed. But hey, that doesn’t stop the liberal march over the cliff and into the ocean.
If only these greedy capitalist pigs of business owners would make less profit...
Ah yes. 42-36 = 6
(6/36) * 100 = 16.67% (the real percentage change).
So $10.00 * 1.1667 = $11.67
And then you are taxed on top of that (usually about 7.15% or as much as 10.5% around these parts). At the lowest rate you would pay $1.78 more for the same exact thing.
$10.00 * 1.0715 = $10.72
$11.67 * 1.0715 = $12.50
$12.50 - $10.72 = $1.78
If you tip 20% for good service, your tip just went up from 2 bucks to $2.33. While not earth shattering, most restaurant bills at a decent sit-down place for two people are closer to 40-50 bucks. I’ll let someone else do the math...
Jesse Jackson has already suggested that white businesses be forced to stay in towns after blacks take over the levers of power. Nothing would surprise me any more.
The same goes for discrimination laws. Only the government should not be allowed to discriminate. The private sector should be free to refuse anyone on any basis.
Try saying that at a party and see if you survive the night. ‘-)
The way it works is that the restaurant has to bring the workers’ tip receipts up to the minimum wage. So in high-end places, where the prices are high, the waiters make plenty of money from tips and the restaurant doesn’t have to supplement them at all. I think they pay them a minimum, $2 or so. In lower-end places, like diners, it makes the economics of the restaurant infeasible. Very mean to mom-and-pop type places. Means nothing to the fancy places.
Good we can kill off the rest of them so there is 0%.
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