Posted on 03/14/2015 10:39:28 AM PDT by SeekAndFind
Last summer we talked about the rather faint hopes that some Seattle businesses were clinging to as the city moved toward jacking up their minimum wage (for some jobs) to $15.00 per hour. Employers – particularly in the restaurant industry – were asking the city council to reconsider as they evaluated their options in the face of labor costs which were about to rise to between 42 and 47 percent of their operating expenses. It all fell on deaf ears, unfortunately, and the plan is moving forward. And rather than waiting for the roof to come crashing down, some owners are preemptively closing their doors.
Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”
Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36% of restaurant earnings go to paying labor costs.” ..,
“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”
In reference to that last quote, it’s certainly a math problem for the restaurant owners, but that doesn’t eliminate the fact that it’s a political problem for the social justice warriors who shoved this initiative through. Of course, the problems in question are all too real for the workers who are now “benefiting” from having their wages bumped up by more than 50% in some cases, and it involves some calculating as well. Our friend Bruce McQuain asks the question which puts this whole math issue in focus. What’s $15 times zero again?
Are there alternatives to closing? Sure. But they’re the same ones we’ve talked about for years:
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.”
Welcome to the land of $17 dollar cheeseburgers. And, as you can figure out fairly quickly, everything else will be more expensive too … which, of course, erodes the purchasing power of that $15 wage. More importantly, if you work for one of those establishments that is closing, your wage is $15 times zero hours, isn’t it?
Bigger companies who can absorb the financial hit from implementing new technology have already been preparing for these changes. McDonald’s has been experimenting with point of sale automation for taking orders and Applebee’s rolled out smart tablets at tables in multiple locations last year. The latter solution is the most interesting to me because it seems like the easiest for younger consumers to adapt to. Most of the people going out to eat in such places are already familiar with laptops, tablets and smart phones anyway. Having one waiting at the table which takes the place of not only the menu, but the waitress as well, isn’t going to come as much of a shock to the system.
I ran into one of these setups at the Philadelphia airport this winter and they work surprisingly well. If you plan to pay by credit or debit card (which is the only option in some cases) you barely interact with a human at all. You browse the drinks and food on the touch screen, place your order, swipe your card, and a short while later somebody strolls up with your food and beverage, says hello and drops them off. It’s a terribly impersonal service as compared to a bartender or waitress who stops to chat with you, but it gets the job done.
Of course, that last phrase is the big issue here, isn’t it? It gets the job done. That job used to be done by a person. Now it’s essentially a robot. So those workers are no longer on the payroll, but hopefully they’ll catch on someplace else. Unfortunately, as Seattle is finding out, employers who run single outlets and don’t have the backing and buffer range of a major chain often won’t be able to make the shift in technological infrastructure required to cut back on staffing while staying open. Those folks will shut down, and it’s apparently already beginning in Washington state.
You know… if only somebody had tried to warn them.
Those eating places in Seattle that stay in business, will move to a much more highly automated process of taking the order, preparation of the order, and delivery of the order to the consumer.
It may be possible to never even speak directly to a human being representing the eating establishment while this process is carried out.
The concept goes back to the first Automat restaurant, opened in 1902, in Philadelphia, and the businesses were active up through the Depression years, where a selection of staples, like soup, sandwiches, pie, and salads could be served up with the deposit of coins in the refrigerated display case, with tables and chairs to sit and consume the food, then exiting the establishment. There were attendants, who could provide refills of coffee, cleaned the tables, or if necessary, make the change for the prospective diner to select the entree.
Pretty much driven out of business by the growth of “fast-food” burger joints, the last of the Automats closed about 1991.
UNEXPECTED!®
Seattle and the rest of Western Washington is run by total ignoramuses.
They closed the timber industry with the bogus spotted owl, they destroyed the fishing industry, unions are causing Boeing to move more and more production out of state, they closed the film industry and now they are driving out restaurants and other small businesses.
Truly, I think the population who elects our goofy politicians believe that food grows on the Whole Foods shelves and money automagically appears from somewhere to provide everyone with new iPhones, Macs, et cetera.
LOL!
You have had some good posts today.
5.56mm
What’s the problem with a $17 cheeseburger?
Seattleites are rich!
So I’m not seeing the problem.
/s
All I know is, if they’re now getting $15/hr., there’s no reason to leave tips anymore. Right?
Not to worry.
When restaurant prices double the City Council will just vote to give themselves meals paid by the taxpayers.
Living Wages everywhere,
But not a job to work....
It’s evident that those Demoncrats don’t have a clue about economics. They never think of the consequences of their “feel good policies.” Neither do they have a clue how a business is run and operated. Seems to me this should be a litmus test for elected officials. Sigh, I can dream, can’t I? I also wonder how many of these business owners voted for their own demise at the voting booth?
You mean socialist mandated top-down centralized control of wages and prices doesn’t work?
“All I know is, if they’re now getting $15/hr., there’s no reason to leave tips anymore. Right?”
Totally agree. Just how many non-liberals work in restaurants? Who knows but I am sure it is small amount compared to the pot smoking liberal idiots that usually operate those places.
I prefer to frequent family owned restaurants and leave good tips for the excellent service I usually find. (I never leave tips at Starbucks.)
I suppose if I lived in Suckattle I would leave a lesser tip to compensate me for their liberal law that caused my meal price to increase. No way I’d pay the usual 20% or so because I would be paying an inflated price and they won’t get the advantage of that. I’d subtract from the tip the increase in the menu price so that my total cost is the same as before.
That would be cool to see a robot dish up whatever you had ordered at a Mickey Dees. Right now the food line is not very visible. But the robot is not going to get complaints that it scratched its nose before it flipped your burger.
I’d love to see something like this happen:
I lived in Alaska for a bit during the mid-Seventies. The State Health Dept., in their infinite wisdom, had passed a rule that all gas station/restaurants must comply with the strictest health standards. Not a bad idea on paper.
Most of these places, however, were mom and pop places where winter travelers could get something warm to eat/drink while the car was serviced. It was a service to the Alaskan traveler indeed.
So, instead of complying, all 14 places between Anchorage and the Homer, just shut down.
They reopened after the public delivered their response to their elected officials, and the Health Dept. “reconsidered”.
Another great graphic from Travis!
This is another example of where liberalism contributes directly to the rich getting richer and the poor getting poorer: People will leave less of a tip to compensate themselves for the rising meal prices. The owner gets a bit more and the worker gets less even thought they are getting more hourly wage.
If $15 is required of workers then they are making $30,000 or so annually. Why am I tipping someone who makes that much? They are getting paid to fix and bring my meal. I don’t tip the Wal-Mart worker making $12/hour for stocking the shelves.
The Atlas Diners shrugged huh.
Of course, the other kind of restaurant that will thrive will the ones that depend on illegals working off the books. They can now pay even less than they used to because Obama will be providing comprehensive benefits to illegals.
No, just another great graphic that Travis swiped and copied and pasted.
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