Minimum wage increase impacts local restaurants

summit daily news ^ | February 4, 2007 | KIMBERLY NICOLETTI

[george76]

Before Amendment 42 passed in November, some restaurateurs weren't concerned about a minimum wage increase, but as it turns out, the law is impacting restaurant budgets significantly.

"It's a huge change," said Barb Richard, marketing manager for the Dillon Dam Brewery. "We've had to tighten our belt everywhere, from ads to raises, and cut costs dramatically. (But) there's no way to absorb it completely."

Eric Mamula, owner of Downstairs at Eric's in Breckenridge, said he's paying his waitstaff $75,000 to $80,000 more annually because of the amendment, which calls for waitstaff to earn a minimum of $3.83 an hour, up $1.70 from the previous minimum. When the Dam Brewery's management team analyzed the additional cost, it came up with tens of thousands of dollars a year, ...

"It's already expensive to go out, and it's going to be even more expensive," Mamula said. "I don't know if people realized that when they voted."

Meanwhile, the waitstaff isn't benefiting much.

"They're paying much higher FICA, and we're paying much higher FICA. And the capital for raises isn't there anymore," ...

Perhaps most concerning is the fact that the increase is tied to the Constitution, which means it's no longer in the hands of policy makers.

"To us, it was not well conceived," ... "We could not understand why it belonged in the Constitution..."

[george76]

" Democrats to Boost Minimum Wage, Minimum Service ..."

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[showme_the_Glory]

restaurants that were paying sub-minimum wage will just offset the % of tips they hold back to compensate?

[george76]

“In exchange for higher pay,” said Sen. Kennedy, D-MA, “my bill would require that minimum-wage workers increase their service to their employers and customers to some federally-mandated minimum levels.”

http://www.scrappleface.com/?p=2404

[A. Pole]

a minimum of $3.83 an hour, up $1.70 from the previous minimum

How much the price of a meal will be affected by that? If the wage were lowered from $1.70 to $1.00 how much "good" would it do?

[george76]

Restaurants will likely make many different changes...

cutting hours, cutting shifts, closing the doors for few hours when it is slower...?

and raising prices

[A. Pole]

closing the doors for few hours when it is slower...?

Good idea! Better let the employers go home to spend time with family, instead of getting $1.70 per hour.

[george76]

Everybody's richer now!



ht AmishDude

[A CA Guy]

Out here in California I am friends with a fellow who is the owner of a large chain of independent restaurants.

He told me he has been operating near the red for a few years and was just about to see it turn around until this.

The last time the minimum wage went up a quarter he saw a three month loss to his business of $250,000.

The end result of an increased minimum wage is job loss, business closures and decreased revenue from taxes to the treasury.
From the market... If people are worth more the market place does afford them the opportunity to earn more. If they need big daddy to dictate they should get more, then it is a form of welfare that reduces income long term to the treasury and that is about it.

[george76]

a minimum of $3.83 an hour will likely annual increases thereafter...

plus tips

[george76]

The employees likely need the job to pay their rent, etc.

Sending them home early is nice, but they still will have to look for a second job to pay the rent, etc.

[george76]

will...with likely

[george76]

We agree.

Government madated expenses do not work well.

The restaurants can not raise the menu prices forever. Many of us will eat at home, etc.

Then the restaurants have the unfortunate decision : do we close the doors and lay everyone off ?

[A CA Guy]

I also noted a recent slight recession starting in two businesses that are a good indication of what will happen down the road to the general economy.

#1 Delivery businesses
#2 Limo services

When you see a slow down in the two businesses above, months later the rest of the economy follows from my life experiences.
Limos are what people and businesses do with EXTRA money and Delivery services are used when a company are too busy to do some things themselves. When it slows down, companies choose to do more themselves.

So my point is this minimum wage increase is coming as the economy is hitting a tough patch, which could result in an economic disaster IMO.

[socal_parrot]

My daughter is a server at local fine dining restaurant. They have made changes since the new minimum wage law came into effect. They have cut shifts, laid off a hostess, raised prices and now have a policy that adds 20% tip on parties over 6.

[george76]

These businesses will not do well in a declining market.

Add lots of new government mandates and they may fail...putting employees into the unemployment lines.

[A CA Guy]

Restraunts will especially be gasping for air.

I would like to see a $4 an hour minimum wage for non-adults working. That would be one way for some kids to get work and be a draw more than illegals.

There are lots of issues we could raise.

[george76]

Good luck for your daughter and her restaurant.

Looks like tough times ahead.

[Goldwater and Gingrich]

When I was a waiter the pay which was $2.10 an hour witch barely paid the taxes. All my income was tips.

With a pay of $1.70 and if they have to report most of there tips, I bet many had negative pay checks.

The cost per week if you work 40 hours is $68. V $153.

This is not a major cost to the employer. The wait staff has always been looked at a free labor.

I do think there should be no minimum wage for any one over 21 years old.

[Starwolf]

My favorite local resturant just posted a price increase and openly attributed it to the new minimum wage laws.

[geo40xyz]

Its the democRATs fault:-()

Just the start of 'bad' things to come, for sure.