Sorry, but I don’t entirely buy these stories.
Here’s why.
Let’s assume all restaurants in Seattle are forced to pay the $15 minimum wage. They will by definition have to raise their prices to compensate. Most of these stories seem to assume that prices cannot be raised to compensate.
If restaurant A is forced to pay $15, but restaurant B pays only $10, then restaurant B will have a significant competitive advantage, undercut restaurant A’s prices and perhaps drive it out of business. OTOH, if both are forced to pay the higher wages, both will raise prices and the competitive situation remains the same.
Which means the main effect will be that the cost of restaurant meals across the whole city will increase. Especially at the low end, since wages consume a lower proportion of total sales at high-end restaurants. Higher prices may result in fewer meals eaten out, therefore a reduction in the total spent on such meals and some restaurants going under. Interestingly, this means that in the final analysis the main effect will be that lower-income people who eat out will have their costs increase more proportionately than higher-income people.
It may also give restaurants just across the city line a competitive advantage.
But restaurants are not a terribly price-sensitive business, as can be seen by the enormously wide price range found already.
Increasing costs across an industry simply does not in and of itself drive businesses under. Its primary effect is to raise prices for that industry. Witness the effects over the years of fuel price increases on the airline industry. Main effect is that ticket prices go up across the board.
Another effect, BTW, is to incentivize paying workers, especially illegal immigrants, under the table.
I’m not particularly in favor of these minimum wage increases, but they simply don’t have the effects these type of articles toss around.
This reminded me of what Hillary said in 2008: "The ['Hillary Care'] plan prescribed some eye-popping maximum fines: $5,000 for refusing to join the government mandated health plan; $5,000 for failing to pay premiums on time; 15 years in prison for doctors who received ‘anything of value’ in exchange for helping patients short circuit bureaucracy; $10,000 a day for faulty physician paperwork; and $50,000 for unauthorized patient treatment. When told the plan could bankrupt small businesses, Mrs. Clinton said, 'I can’t be responsible for every under-capitalized small business in America'!" -- Tony Snow reporting on Hillary's health care plan
That’s how it is in a business. You can’t argue with the bottom line. If your expenses are greater than your revenue, you lose money. Nothing can change that.
Business owners work long hours, and get paid only if there’s any money left over after paying employees, rent, taxes, fees and supplies.
Our debt is over $18,000,000,000,000. We can't pay that back so we must make that amount a pittance. So what if it destroys America? That works right into their plan.
How dare them! A companies sole purpose is to provide a livable wage to it’s employees. Everybody knows that. /s
Restaurants will be the hardest hit in this. Typically, in a large metro area, new restaurants have a 50% attrition (closing) rate in their first six months. Then half of the remaining restaurants close within a year. So a 75% failure rate in one year.
So, if you like your restaurant, you better enjoy it while it lasts.
Of course, Z's owner must be a liberal, or she would think of that...The suburbs must be Liberals too, of they would.
“Restaurants open and close all the time, for various reasons.”
What a cavalier attitude for one who advocated for the increase that will leave most of those advocated for unemployed.
The modern equivalence of "Let them eat cake."