I did a very quick back of the envelope calculation, and based on the $700,000 revenues of a restaurant, with the percentages of labor costs noted, that they would have to increase sales by about 18% to make ends meet, after increasing minimum wage to $15 an hour.
Can a restaurant realistically increase menu prices by 18% overnight and still have the same sales revenue? Would the mix of products sold change; would customers opt for some cheaper menu items? Would they tend to skip coffee and dessert? Would they order fewer alcoholic drinks? Would regulars of a certain restaurant still go there, but eat out less often due to the increased cost?
People can do a more involved calculation than I just did, and the business owners affected in Seattle are doing just that. With such narrow profit margins, and a limited ability to just increase your prices to pass along their own increased costs, the squeeze will be on.
Businesses can’t have losses indefinitely and still stay in business. Liberals just don’t understand certain things. And they don’t understand that you can’t just burden business with increased costs with no fallout.
Employer portion of Social Security tax
Employer portion of Medicare tax
State unemployment tax
Federal unemployment tax
Worker compensation insurance
$15.00 an hour would actually be $ 18.75 an hour
What liberals don’t understand is that its not companies paying the bills its customers. The companies are just conduits to pass along the the employees wages.
18% would be enough to get my attention. I think were this hurts the most is with the lunch crowd. Here in fly over country, it is hard to get a decent lunch under $10. Lets say you have a budget for lunch of $10 a day. Your meal now is $12 a day. You either cough up $40+ a month to eat lunch or change your behavior. Restaurants face the risk of losing some of their daytime crowd once they figure out they can save a lot by bring their lunch to work.