Seattle Restaurant Data: Sorry GOP, Minimum Wage Increase Isn’t Killing Business


The number one argument GOP corporate parrots use against raising the minimum wage is that it will kill businesses. When Seattle put in place a plan to raise the minimum wage to $15 an hour, lawmakers, lobbyists and CEO’s focused on the business most likely impacted: Restaurants.

Restaurants have a long-standing tradition in this country of passing the burden of paying their servers on to their customers in the form of tips, and lawmakers have made it easier by allowing them to pay them a pittance in the amount of $2.13 an hour. On a slow night, servers sometimes walk away with next to nothing but a loss of eight hours of their lives.

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Data out of Seattle, courtesy of The Big Picture, shows that the wage increases aren’t deterring people from opening restaurants, and contrary to popular pig-headed GOP belief, restaurants aren’t closing their doors.

Permits for new restaurants have remained consistent. The number of restaurants in Seattle isn’t decreasing due to fear of people earning the living they deserve. Since 2013, when the new minimum wage laws were first introduced and looked like an absolute certainty, the number of places to eat in Seattle has increased:

seattle-netrestaurants

Credit: The Big Picture


 

Papa John would probably disagree, but let’s face it; nobody cares what he thinks.

In the midst of the debate and fear-mongering by people who may be able to afford one less luxury vehicle a year due to the law, one Seattle restaurant has put all their eggs in the $15 an hour basket, choosing to enact the full wage increase years ahead of schedule.

Ivar’s, a popular seafood chain in the area, has given every employee a raise to the $15 an hour and enacted some clever policies to cover the cost.

They increased their menu prices by 21 percent and posted that they no longer encourage tipping.  They don’t forbid tipping, and customers have made it clear that they will still tip for good service. Of the 21 percent increase, 17 percent will go to the servers for lost tip revenue and the other 4 percent will cover the wage increase.

Ultimately what Ivar’s is saying is that realistically it only takes 4 percent increases in food prices to cover a $15 minimum wage, and that applies to every employee in the restaurant, not just servers.

Outside of Seattle, Ivar’s is increasing their wages to $11 an hour with a 3 percent increase in costs to cover the cost.

Seattle will provide the country with the data it needs to determine if the wealth inequality we’ve experienced since giving more to “job creators” and less to those who make their businesses successful skyrocketed in the last three decades.

So far it’s not looking good for those who side with greed.


 

H/T: The Big Picture | Image: The Big Picture

 

 

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15 Comments

  • terpmarty80 says:

    Data out of Seattle, courtesy of The Big Picture, shows that the wage increases aren’t deterring people from opening restaurants, and contrary to popular pig-headed GOP belief, restaurants aren’t closing their doors.

    =============
    The $15 per hour just started, didn’t it? I think people will be placing their fast food orders on touch screens instead of talking to a person. Time will tell but not enough time has passed yet.

    • jimtree says:

      The problem is that they will be placing their orders on a touch screen if that is an option no matter what the wage rate is. A human cannot compete with a machine as to cost except for the short period when the replacement machines are first introduced. Once the bugs have been worked out and the cost of the machines inevitably drop as more are produced, humans will start to lose jobs. Unfortunately, we have reached the point where machines and the streamlining of production and distribution are beginning to eliminate human jobs faster than new ones can be created.

      • terpmarty80 says:

        I agree. In the 1800’s, agriculture was the #1 employer. In the 1900’s, manufacturing was. Now, we are turning into a “Service” oriented country, like repairing the machines that break

        • Ed Betterley says:

          No one repairs anything.

          • terpmarty80 says:

            It might be cheaper to replace the tablet, but there are still things being repaired. Plumbing, heating, air conditioning, cars, roofs. On May 19th I will celebrate my 25th year of being self employed repairing Security Systems.

  • LA Chefs column says:

    Washington state is one of seven states that doesn’t allow a tip credit so minimum wage is the same as it is for other types of business, so your article misstates that a reduced $2.13 hour rate is permitted like other states with a tip credit.

  • Echo Moon says:

    for years and years prices have been going up and up. all without increasing the wages that make those businesses possible. the increase in prices have gone toward paying suppliers and INTO the pockets of the business owners.
    the only reason that the business owners may complain is a loss of more money to be kept from their pockets. now i don’t blame anyone with a business for wanting to make a profit…. but when you consistently make that profit to the detriment of the employees that make your business operate???

    the GOP’ers that are cringing, crying and opposing the raise in wages??? those are the shills that are owned by the big business operators. and those people are putting the squeeze on the greedy, owned politicians. and those owned politicians are afraid of making their masters angry with them and then they wont get paid themselves!

  • diamondmask says:

    Twenty One percent is pretty substantial. I think they would have been wiser to raise prices 5% and keep tipping the same. When a $25 meal becomes $30, that may be enough to keep some people from eating there. But if it becomes $26, I don’t think most people would even notice. However, if it works for them, great.

    • Namenomnomnom says:

      Bear in mind that you are simultaneously significantly increasing the pool of people who can afford an occasional dinner out.

      but 21% is probably greedy. Only one cost of a meal goes up here. Produce, meat, heat, lights,rent, insurances, interest on debt, printing menus, advertising … in short *most* of the costs of presenting the meal did not go up when the wages did. So only a small percentage of the cost of a guest meal increased at all.

      Only if all of those costs had risen by 21% at the same time as wages would a 21% increase in the cost of dinner be justifiable as such.

      • John Far says:

        “Bear in mind that you are simultaneously significantly increasing the pool of people who can afford an occasional dinner out.”
        Uhhh, no. Transfers of wealth do not create wealth.

        • Namenomnomnom says:

          Of course not. Only workers create wealth. The transfer of that wealth to people who will never live to spend it is sand in the gears of further wealth creation.

          I think what you meant to say was that billion$ sitting in Cayman Island accounts not only don’t create wealth. They impede the wealth creation that could be created by investment of that money in genuinely productive endeavors.

          Similarly, “investment” of wealth, misappropriated from the workers who created it, into paper – shuffling derivitives, ponzi schemes, and the other nonsense that makes hedge fund managers richer than nations and the rest of us poor has a clear result.

          Every dollar “invested” in such nonsense is therefore not invested in creation of actual wealth, only ciphers on a spreadsheet.

          Reliable working people are being dispossessed of their homes because banks won’t invest in mortgages for them while bigger–quite illusory in terms of any service to human survival–paper profits are available from the ponzi schemes.

          Every dollar invested in some bullcrap, derivitive, system – gaming dodge is not invested in the next Edison, the next advance in health care or sustainable food production or improved transportation or shelter technology or energy or education or *anything else of value to humanity.*

          Yes we have to begin to reverse the transfer of wealth from the workers who create it to the leech class who have never met anyone who has ever produced a good.

          Raising the minimum wage is a small step in this direction.

          When every minimum wage worker in a city is making $15 for every $8 they used to make, more people in the city can afford dinner out. The truth of this is as unmistakable as rain tending to move more often down than up.

          This benefit doesn’t arise from new wealth creation but from the interruption of counter-productive transfers of wealth from those who create wealth to the leech class. Capitalists.

          However, all the money flying around the city can indeed facilitate more genuine wealth creation. Whereas giving those very same dollars to the Walmart heirs to park in Switzerland only sucks fuel away from the combustion of genuine wealth creation.

          And if the entire economy begins to allow a larger slice of created wealth to go the the wealth creators (workers) and less to the leeches, the the invigorated circulation of wealth naturally yields more wealth *and* a mode equitable world.

        • Ed Betterley says:

          Slave labour should have ended years ago.2 something an hour is sick.

  • Argle_Bargle says:

    Would it have damaged the story to lead with ‘Sorry, Plutocrats…’? (or something more graphic)

    The ‘We’s gonna git them bad, bad Republicans’ shtick is over. Class warfare is the new black, if you dare.

  • John Far says:

    Apparently Mr. Topher never took a college level economics course as even textbooks recognized the unintended consequences of the minimum wage. In fact, I believe the subject topic was exactly that, unintended consequences of policies including rent control and wage and price controls. I don’t believe Republicans are writing college textbooks for major universities, but perhaps Mr. Topher can uncover that conspiracy.

  • cashman966 says:

    I find it interesting that in an article about killing business you provide only details on new permits issued. A fair comparison would be new permits vs closed businesses, pre-law and post-law. Providing only half the picture does not give any useful information.

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