On 8/4/2015 11:27 AM, graham wrote:
> On 04/08/2015 11:03 AM, Japhy Ryder wrote:
>>
>> Gee, go figure, when costs go up, businesses close...
>>
>> http://www.forbes.com/sites/timworst...-minimum-wage/
>>
>>
>>
> CRAP!!!! *Others are predicting the opposite.*
I'm not intereted in predictions, I'm interested in the actuals:
http://www.westernjournalism.com/15-...s-close-doors/
Earlier this month, Seattle Magazine asked, Why Are So Many Seattle
Restaurants Closing Lately?:
Last month€”and particularly last week€” Seattle foodies were downcast as
the blows kept coming: Queen Annes Grub closed February 15. Pioneer
Squares Little Uncle shut down February 25. Shaniks Meeru Dhalwala
announced that it will close March 21. Renée Ericksons Boat Street Café
will shutter May 30 after 17 years with her at the helm€¦What the #*%&$*
is going on? A variety of things, probably€”and a good chance there is
more change to come.
The magazine went on to report that one €śmajor factor affecting
restaurant futures in our city is the impending minimum wage hike.€ť
Anthony Anton, president and CEO of Washington Restaurant Association,
told the magazine, €śIts not a political problem; its a math problem.€ť
He estimates that restaurants usually have a budget breakdown of about
36 percent for labor, 30 percent for food costs, and 30 percent to cover
other operational costs. That leaves 4 percent for a profit margin. When
labor costs shoot up to say 42 percent, something has to give.
> One resto has increased its prices but has stopped tipping. Think about
> it: many decent restos suggest 15-20% as a tip. That adds a hulluva lot
> to the bill for competent service. Increase the wages and remove the
> tipping and you still pay the same amount. If you get lousy service,
> complain.
> Graham
Are you daft?!?!?
This is NOT about tipping, which should be a constant regardless of
wage scale.
This is about increasing labor costs independent of any reduction in
other fixed costs, period.
Grow a brain, please!
http://www.seattlemag.com/article/wh...closing-lately
And for Seattle restaurateurs recently, there is also another key
consideration. Though none of our local departing/transitioning
restaurateurs who announced their plans last month have mentioned this
as an issue*, another major factor affecting restaurant futures in our
city is the impending minimum wage hike to $15 per hour. Starting April
1, all businesses must begin to phase in the wage increase: Small
employers have seven years to pay all employees at least $15 hourly;
large employers (with 500 or more employees) have three.
Since the legislation was announced last summer, The Seattle Times and
Eater have reported extensively on restaurant owners many concerns
about how to compensate for the extra funds that will now be required
for labor: They may need to raise menu prices, source poorer
ingredients, reduce operating hours, reduce their labor and/or more.
Washington Restaurant Association's Anton puts it this way: €śIts not a
political problem; its a math problem.€ť
He estimates that a common budget breakdown among sustaining Seattle
restaurants so far has been the following: 36 percent of funds are
devoted to labor, 30 percent to food costs and 30 percent go to
everything else (all other operational costs). The remaining 4 percent
has been the profit margin, and as a result, in a $700,000 restaurant,
he estimates that the average restauranteur in Seattle has been making
$28,000 a year.
With the minimum wage spike, however, he says that if restaurant owners
made no changes, the labor cost in quick service restaurants would rise
to 42 percent and in full service restaurants to 47 percent.
€śEveryone is looking at the model right now, asking how do we do math?€ť
he says. €śEvery operator Im talking to is in panic mode, trying to
figure out what the new world will look like.€ť Regarding amount of
labor, at 14 employees, a Washington restaurant already averages three
fewer workers than the national restaurant average (17 employees). Anton
anticipates customers will definitely be tested with new menu prices and
more. €śSeattle is the first city in this thing and everyones watching,
asking how is this going to change?€ť