Seattle’s Minimum Wage Increase Causing Small Businesses To Close
By Brian Anderson, March 14, 2015.
When Seattle voted to raise its minimum wage to 15 dollars an hour, progressives and lefties everywhere hailed it as a victory for working people. What they never stopped to consider is that those additional funds have to come from somewhere and small independently owned businesses wouldn’t be able to afford to pay its employees. Shock of all shocks: with the huge increase about to take hold, small businesses are closing their doors in record numbers in the Emerald City.
Seattle Magazine reports:
Seattle foodies were downcast as the blows kept coming: Queen Anne’s Grub closed February 15. Pioneer Square’s Little Uncle shut down February 25. Shanik’s Meeru Dhalwala announced that it will close March 21. Renée Erickson’s Boat Street Café will shutter May 30 after 17 years with her at the helm…
In fact many small businesses are closing up shop and/or moving out of the city. And just what could be behind this unprecedented “going out of business” epidemic. Well, this:
…another major factor affecting restaurant futures in our city is the impending minimum wage hike to $15 per hour.
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: “It’s not a political problem; it’s a math problem.”
And just check out the math that liberals and low-information voters never bothered to look at:
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.
So rather than being a huge victory for working people, the $15 an hour minimum wage hike is running entrepreneurs out of business and putting people on the unemployment line. If only there was group of people, like conservatives for instance, that could have warned this would happen. Oh wait, Republicans did warn about this and the liberals of Seattle didn’t listen.
Lefties always think they know best. It can’t be a coincidence that they are wrong about literally everything.
http://downtrend.com/71superb/seattles-minimum-wage-increase-causing-small-businesses-to-close
