Another restaurant falls victim to Seattle’s wage law
Apr 30, 2015, 3:33 PM | Updated: May 5, 2015, 10:40 pm
Z Pizza will be closing in the next few months because it can't withstand Seattle's minimum wage law owner Ritu Shah Burnham told KIRO Radio's Dori Monson. (AP)
(AP)
She did the math.
Z Pizza may have recently begun making a profit, but owner Ritu Shah Burnham said it won’t last long.
“I can’t continue to struggle and work as hard as I do and not get any return,” Burnham told KIRO Radio’s Dori Monson. “The numbers don’t work.”
Z Pizza, the only one in the Pacific Northwest, according to Burnham, will close in about four months. The pizza restaurant employs 12 people. Burnham began working more and cutting shifts to help the business break even, she told Dori.
Z Pizza’s began breaking even in 2014. By January 2016, if the restaurant does not see a 20 percent increase in profit, it will lose money.
“I don’t want to go backwards and I feel like I would be,” she said on air. She would need an “astronomical” amount of revenue to match the requirements of the minimum wage law.
Seattle’s wage law went into effect April 1. The law gives businesses the option to phase in higher wages over several years.
Businesses with more than 500 employees nationally have three years; those providing health insurance will have four. According to Seattle’s roll-out schedule, employees working for these large companies should be making at least $11 per hour.
Smaller businesses will have seven years to phase in the higher wages, which will include consideration for tips and healthcare costs.
Burnham said labor costs are 33 percent of her expenses. That’s going to jump to about 50 percent in 2016.
Franchise businesses, such as Z Pizza and Subway, are considered large employers.
Businesses such as Z Pizza can’t just — at the snap of a finger — increase the amount of customers they need to meet the new wage requirements, Dori said. And if they raise prices, they’re apt to drive customers away.
Dori told Burnham his biggest frustration with the minimum wage law is that it is being coordinated by “career politicians” who have never worked in the private sector.
Will Burnham consider opening another business in Seattle? Dori wanted to know.
“No,” she responded.
