Seattle Magazine wrote a story last week which, among other things, claimed a “major factor” affecting the future of restaurants in the city is the impending $15 minimum wage.
To which Dori said he wasn’t surprised.
“The restaurant owners said certainly there are a lot of reasons, but they said that $15 an hour is a major factor in all of this.”
The same day, The Seattle Times wrote a report called Truth Needle: Is $15 wage dooming Seattle restaurants? Owners say no, claiming it’s not true that $15 an hour is linked to closures.
“Conservative pundits say recent Seattle restaurant closures may have been linked to the city’s new $15 minimum wage. We find that claim to be false,” the article starts off.
While the 7-year incremental increases won’t start until April 1, Dori believes some restaurants are already planning for $15 an hour minimum wage, given that labor is a large portion of their operating costs.
“I’m sure that they are and that’s what should be explored,” agreed Paul Guppy with the Washington Policy Center. His group also wrote a story titled “Seattle’s $15 wage law a factor in restaurant closings.”
He added that his research indicates Seattle restaurants are concerned about the rising cost of labor, calling it a “major factor” in their business decisions.
“Business is about the future, so it’s thinking, ‘What are my costs going to be in the next quarter or the next year.’ Labor comprises between 30 and 40 percent of running any restaurant. Profit margins are thin,” Guppy said.
“Unless we are changing the laws of economics where we can just raise prices without consequence, I don’t know how anybody can say that this isn’t going to have some impact on jobs and sustainability of these enterprises,” Dori said.
Guppy agreed and said it’s up to the media to ask businesses, ‘What is the economic impact of this,’ rather than, ‘Have you had to close because of the $15 minimum wage.’
Guppy said he believes the entire city is energized over the issues because “Kshama Sawant and the $15 Now activists have put all their eggs in this basket.”
“I think they’re nervous about the national attention that Seattle is getting and from a political point of view, they absolutely have to have the $15 minimum wage seen as a success.”