‘A recipe for disaster’: WA Hospitality CEO warns of more restaurant closures as Seattle’s minimum wage climbs again

Seattle’s minimum wage will rise to $22.14 an hour on Jan. 1, up 84 cents from this year. The head of the state’s restaurant industry said operators can’t afford another round of cost increases.

Anthony Anton, president and CEO of the Washington Hospitality Association, told “The John Curley Show” on KIRO Newsradio that the region has “a recipe for disaster right now.”

“I think out here on the West Coast, in our corner, we kind of have a recipe for disaster right now,” Anton said. “Last year we talked about Seattle’s got the second highest prices of all the major cities’ restaurants across the country, and I’m pretty sure this year we will push into the number one category of being the most expensive. We also have the nation’s lowest profit margin.”

He explained what that margin looks like at the dinner table.

“You spend $100 for your family with dinner, which is probably not out of line in today’s prices,” Anton said. “The restaurant’s taking home $1.50.”

Anton said labor now makes up more than 40% of what customers pay, and customers are pushing back.

“The customers have said, ‘I’m not sure I’m comfortable at these price levels,'” he said. “The stress on operators just seems to keep increasing.”

Curley said he’s felt it himself.

“We pay $25 for a cheeseburger,” Curley said. “I’ve cut back on my restaurants. I was in New York City the other day, and I paid less in New York City, almost by 30%, than what I pay in Seattle.”

“I wish that surprised me,” Anton said. “But the reality is, Seattle has just gotten completely out of line with the rest of the country, and the operators are absolutely paying for it.”

‘All sides are losing’

Anton said the workers the wage laws are meant to help are losing out too.

“Look how many places across the city are no longer open for lunch, or open on a Monday or on a Thursday,” Anton said. “The workers have lost hours. I think the workers and the owners are in this together. I think all sides are losing right now with the way we’ve designed the policies in this region.”

Curley pressed Anton to push lawmakers harder.

“The true minimum wage is zero, because a price is a wage and a wage is a price,” Curley said. “You can dictate anything you want when you pay that person, but you can’t dictate that somebody eats that cheeseburger.”

Anton said that without what he called a “dynamic change,” the state is on track to lose about 9% of its restaurants. He pointed to Washington, D.C., where voters approved phasing out the lower wage for tipped workers in 2022. The D.C. Council later voted to cap the tipped wage at 75% of the regular minimum wage through 2034.

“In D.C., you really saw the servers stand up and say, ‘Well, wait a minute,'” Anton said.

Anton said some operators are looking to technology to cut costs, including QR code ordering, artificial intelligence and inventory systems, because they don’t expect relief from City Hall.

“So far, the magic gadget hasn’t been found,” he said.

He said the solutions already exist elsewhere.

“You look across the country: 44 other states have answers to this, and they’ve recognized tips as income and have had more reasonable labor laws,” Anton said. “So it’s not like we don’t know the answers.”

Watch the full discussion in the video above.

Listen to “The John Curley Show” weekdays from 3 p.m. to 7 p.m. on KIRO Newsradio 97.3 FM.

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