Why Are So Many Seattle Restaurants Closing Lately?


#1

Seattle eateries closing as $15 minimum wage approaches

Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurants across the city are making the financial decision to close shop. The Washington Policy Center writes that “closings have occurred across the city, from Grub in the upscale Queen Anne Hill neighborhood, to Little Uncle in gritty Pioneer Square, to the Boat Street Cafe on Western Avenue near the waterfront.”
Of course, restaurants close for a variety of reasons. But, according to Seattle Magazine, the “impending minimum wage hike to $15 per hour” is playing a “major factor.” That’s not surprising, considering “about 36% of restaurant earnings go to paying labor costs.” …,
“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”

Seattle eateries closing as $15 minimum wage approaches « Hot Air

There are consequences to ill thought out laws. This should make obama and pelosi happy the more people on unemployment and welfare the better.


#2

From the article: (emphasis, mine)

In reference to that last quote, it’s certainly a math problem for the restaurant owners, but that doesn’t eliminate the fact that it’s a political problem for the social justice warriors who shoved this initiative through.

Bingo!

Plus, deserves repeating:

What’s $15 times zero again?

And then there’s the fact that the bigger chains can afford to go automated with “smart tablets” in place of wait staff, but as Jazz Shaw (author of article) put it:

Not very personal, but it gets the job done.
Of course, that last phrase is the big issue here, isn’t it? It gets the job done. That job used to be done by a person. Now it’s essentially a robot.

I can hear the Liberals screaming already about the GREEDY big corporations not caring about "the little guy."
Of course it never occurs to them that they’re the ones who put the little guy out of work in the first place.

I don’t feel the least sorry for the fools who voted this in. I do worry, however, that they’re going to have to go somewhere…


#3

Only thieves and fools attack the poor by supporting minimum wage increases, thieves and fools also tend to be too lazy to move for economic reasons so they will just “retire” (Welfare) where they are.

That is the California dream, now the whole west coast I guess.


#4

Sadly. But considering my options, I guess I prefer to pay for it from a distance.


#5

Seems to me Seattle must have an awful lot of cheap residents if restaurants are closing because of this raise in the minimum wage. The median wage for college educated people in Seattle is $72,000 annually. That means that 50% of the population in the city make $72,000 and above annually. While not princely, that’s a damn good median wage level and should easily support a wide variety of restaurants and bars. Seattle is a fairly young, single, tech oriented city with a lot of people who don’t cook at home. If such a population can’t keep service industries in business, it has to be because the residents are cheap bastards who don’t want to pay a decent price for a meal. Seattle should be embarrassed if this is truly happening as a result of a minimum wage increase of this level. The truth of the matter here is that the OP is rightwing propoganda that cherry picked the closing of a few restaurants in an industry with a high riate of turnover.


#6

More class envy. Rich people not giving up their hard earned money to eat over-priced meals now somehow equates to them being stingy, rather than unwise.

Perfect.


#7

It’s not cheap to go out to eat on the west coast now as it is. This is sure to kill a lot of restaurants that already struggle.


#8

Seattle is one of the most rapidly growing cities in the nation and a fast growing city doesn’t turn into Detroit because of a phased in minimum wage boost. And it’s nothing to do with class envy. I earn more than the median wage earners in Seattle, but I’m not a cheap bastard. When I go out, I’m prepared to spend. I’m happy to contribute to the services industry.


#9

Exactly, “it seems to you”.

To those who understand economics and the connected nature of the entire economy this is no surprise and was in fact prophesied.

Market Forces, whether created by legislative action or naturally through the supply and demand realities all have an effect on every aspect of the economic puzzle.

When the minimum wage that must be paid exceeds the value of the job that needs to be done the job disappears via reorganization, inspired technological advancement or by just not being done. Those entities that can adjust will do so and those that cannot will cease to exist but the poor will suffer the most from fewer entry level job opportunities being available to get a start.

In spite of what it “seems like to you” this is not an unknowable or overly complex dynamic to understand.


#10

I watch those reality shows for reorganizing restaurants in trouble. To run it efficiently, control costs and still have prices that will compete, the retail cost of an item goes something like this; one third for labor, a third for food and a third for rent, utilities, insurances, equipment and profit.

Adding an additional 33% to the cost of the meal will not be sufficient. As minimum wages increase, so will the increased labor costs on suppliers too, which also increases your other costs. I suspect over time, the cost of that meal could go up by 40 or 50%. That’s when demand goes down as well as profits.


#11

Yes. And last I looked, wealthy people didn’t get - and stay - that way by throwing their money away willy nilly just because they could.
It ain’t only frugal people who expect some value for their money.


#12

Add to that: (From that article w/a little ‘fix’ from me:

Welcome to the land of $17 dollar cheeseburgers. And, as you [make that SOME PEOPLE] can figure out fairly quickly, everything else will be more expensive too … which, of course, erodes the purchasing power of that $15 wage.

Life is about to get a tad rough for Seattle residents. After all, their landlords have to eat, too.


#13

Bingo, I do not pay more for anything because “I can” and neither do the wealthy unless we are talking about the few who got wealthy by being entertainment or sports stars.

Those who earned their wealth by learning how to traverse the competitive jungle and survive the long, scary winters of great risk with no reward until sound decisions pay off do not buy 17 dollar cheeseburgers as a dietary staple.


#14

'Zactly. I’ve been up and down the economic scale, and even in my wealthiest days could think of far better things to do with 80 bucks than take the wife and 2 kids out for a sandwich and fries.
You, too, I imagine. I’m also willing to bet that you’ve shelled out far more than $80 for a dinner or ten; only those came with fine food, atmosphere, and gracious service.

I’ll also bet that as a result of refraining from ‘spending loosely’, you have some quality ‘stuff’ that lasts.

Just a guess or two. ~wink~


#15

Thanks for the input. I run a business and know how to gauge wages, but it isn’t a restaurant so had no clue how to cipher how much meal costs would have to up to turn a profit.

33%-40%? Good luck to anybody staying in business with having to hike prices to their customers THAT high.
There’s only so many costs a business owner can ‘eat’ before he goes kerpluhoohey.


#16

More Seattle restaurants close doors as $15 minimum wage approaches


3/12/15

“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.”

“Seattle is rightly famous for great neighborhood restaurants. That won’t change. What will change is that fewer people will be able to afford to dine out, and as a result there will be fewer great restaurants to enjoy. People probably won’t notice when some restaurant workers lose their jobs, but as prices rise and some neighborhood businesses close, the quality of life in urban Seattle will become a little bit poorer.”

[Sarcasm] Well! If those restaurants won’t pay their employees what the governments says they should, they shouldn’t be in business! Nor should their employees have such low-paying jobs! [/Sarcasm]


#17

Guess they got that one down…


#18

Absolutely stunning. Seattle is one of the most wealthiest places in the world on average and yet here are conservatives ranting about the minimum wage being raised in a place with extreme wealth while they sip their $12.75 cup of coffee. The hatred most conservatives have towards the Middle Class worker is disturbing. And the article is nothing but a hit piece. Nowhere does it mention this increase will take years before it goes to $15 an hour. People who read just the article without reading other sources will believe that on April 1st the wage shoots up to $15. Half truth tactic often used in today’s media. Especially outlets with a political agenda, which this outlet obviously has. And Regardless, so what if it raises restaurant menu prices? Poor people and working single parents shouldn’t be eating in restaurants. They can buy premade frozen dinners at the Dollar Store for $1 per person. Those people aren’t welcome in Seattle anyway.
Doesn’t a city have a right to pass laws designed to run poor people out of town like Seattle is doing?


#19

Squirt all the ink you want, OSB, the bottom line is that Seattle’s $15/hr. - and SF’s slightly lower - minimum wage is destroying businesses and the jobs of those who were employed by those businesses. Tell me again who hates those working at those businesses! I would think it was the people destroying those jobs and businesses. Silly me!


#20

I think OSB was also being sarcastic, Pete. This was my clue:

Poor people and working single parents shouldn’t be eating in restaurants. They can buy premade frozen dinners at the Dollar Store for $1 per person. Those people aren’t welcome in Seattle anyway.