$15 Minimum Wage Is Killing Seattle’s Restaurants? Owners Say No

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Seattle is set to launch the highest minimum wage in America next month.Conservatives are warning that businesses will shut down if the new minimum wage law in Seattle is passed, pointing to the recent wave of restaurants closures.

But the problem with their narrative is that the actual owners of the restaurants say that the city is enjoying healthy growth in the food industry, and they aren’t closing because of the rise in minimum wages.

The New York Post editorial board, American Enterprise Institute scholar Mark Perry, Forbes contributor Tim Worstall, and Rush Limbaugh all cited a Seattle Magazine articlefrom March 4 that claimed a “rash of shutterings” was afoot in the Seattle restaurant world. The magazine suggested that the minimum wage law might be a contributing factor in the closures of the Boat Street Cafe, Little Uncle, Grub, and Shanik.[1]

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Renee Erickson, the owner of Boat Street Cafe, told the Seattle times that she is closing her first restaurant, but will continue to run three others and is in the process of opening two more. Asked in an email if the closure was associated with $15 minimum wage, she replied: “That’s weird, ha. No, that’s not why I’m closing Boat Street. Would have said so.”
“I’m totally on board with the $15 min. It’s the right thing to do … Opening more businesses would not be smart if I felt it was going to hinder my success.” said Erickson.
Poncharee Koungpunchart and Wiley Frank of Little Uncle are closing one of their two locations, but again not because of the new law.
“We were never interviewed for these articles and we did not close our … location due to the new minimum wage,” Kounpungchart and Frank told the Seattle Times. “We do not know what our colleagues are doing to prepare themselves for the onset of the new law, but pre-emptively closing a restaurant seven years before the full effect of the law takes place seems preposterous to us.”[2]

The Seattle magazine article itself noted that new restaurants were opening at a healthy clip around the city, and that the Capitol Hill neighborhood is in the midst of “an unprecedented dining boom.”

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Economists argue that minimum wage hikes reduce job growth, but but many other studies and research pieces have challenged their assumptions about business behavior that these experts base their claims on. A study recently conducted showed that the industry would not have to dismiss any employees to cover the cost of rising wages. Add to this the fact that states that increased their minimum wages in 2014 had experienced faster overall job growth than states that did not.


Sources:

[1] http://thinkprogress.org/economy/2015/03/18/3635571/seattle-restaurant-ragnarok-not-actually-happening/

[2]   http://www.seattletimes.com/seattle-news/politics/truth-needle-is-15-wage-dooming-seattle-restaurants-owners-say-no/

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8 COMMENTS

  1. Conservatives are warning that businesses will shut down if the new minimum wage law in Seattle is passed, so they dont want to make monny annymore? okey then. tough luck. maybe we should get putin to doo something abouth those greedy bastards. since obama cant.

  2. $15 minimum is a lot! Small businesses will go broke, and the people who demanded higher wage will be to blame! In Belgium the minimum wage is around €8, which i think is reasonable. If a person want to earn more, they will have to work more. The stupid thing is : Those people are always complaining about bat wages, well is suggest that those people start their own business, we’ll see how they fail to run a business with profit. If you’re not willing to take a risk, then don’t expect that you’ll earn big money.

  3. Welcome to American where the cost of living exceeds minimum wage, businesses have you working low hours so they can minimize the benefits they have to offer. I have to work two jobs and that is sad. One should not have to slave themselves out and give up any chance at a personal life just so they can live like a human being. Where is the life liberty and the pursuit of happiness I was promised? Instead I was given the life of a wage slave.

  4. Actually the reason why these people are working these jobs in the first place most of them are young have not so good credit or just can’t find a decent job I’m pretty sure if they could they’d all have a business of there own and a lot of these guys girls and other have kids they can’t take risks but they still need to make ends meet

  5. I guess the places that pay the best wages will attract the best workers. This leaves those who dont pay well with the scrapings at the bottom of the barrel

  6. Considering it won’t get to $15.00 until 2021 I can see how they might say that right now. Also minimum wage doesn’t have the same impact on restaurants whose employees work for tips.

  7. Well, anything Rush Limbaugh is against I’m for almost by default…he needs to put down the Oxy and just finish himself off.

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