by Warner Todd Huston | March 13, 2015 5:54 pm
Since Seattle forced a raise in its minimum wage to $15 small businesses, especially restaurants, have been closing all across the city because they just can’t afford the new wage and stay open.
Higher minimum wages always seem like a great idea to people as a general idea. Unfortunately, in real life forced higher minimum wages are disastrous for all small businesses and Seattle is a perfect example of why it is a bad, bad idea.
Seattle’s $15 minimum wage law goes into effect on April 1, 2015. As that date approaches, restaurant 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.” Seattle Magazine,
“Washington Restaurant Association’s Anthony Anton puts it this way: “It’s not a political problem; it’s a math problem.”
“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.”
The truth is, businesses that can pay more often do. But when a government swoops in and demands that businesses pay more it is the death knell for the business sector.
But here is another thing for you all to think about….
Obama has been running around saying that higher minimum wages would be a “raise for America.” This is populist bull hockey. Only 2.6 percent of the country works for minimum wage pay scale. Further, most people who make that wage are in transitory jobs that they never keep for long.
According to the federal government there are 120.18 million workers in the USA. Of that number only 1.532 million are paid the minimum wage.
So, that means a forced hike in the minimum wage makes us all pay higher prices, but only benefits a tiny, tiny number of workers.
Lastly, by what Constitutional rule does government think it can tell business what it must pay people, anyway?
Source URL: https://rightwingnews.com/democrats/seattles-new-15-minimum-wage-law-causing-restaurants-to-close-all-over-the-city/
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