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Article on how resturants cope with minimum wage hikes
2015 Feb 11, 8:17am 1,177 views 7 comments
by zzyzzx follow (9)
Comments 1 - 7 of 7 Search these comments
MisdemeanorRebel
2015 Feb 11, 11:20am
Wow, an anecdotal story proves it all wrong. If we go to 25 cents an hour, watch summer hiring of sudents explode.
Keep in mind the minimum wage was hiked a few years ago TO over $7. If minimum wage increases kill jobs, explain 1945-1990.
Of course, the real way to increase wages is to perp walk those who conspire to violate Federal law by hiring illegals.
tatupu70
2015 Feb 11, 11:21am
Gomez, who owns Mezcal, a Mexican restaurant in downtown San Jose, decided to get by without a restaurant manager or a sous chef. He's since taken on all management duties, and his brother, the chef, is getting by without an assistant.
Were the manager and chef making minimum wage?
The reason why profit margins at restaurants are allegedly thin is because of the real estate rental rates for these restaurants. That's where the problem is located at and why it's largely a rip off to eat out vs cooking at home.
zzyzzx
2015 Feb 11, 12:38pm
because of the real estate rental rates for these restaurants. That's where the problem is located
Property taxes make the rents high too.
tatupu70
2015 Feb 11, 12:42pm
Property taxes make the rents high too.
So you think if property taxes went down, rents would decrease? Why do you think that?
Rents are set by supply and demand.
MisdemeanorRebel
2015 Feb 11, 1:04pm
The reason why profit margins at restaurants are allegedly thin is because of the real estate rental rates for these restaurants. That's where the problem is located at and why it's largely a rip off to eat out vs cooking at home.
Yeah, holy crap. A few years back I was helping a friend start a bakery - you can't even get hoodiest hood rat space for less than $2500/month. Ordinary - not Yuppie - Shopping Malls are over $3500 easy + percentage of sales + one year in advance! Even in areas with perpetual double digit unemployment like Indian River County.
If you want to know why entrepreneurship here is lower than Sweden, just getting a place of business is a full year's salary up front - never mind the equipment, marketing, fees, inspections, etc.
One major problem is empty commercial space is a big write-off. Screw that. You shouldn't get a tax break for empty space - lower your rent to market demand!
No surprise here. When you raise the price of something, you get less demand for that something. It doesn't matter if that something is a hamburger or an hour of someone's labor.
http://www.latimes.com/business/la-fi-minimum-wage-cities-20150211-story.html
--Mostly buy cutting hours...
When the minimum wage in San Jose went from $8 to $10 an hour in 2013, Adolfo Gomez started sending kitchen staff at his Mexican restaurant home early. His mother and brother handled the extra work.
In Albuquerque, Myra Ghattas told cooks and hostesses to come in later when the wage there increased from $7.50 to $8.50 the same year. Down the road, Steve Paternoster started closing the bar early at his Italian restaurant.
"The thought process is that you're going to put more money in people's pockets," said Ghattas, who owns the Slate Street Café, a wine bar and restaurant in Albuquerque. "In theory, that makes sense. But people end up getting hours cut, and they don't actually make any more money."
When Paternoster realized few customers were coming in at 11 a.m. for lunch, and hostesses had little to do, he changed the restaurant opening to 11:30 a.m. He used to pride himself on offering temporary summer jobs for college students, but he has since done away with those positions.
He also reduced the number of waiters through attrition. "It wasn't a rising tide that lifted all boats," he said. "What it did was result in me carrying 14 or 15 fewer waiters."
Gomez, who owns Mezcal, a Mexican restaurant in downtown San Jose, decided to get by without a restaurant manager or a sous chef. He's since taken on all management duties, and his brother, the chef, is getting by without an assistant.