Citing higher minimum wages in Seattle, Portland, and SF, West Coast restaurant chain files for bankruptcy
Progressives never learn. Even as Democrats running for president line up behind a national $15/hour minimum wage, on the West Coast, where cities like Seattle, Portland, and San Francisco all have implemented this demand, a restaurant chain with over 2,000 employees has filed for bankruptcy, citing the high minimum wages that have increased its costs.
Jeremy Hill reports for Bloomberg (hat tip: Legal Insurrection):
Progressive wage policies helped force upscale eatery operator Restaurants Unlimited Inc. into bankruptcy, according to court documents filed Sunday.
The company, which operates 35 restaurants ranging from fine dining to "polished casual" eateries, including Henry's Tavern, Stanford's, and Kincaid's, filed for Chapter 11 protection in Delaware on Sunday. Minimum wage hikes, two disappointing restaurant openings, and consumers shunning casual dining are to blame for the bankruptcy filing, chief restructuring officer David Bagley said in court papers.
The impact of minimum wage–driven higher labor costs was substantial.
Wage increases in Seattle, San Francisco and Portland boosted the company's wage expenses by a total of $10.6 million through its fiscal year end 2019, Bagley said. Revenue for the year ended May 31 was $176 million, down 1% from the prior year.
Keep in mind that many workers who receive higher than minimum wages have contracts that specify that they will receive minimum wage plus a certain number of dollars. So it not merely at the bottom that wages increase.
I am a partner in a restaurant that has adapted to the higher wage environment by using the service format that is gradually supplanting the waiter system of taking orders and delivering them to tables. It is a hybrid of the fast food model, of ordering and receiving food from a counter. Called "fine casual," the system involves a customer ordering at a counter and then receiving the food from a waiter or waitress. This saves both labor expense and time, allowing faster turnover.
So brace yourself for the gradual extinction — except in expense account–driven, high-end restaurants — of the ritual of sitting down and being greeted by a staffer saying something like "Hi, I'm Sarah, and I'll be your waiter tonight."
The effects of a national $15 minimum hourly wage will extend throughout the economy, sawing off the bottom rung of the ladder, where people learn skills, develop habits, and gain confidence that can propel them to higher skills and higher wages.
Lefties will blame capitalism, of course.
They never learn:
Strikers demanding $15 in 2015 (photo credit: Fibonacci Blue).