A freshman economics class teaches you this lesson. Politicians have never taken Econ 101.
Restaurants typically operate on a narrow margin, usually 5%
That does not allow for raising minimum wage to $35,000 per year per employee.
James Beard award-winning chef Matt Dillon will close his much-beloved restaurant Sitka & Spruce at the end of the year, citing increased costs of doing business in Seattle.
“In order to buy great product and pay a great wage that people can live on in our city … the math just doesn’t work,” Dillon told The Seattle Times food writer Bethany Jean Clement.
“There’s gonna be a reckoning, big-time,” he continued. “I don’t think it’s gonna be pretty.”
The news came as a shock to loyal customers and former workers, like Simone Pitzka Barron.
“Dillon was doing this as good, if not better than any restaurant I’ve worked in — if he can’t do it, I’m not sure anyone who has a restaurant in the same vein will be able to pull it off,” Pitzka Barron told The Jason Rantz Show on KTTH. “He was navigating the min[imum] wage law as good as anyone. We were paid min[imum] wage plus had a tip line (tips on top). The fact that he is closing makes me scared for the rest. The law never addressed how employers were to deal with these increases. When you cut into a razor thin margin, it creates an instability.”
Read more about the other restaurants failing in Seattle because of the minimum wage hike.