A new minimum wage law is about to go in to effect on April 1st in Seattle, Washington, and some are saying that restaurants there are starting to close as a result.
The new law would drive the minimum wage up to $15 an hour, from the current $9.47.
Seattle mayor Ed Murray believes the increase will help ease income inequality, but the city’s restaurants are already showing signs that they’re struggling.
Currently, restaurants use about 36% of average earnings to pay their staff, while the rest of their expenses go to supplies and maintenance, according to Seattle Magazine.
The Seattle Eater interviewed a few owners, including Brendan McGill, owner of Hitchcock Deli:
“I think what people need to realize is that the money will have to come from somewhere. With a group like mine, where ethics in sourcing come before profits, we run a very slim margin. To pay my staff more, I need to either buy worse food or raise my prices, and I’m not willing to start buying commodity meats or fish from larger, questionably managed fisheries.”
If restaurants are already closing before the minimum wage hike, what will happen after April 1st? Many of these owners believe that large corporations and the very successful restaurants in the city will survive, but many small businesses will struggle then close.
In other countries, like Australia, where the minimum wage for wait staff is about $15 an hour, menu prices are considerably higher. Seattle customers could very well have to pay more over time, if they expect their favorite restaurants to stay open.