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Seattle moved to ~$15/hr plus automatic 20% service fee (not at all restaurants, but many of the good ones). Some restaurants use that service fee to help pay bills, some use it to tip out a formerly tip-less kitchen, some to distribute to the service staff and some a combination of all three. Some just stash it for employee benefit programs, others for holiday parties, others for infrastructure upkeep.
Seattle is also surrounded by Amazon, Boeing, Microsoft et al. money. Who can say if that same approach works in Des Moines, Iowa?
Let's say pre-COVID we brought in $100,000 net in December, always by far the biggest month of the year, but averaged every employee out. Let's say full time floor staff and kitchen staff made $2,000 in wages and part-time $1,000. That comes out to $18,000. Rent is $10,000. Let's apply a flat 30% margin to all goods and say $30,000 was spent on what was sold, with another $15,000 spent on anticipatory sales like wine, spirits, meat and whatnot not sold. At that point you're down to $27,000 and you haven't accounted for taxes, power bill, composting, recycling and trash services, recurring pest control treatments, liquor commission bills and so on. Or that cooler whose motor burned out after being opened and closed one too many times and will cost $1,500 to replace, or the floor you need to get redone over the holiday break.
All it would take is increasing all those hours to $15/hr and suddenly you're at $6,666 for full-time staff (I did choose these numbers somewhat specifically to get to that point, lol, but they're not far from reality) and 3,333 per part-time, which again at 6 each amounts to just under $60,000. Your restaurant is now closed.
So then you reconcile that with your alcohol and food prices. Instead of a 400% margin on alcohol, you could jump to 800%. You've got $20 Old Fashioned, $14 pours of well spirits like Gordon's Gin and Brugal Rum. You could stay conservative with food and only increase those prices by 30% - you're steak dish is now $33 from $25 and so on.
For certain people in certain demographics and municipalities these things can even out and leave you at roughly the same profit margin with fewer customers, but a LOT of places would go under without significant tax relief from city, state and/or federal government. I don't even have to presume myself and the five other full-timers just get paid $30/hr because $15/hr paints a stark enough picture as is.
If you've got a solution better than "keep a handful of family run restaurants and send everybody else to Cheesecake Factory" I'd love to hear it.
~~~~~~~~~ "This is the streets, and I am the trap." � Jay Bilas http://www.popmatters.com/pm/archive/contributor/517 Hip Hop Handbook: http://tinyurl.com/ll4kzz
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