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Seattle-based restaurant chain blames high minimum wage for bankruptcy
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Leroy N. Soetoro
Jul 20, 2019, 4:50:19 PM7/20/19
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https://www.foxnews.com/us/restaurant-chain-blames-high-minimum-wage-for-
bankruptcy
Businesses fail all the time for all kinds of reasons. But when
Restaurants Unlimited filed for Chapter 11 bankruptcy protection last
week, people noticed. The company owns 35 upscale restaurants located
primarily on the West Coast, including seven in Seattle.
In its filing, it declared, “Over the last three years, the company’s
profitability has been significantly impacted by progressive wage laws
along the Pacific coast…the result was to increase the company’s annual
wage expenses by an aggregate of $10.6 million.”
It went on to cite three examples where minimum wages have risen
dramatically over the last three years. Portland now requires $12.50 an
hour, an increase of 35 percent. San Francisco’s minimum wage has climbed
41 percent to $15.59 per hour. And Seattle, the first city with a $15
minimum wage, now forces large employers to pay at least $16 an hour.
Restaurants Unlimited, which is based in Seattle, did raise menu prices
and even added a living wage surcharge to bills. But it still lost money.
“I think what Restaurants Unlimited found out is that they can’t pass
along the full impact of that labor cost increase to customers through
their prices, said Michael Saltsman of the Employment Policies Institute.
“People can stay home, people can eat out less often.”
Ethan Stowell is a successful restaurateur with 14 high-end restaurants in
Seattle. He supports the city’s minimum wage law, but admits that it has
forced him trim staff to be more efficient.
“I think it’s just the cost of doing business has gone up, and it’s really
hard to adjust your prices at a restaurant at the speed the market
changes,” Stowell said.
Despite the high minimum wage in Seattle, 111 new restaurants have opened
in the city since May. The unemployment rate is at 3.4 percent, slightly
less than the 3.7 percent U.S. jobless rate. Proponents of a higher
minimum wage say Restaurants Unlimited is making worker’s pay a convenient
scapegoat.
“They made some bad business decisions,” said former Washington State Rep.
Jessyn Farrell of Civic Ventures. “There were a couple openings that
didn’t go well, and I think what’s really telling is they aren’t closing
restaurants in Seattle.”
Just before filing for bankruptcy, Restaurants Unlimited did close six of
its unprofitable locations. None are among the seven restaurants it runs
in Seattle and one is in Indiana, where the minimum wage is set at the
federal rate of $7.25.
The wage debate unfolds as Congress prepares to vote on the Raise the Wage
Act, which would boost the federal minimum wage to $15 an hour by 2026.
Nearly all of the Democrats running for president in 2020 support the
increase.
But the non-partisan Congressional Budget Office said there would be a
serious downside. In its report issued last week, it said 17 million
workers would get a pay raise, with another 10 million people who are
making just above $15 likely to also see a boost. It said 1.3 million
people would be lifted out of poverty, but up to 3.7 million people would
lose their jobs as companies cut the lowest-skilled employees to save on
rising labor costs.
--
No collusion - Special Counsel Robert Swan Mueller III, March 2019.
Donald J. Trump, 304 electoral votes to 227, defeated compulsive liar in
denial Hillary Rodham Clinton on December 19th, 2016. The clown car
parade of the democrat party ran out of gas and got run over by a Trump
truck.
Congratulations President Trump. Thank you for cleaning up the disaster
of the Obama presidency.
The Obama-led Committee on Foreign Investment in the United States (CFIUS)
approved Uranium One in fall 2010. With a little luck, we'll see
compulsive liar Hillary Clinton in jail before she dies.
Under Barack Obama's leadership, the United States of America became the
The World According To Garp.
Obama increased total debt from $10 trillion to $20 trillion in the eight
years he was in office, and sold out heterosexuals for Hollywood queer
liberal democrat donors.
bankruptcy
Businesses fail all the time for all kinds of reasons. But when
Restaurants Unlimited filed for Chapter 11 bankruptcy protection last
week, people noticed. The company owns 35 upscale restaurants located
primarily on the West Coast, including seven in Seattle.
In its filing, it declared, “Over the last three years, the company’s
profitability has been significantly impacted by progressive wage laws
along the Pacific coast…the result was to increase the company’s annual
wage expenses by an aggregate of $10.6 million.”
It went on to cite three examples where minimum wages have risen
dramatically over the last three years. Portland now requires $12.50 an
hour, an increase of 35 percent. San Francisco’s minimum wage has climbed
41 percent to $15.59 per hour. And Seattle, the first city with a $15
minimum wage, now forces large employers to pay at least $16 an hour.
Restaurants Unlimited, which is based in Seattle, did raise menu prices
and even added a living wage surcharge to bills. But it still lost money.
“I think what Restaurants Unlimited found out is that they can’t pass
along the full impact of that labor cost increase to customers through
their prices, said Michael Saltsman of the Employment Policies Institute.
“People can stay home, people can eat out less often.”
Ethan Stowell is a successful restaurateur with 14 high-end restaurants in
Seattle. He supports the city’s minimum wage law, but admits that it has
forced him trim staff to be more efficient.
“I think it’s just the cost of doing business has gone up, and it’s really
hard to adjust your prices at a restaurant at the speed the market
changes,” Stowell said.
Despite the high minimum wage in Seattle, 111 new restaurants have opened
in the city since May. The unemployment rate is at 3.4 percent, slightly
less than the 3.7 percent U.S. jobless rate. Proponents of a higher
minimum wage say Restaurants Unlimited is making worker’s pay a convenient
scapegoat.
“They made some bad business decisions,” said former Washington State Rep.
Jessyn Farrell of Civic Ventures. “There were a couple openings that
didn’t go well, and I think what’s really telling is they aren’t closing
restaurants in Seattle.”
Just before filing for bankruptcy, Restaurants Unlimited did close six of
its unprofitable locations. None are among the seven restaurants it runs
in Seattle and one is in Indiana, where the minimum wage is set at the
federal rate of $7.25.
The wage debate unfolds as Congress prepares to vote on the Raise the Wage
Act, which would boost the federal minimum wage to $15 an hour by 2026.
Nearly all of the Democrats running for president in 2020 support the
increase.
But the non-partisan Congressional Budget Office said there would be a
serious downside. In its report issued last week, it said 17 million
workers would get a pay raise, with another 10 million people who are
making just above $15 likely to also see a boost. It said 1.3 million
people would be lifted out of poverty, but up to 3.7 million people would
lose their jobs as companies cut the lowest-skilled employees to save on
rising labor costs.
--
No collusion - Special Counsel Robert Swan Mueller III, March 2019.
Donald J. Trump, 304 electoral votes to 227, defeated compulsive liar in
denial Hillary Rodham Clinton on December 19th, 2016. The clown car
parade of the democrat party ran out of gas and got run over by a Trump
truck.
Congratulations President Trump. Thank you for cleaning up the disaster
of the Obama presidency.
The Obama-led Committee on Foreign Investment in the United States (CFIUS)
approved Uranium One in fall 2010. With a little luck, we'll see
compulsive liar Hillary Clinton in jail before she dies.
Under Barack Obama's leadership, the United States of America became the
The World According To Garp.
Obama increased total debt from $10 trillion to $20 trillion in the eight
years he was in office, and sold out heterosexuals for Hollywood queer
liberal democrat donors.
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