In Liberal Cities, Minimum Wage Puts Businesses in a Bind

File under: When crazed ideology meets up with reality.

CNBC reports:

Some small-business owners in liberal-leaning cities such as Seattle and San Francisco are finding themselves in a conundrum when it comes to the latest hot-button political issue: Philosophically, they may agree with the concept of boosting the minimum wage significantly, but pragmatically, they worry any drastic mandate could put them out of business.

"We do have to do something in this country about the disparity between minimum wage and living wage," said Seattle restaurateur Tom Douglas. Douglas serves on the board of directors of a local food bank, and recently hosted a fundraiser for victims of the nearby Oso landslide.

But Douglas said he's already learned the hard way that he simply can't afford to raise base wages quickly for his approximately 800 workers—and especially his employees, who pocket tips—to a minimum of $15 an hour, as is being proposed in Seattle.

For businesses accustomed to aligning with their liberal customers' beliefs on issues such as buying locally grown ingredients or composting food waste, the wage debate can feel like they are being stretched in two directions.

"A lot of small businesses are scared to come at it because of the backlash," said Judith Gille, the founder and co-owner of City People's Mercantile, a 35-year-old local Seattle retailer.

Speak out against the popular measures to increase pay, and businesses risk alienating customers and even employees. Stay silent, and some worry the high costs could push them out of business.

"We just want people to understand the reality: That small businesses are working on small margins, that this will have a huge impact and, in some instances, if (the minimum wage) was raised too quickly, some businesses would go out of business," said Hut Landon, executive director of the San Francisco Locally Owned Merchant Alliance.