Monday, January 2, 2017

How High Minimum Wage Laws Are Destroying Table Service at San Francisco Bay Area Restaurants

A KQED public radio report says that "the new minimum wages [is]obviously a step in the right direction," but the facts in the same report tell a different story of restaurant closings and new restaurants with formats that use fewer employees:
Most people can agree that 2016 was a hard year. And in the Bay Area, one group was hit particularly hard: restaurateurs. It seemed like every week, a beloved eatery closed, while another one opened, only to shut down a few months later...

In 2017, the restaurants you go to–from the hole-in-the wall joint near your office to the fancy, anniversary dinner spot–will look different. They might be closed one day a week, to make up for their shortage of qualified staff. Your go-to dish might be more expensive, to make up for the rising minimum wage...

Just this month, Nelson German, the chef behind Oakland seafood restaurant alaMar announced his decision to end the restaurant in it’s current form and reopen it as a casual eatery with counter service. One of the reasons? The minimum wage. When the Semifreddi’s cafe on Claremont closed, they mentioned similar reasons. Uptown sushi restaurant Ozumo cited the higher cost of everything, from rent to labor, as explanation for their recent shuttering. And wages will continue to rise. On January 1, 2017, Oakland’s minimum wage rises to $12.86, and next summer, San Francisco’s minimum wage increases to $14/hr...

Many restaurant owners see fast casual restaurants, instead of ones with full table service, as the solution to their economic woes. No table service cuts down on labor costs, offers diners a cheaper experience while shorter menus means a more efficient use of expensive labor.
KQED: Where wishes and reality just don't meet. You can't legislate prices above free market prices without a falloff in quantity demanded.  Including wage prices and the resulting quantity of labor demanded.



  1. So business closings, disemployment, higher prices, and lower quality supposedly constitute steps "in the right direction." It's all making sense now...

  2. Your bullshit is too vague.

    Get better bullshit.

  3. What justification is there for the government to set any minimum wage? It should be a matter between the employer and employee, and the only government involvement should be enforcement of the contract.

  4. In Australia where minimum wages are traditionally high, table service in bars is very very uncommon, at least historically that has been the case - and, probably related - tipping is not as much a part of the everyday economic culture as it is in North America,