Thursday, January 26, 2017

San Francisco Bay Area Restaurants Are Disappearing After Minimum Wage Hike

Joel Pollak writes:
Restaurants are rapidly going out of business in the Bay Area, after San Francisco passed a $15 minimum wage law in 2014 and the State of California followed suit in 2016. Yet the media are struggling to make the connection between high minimum wages and restaurant closures. 
The East Bay Times, for example, asked Tuesday: “What’s behind the spate of recent Bay Area restaurant closures?” It barely mentioned new minimum wage laws, brushing them aside as if they were largely insignificant....
From The East Bay Times:
 Upward of 60 restaurants around the Bay Area have closed since the start of September alone, with many citing difficulties like the cost of finding and keeping good employees, rising rents, new requirements for providing health care and sick leave, and doing it all while competing with the slew of new dining options.

The restaurant industry has always been among the most competitive and challenging to navigate, and failures are nothing new, but the current struggles have left some wondering if the traditional dining model might be headed for an overhaul.

“We’re at this precipice where the model of the full-service restaurant is being pushed to the brink,” said Gwyneth Borden, executive director of the Golden Gate Restaurant Association...
Sal Bednarz, who has owned Oakland’s Actual Cafe for seven years, shut the doors there and at his adjacent Victory Burger restaurant in late December... 
Cafe Rouge, a Berkeley fixture for 20 years, closed Dec. 30, also citing the difficulty of staffing the place. Long-lived eateries like Genova Delicatessen in Oakland, San Jose’s Bold Knight and San Francisco’s Kuleto’s shut down. Pasta Pomodoro, a Bay Area-grown chain, closed all 15 of its remaining restaurants in the region and filed for bankruptcy Dec. 30...
AlaMar, a restaurant that opened on Oakland’s Grand Avenue in 2014, closed temporarily at the end of December to retool its concept from a full-service restaurant with servers tending to tables, to a quick-service model where people order at the counter. It’s a less labor-intensive model, which owners Nelson and May German are using to combat the challenges of hiring and paying staff.

(ht Robert Blumen)

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