Ark Restaurants, a New York City-based operator of 42 restaurants, spent $2 million more on labor in 2016, specifically because of minimum wage increases.
The Bad Daddy’s casual chain changed its development strategy to avoid states where servers have to be paid more than $2.13 regardless of what they make in tips. A 40% increase in the minimum wage in Colorado would raise new units’ labor expenses there by $100,000. So why not build elsewhere?
The proprietor of Dee’s Route 202 Diner in Lebanon, Maine, took an outside job to offset the impact on her income of a hike in the state’s minimum wage. She told a local paper she’d also eliminated a staff position, cut hours and started closing for dinner two more nights per week.
All three operations are painfully adjusting to well-intentioned efforts to ease the plight of low-income people, but at least they’ll live. My chances are considerably lower now that I’m getting The Look just for being an innocent bystander.
The steel-melting glance, for the benefit of those who lack a spouse, is that judgmental stare you get when the partner has decided there’s something very wrong with the world and you’re somehow responsible. Something will remain very, very wrong until some rectification is made.
Strangely, you folks were the flashpoint. A TV news story was recounting how robotics and self-service gizmos like kiosks are catching hold in restaurants, in part because of higher labor costs. I made the mistake of saying I’d just finished a column on that very thing. My catastrophic failure was not characterizing it as a rant.
“So you’re OK with people’s jobs being eliminated? Fine,” I was informed as the sentencing was about to begin.
Operators, get ready for your own dress down from a public that’s been brainwashed to view the industry as morally suspect. Proponents of a so-called living wage won support in part by proselytizing that restaurants and their ilk could not be trusted to do right by workers. Never mind that a huge proportion of restaurateurs had been hourlies and have a strong empathy for people on a lower rung.
It’s also convenient for many lawmakers to forget they logged time as hourly restaurant employees themselves. They know a minimum wage post is usually a steppingstone, a very positive rite of passage.
Restaurateurs warned that raising minimum wages by an unreasonable margin would bring cuts, streamlining and automation. They were the Paul Reveres. Sure, they wanted to protect their businesses. But they sounded an alarm about the unforeseen results—that the impact could ultimately hurt the very people who would supposedly be helped.
Now, it’s happening. Instead of being admired for their foresight and ingenuity, operators are about to get a drubbing for being job killers and anti-employee. It’s a classic example of the messenger being punished.
So how can the industry help itself? At the very least, it should stress it’s heeding consumer preferences. Ark Restaurants and the parent of Bad Daddy’s didn’t pass along their higher labor costs in the form of price hikes, knowing that wouldn’t fly.
The business also needs to rectify the impression that it’s merely being greedy. It needn’t be ashamed of protecting profits, since black ink is what underwrites expansion and growth.
But most of all, it needs to counter criticism that it instigated the cutbacks in labor and an acceleration of automation—that it’s eager to transform a solidly people-oriented business into some sort of Westworld.
After all, restaurants are as much of a victim as the young employee who’s replaced by a robot.