January began raising minimum wages in 21 states, and experts say rising labor costs are making it harder for some restaurants to stay open.
January began raising minimum wages in 21 states, and experts say rising labor costs are making it harder for some restaurants to stay open.
About 65 cities across the country implemented wage increases at the beginning of the month. Cities in Colorado, Washington, and California have the highest minimum wages in the United States
Tukwila, Washington, had the highest minimum wage for non-tipped workers at $21.10 as of January, according to the Economic Policy Institute. Some of the other cities with the highest minimum wage this year include Seattle at $20.76. West Hollywood, CA, $19.65; Denver at $18.81; and San Francisco at $18.67.
For many restaurants, significant cost increases are unsustainable, said Jot Condie, CEO of the California Restaurant Association.
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“It's no coincidence that restaurants in cities where you see these extraordinarily high minimum wages have struggled to survive, and the rate of restaurant closures in those cities is much higher than in other parts of the state,” he said. .
Candy said Restaurants It also has low pre-tax profit margins, some between 3 and 5 percent, leaving little room for error..
According to the National Restaurant Association, food and labor costs are the largest expenses for restaurants, each accounting for approximately 33 cents of every dollar in sales.
Some restaurant owners in Denver are still figuring out how to do this Balance your budget So they can keep the customers coming in and the staff happy.
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Joshua Miller is an employee at Sarpino's Pizzeria in Westminster, a northwest suburb of Denver. Miller said he started delivering pizzas and enjoyed learning his skills in the kitchen. He added that a higher than minimum wage would help him make ends meet Rising cost of living
Experts say that for many restaurants, the significant increase in costs is not sustainable.
“Minimum wage helps pay my rent. Gas prices.” Miller said.
Samar Sawgad owns the Sarpino franchise and said he pays all of his employees above minimum wage. Sawgad said many businesses like hers offer more than minimum wage.
“Our big challenge here is other pizza places,” he said. “People are fighting over hourly wages to get more and more.”
Experts say some restaurants are cutting back hours or downsizing to make ends meet. (Kandy Hayes/Fox News)
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Savage said he is finding more ways to help his employees financially with opportunities for rewards.
Chi Li owns Chi's Express, a Chinese restaurant in Denver. Lee said the restaurant has fewer than 10 employees, which helps him balance his budget.
“Because we have a small operation, a small menu, as you can see, so our costs, the food costs come down a little bit,” Lee said.
Experts say some restaurants are cutting back hours or downsizing to make ends meet. (Kandy Hayes/Fox News)
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Lee said they have Adjusted for inflation By raising them The price of the combined meal.
According to the National Restaurant Industry Report, it takes about 12 employees to generate $1 million in sales at a restaurant, but only four employees at a clothing store to generate the same amount.