As more cities and states adopt higher minimum wages, small businesses are finding new ways to adapt to paying a higher base wage.
In Seattle, where an $11-an-hour minimum wage took effect April 1—a 16 percent increase over the previous $9.47 base wage—some restaurants have raised their menu prices. Seattle’s minimum wage will eventually reach $15 an hour, but not until 2019 for companies with fewer than 500 employees.
Ivar’s Salmon House recently raised all its menu prices 21 percent to accommodate the city’s wage hike. All employees will now get at least $15 an hour and will receive extra cash as part of a new profit-sharing plan, owner Bob Donegan told local news station KBOI.
Bocanova, a restaurant in Oakland, California, recently abolished tipping and replaced it with a 16 percent surcharge on customers’ bills. The restaurant is raising its wait staff’s minimum wage to keep it more in line with other kitchen staff’s wages and then splitting the surcharge between all kitchen and wait staff.
The reason for the move was to make sure its wait staff didn’t earn exponentially more than other kitchen staff after tipping, since the restaurant had to raise the wait staff’s base wage.
“It was bold to do what we did, but this was not a new problem. It was an ongoing problem," Bocanova owner Meredith Melville told the Contra-Costa Times.
Businesses have reported mixed feelings about the wage hikes. Some say a higher minimum wage will have little effect on their operations, particularly if the business already pays a wage that's higher than the new minimum. Others have reported having to cut their long-time employees' vacation time in order to compensate for higher wages, or may have to lay off workers or not fill open positions.
Despite the extra cost, some business owners are supportive of a higher wage because they think it will increase customer traffic to have more people making a livable wage. "I know there's a lot of people out and around this area that work really hard for their money and this $15 an hour is definitely going to help them get paid more of what they're worth," Nick Putman, owner of Ballard Consignment in Seattle, told KomoNews.com.
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